MAHLE’s Transition to SAP S/4HANA

Transparency in supply chains, stability in planning

As part of this ambitious process, it fell to Och to redesign the complex supply chains. The company lacked suitable methods and tools to increase transparency in the supply chains and stability in planning. Fluctuating call-offs from OEMs, combined with purchasing behaviour in the aftermarket that was difficult to predict, complicated capacity planning, stock management and materials procurement, and made long-term demand planning challenging. Optimised production planning and standardised materials procurement processes were intended to make demand more predictable and achieve a reduction in stock levels. “The GIB Suite from ifm offered the ideal conditions for this. Most of the functions were already in place,” reports Och. Mahle and GIB – now ifm – have been cooperation partners for many years. However, it was not just Michael Och’s positive experience that spoke in favour of ifm’s SCX Suite. ifm’s software solutions are already in use within the company by various user groups for different business cases. “SCX is playing an increasingly important role in Mahle’s day-to-day operations,” reports Och. Furthermore, the group continues to grow as a result of the S4 transformation. All of this made it logical to roll out the software across all sites. Consequently, ifm was quickly chosen as the partner for this extensive supply chain management project.

As early as 2019, Mahle and ifm jointly launched a three-year planning phase during which the templates for the standardised logistics modules were developed, based on the ifm solution. For forecasting and demand planning, the partners used SCX for Inventory Management; SCX for Manufacturing, for Demand Planning and for Procurement were added later

In 2022, the time had come and the first site went live. “From 2022 onwards, things really took off and further roll-outs across all regions could be planned,” reports Och. This is also thanks to the excellent collaboration between Mahle and ifm. “The consultants at ifm are characterised by a high level of expertise and professionalism. This enabled us to consistently complete our projects in a targeted manner and on schedule,” reports Och.

Fluctuating call-offs and outliers

A number of industry-specific challenges had to be overcome during the transformation process. For example, managing fluctuating call-offs from OEMs proved to be a challenge. “From the sixth month onwards, significant fluctuations in customer call-offs are typical in our business. We had to use the new planning tools to manage this,” explains Och. For consistent and global demand planning, access to long-term data from all sites and more accurate forecasting models was essential. The logistics provider divides the planning process into long-term and medium-term periods. With SCX for Demand Planning, planners were able to utilise long-term data from all sites to produce a robust forecast. The long-term planning horizon at Mahle spans a total of five years and is broken down into ever finer detail. In the event of expected fluctuations, the programme issues timely warnings and visualises the requirements.

In the aftermarket sector, a different approach was required. Mahle sells thousands of products, which are managed by just a few planners. This is further complicated by unpredictable outliers. With SCX, the planning steps could be automated. The information and principles used by SCX for the automatic forecast led to significantly better forecasting models, as dependencies between sites are clearly illustrated. The automation reduces the workload on planners. In parallel with the automatic forecast calculation, SCX issues warning messages. This means the planner only needs to intervene manually in the event of a unexpectedly high call-off or an outlier.

Clear allocations simplify planning

The template concept developed during the three-year planning phase simplifies cross-plant planning. For the material sets that SCX works with, Och and his partner devised a simple structure: each material set is allocated to a plant. No further aggregation of the data is required. As soon as the hierarchies are populated with items, they are enriched via SAP with additional demand information and data from the ifm solution. This creates a sufficiently broad database that enables precise planning. In the next step, the data is transferred live to SAP in the form of planned primary requirements. To enable the planner to implement their plans quickly and effectively, ifm has also introduced Mahle-specific selection options. Greater stability in the supply chains is already evident today. Stock levels have been reduced:

AI methods could offer further potential for optimisation. To utilise this for the planning of logistics processes, Michael Och would like to have ifm by his side once again: “Together, we could further expand this exciting field for the benefit of Mahle in the future.”