The Lotte group in South Korea, which began business in 1948, is the country’s fifth largest conglomerate with over 90 business units employing more than 60,000 people across industries that include food, retail, chemical, construction, manufacturing, tourism and finance.
This diversification makes investments in a robust network and WAN infrastructure to support the connections among different business sites critical to growth.
The challenge
With the demands on WANs soaring from increasing traffic, and networks becoming more complex with the introduction of multi-cloud environments, the Lotte Group leadership tasked Lotte Data Communication Company (LDCC) with a broad examination of its entire WAN infrastructure.
LDCC found performance degradation caused by the growing use of cloud applications and services, and that additional capacity was required to accommodate increasing traffic and the high cost of network management for different sites.
There was also the need to introduce an advanced network infrastructure that can detect and manage traffic on each line on a real-time basis, better visibility across the entire network and to analyse the source of an error in real-time
LDCC determined that they would have to continue to add costly lines to accommodate expanding traffic if the company stayed with their existing WAN infrastructure.
Furthermore, since each affiliate was using an increasing number of cloud applications and services while still going through the data centre in the existing WAN, performance issues would remain even with additional lines.
Lotte’s management was also limited in its ability to process priority data and to immediately identify causes of errors due to the lack of visibility across the network.
The solution
Rather than just continuing to expand existing WAN, LDCC quickly recognised the advantages of replacing WAN with a SD-WAN, and was able to derive the benefits of separating the transmission and control functions for network data based on software that could improve management and operations.
The entirely new system was based on a SD-WAN with Cisco, who selected as the provider from the company’s track record of technology and performance based on numerous global implementations. This solution could be applied serially to affiliates based on their respective natures and needs.
Among the key implementations to date:
Lotte Homeshopping improves application connectivity at less than half of previous cost
Lotte Homeshopping was the first affiliate to adopt SD-WAN. Under its previous structure, even product analysis by merchandisers required dedicated lines, and even more so major business applications such as ERP and groupware, leading to heavy monthly line costs. The demand to expand the WAN was constant, and a more fundamental solution was desperately needed.
LDCC designed a network for Lotte Homeshopping and Lotte Group’s core data centre based on the SD-WAN and spent several months testing it before starting operations. The network functions were meticulously verified since this would be the first iteration.
Business was launched on the SD-WAN environment starting in the fall of 2019 and has been producing visible outputs ever since.
Lotte Homeshopping now enjoys three times the WAN bandwidth at less than half of the line cost by maintaining dedicated lines for core applications such as ERP and groupware, while other work such as analysing external data is conducted through the Internet. In addition, the ability to monitor and manage WAN operations in real-time has led to substantially greater reliability.
Lotte Chilsung Beverage gains flexible network infrastructure and more safety
Lotte started preparations in the second half of 2018 to convert the Lotte Chilsung Beverage Anseong plant first built in 2000 into a smart factory through an investment of approximately 122 billion Korea won (US$.
To ensure a cutting-edge beverage plant where all business processes, from forecasting, production, and inventory management to retail, can be automated using advanced digital technologies, the traffic on each line must be overseen and managed in real-time in the network environment.
The Cisco SD-WAN was able to double the bandwidth of the existing WAN and ensure that the substantial traffic added by automation could be easily processed. Also, by separating dedicated lines and ISP lines, and by connecting to the Daejeon Disaster Recovery Centre, Lotte Chilsung Beverage now boasts a flexible and secure network infrastructure with three-layered safety procedures.
Lotte Hotels can now centrally manage all 17 domestic locations
With 17 branches around the major cities of Korea, it has always been critical for Lotte Hotels and Resorts to ensure transparent and efficient management across its entire network.
A dedicated workforce was required to support reliable network operations, which led to high management costs. To address this, Lotte Hotels strengthened centralized management and automation and adopted the SD-WAN technology to ensure visibility across the network and allow flexible utilization of the group’s dedicated lines, ISP lines, and the Internet.
As a result, it can now manage all of the networks at its 17 domestic locations within a single fabric despite its seemingly complex structure. It can now apply uniform security policies to all of its branches and address any issues on its network in an agile manner through real-time detection. At the same time, it managed to reduce line costs by more than 20%.
In all, moving to an SD-WAN infrastructure enabled Lotte visibility across the entire network of various business units. The maintenance burden was also reduced thanks to improved centralised management and automation. The performance of cloud and business applications was accelerated, business continuity secured, and security was also strengthened. This enabled the Lotte business to be more responsive to changes in the business infrastructure and the needs of the organisation.
Future plans
Lotte Group plans to expand the adoption of SD-WAN and seize the initiative in the multi-cloud era. Both the Lotte Group and LDCC are planning to expand the visible benefits of SD-WAN already achieved at several affiliates to the entire group. They are also ensuring that the unique requirements of each affiliate are fully taken into account in the new solutions.
Moving to a SD-WAN has shown that it can improve WAN performance and ensure visibility on the entire network while providing outstanding opportunities for cost reduction and business continuity by supporting connections without any performance degradation when cloud applications and services are applied.
