Japanese equipment manufacturer JTEKT was looking for a fast, flexible planning tool to improve its S&OP process. The SAP IBP solution and integrator TeamWork were chosen for this major project.
JTEKT is a supplier of automotive steering systems, bearings and machine tools. The Japanese manufacturer has 137 subsidiaries worldwide. The Europe Automotive Division employs more than 4,600 people at 7 plants in 6 countries, and generates annual sales of 1.7 billion euros.
Europe is strategic, as it is home to the largest number of premium automakers. PSA and Renault are also among the supplier’s customers. JTEKT’s European headquarters are located in France, in Irigny, near Lyon.
The desire for greater flexibility and responsiveness
Automotive suppliers work in a highly visible sector, with new vehicle development taking place at a very early stage, and business volume projections being particularly precise. Thanks to this visibility, JTEKT is accustomed to investing for the medium and long term.
For planning purposes, JTEKT – like many other companies – relies on Microsoft Excel. A perfectible solution: not integrated with ERP; long and tedious planning; lack of flexibility and responsiveness. The OEM turned to SAP IBP, because its interaction with Microsoft Excel makes it a familiar tool for users.
SAP IBP offers other advantages, such as the ability to integrate data from heterogeneous sources and to share the S&OP process with the entire supply chain.
An essential POC phase
As a long-standing partner of JTEKT, TeamWork was the natural choice for this project, with objectives divided into four themes: Demand Plan (S&OP business plan, sales projections and gap estimates compared with budget); Supply Plan (purchasing plans, plant and inter-plant production plans); Scenario (impact of market fluctuations, ability to respond rapidly to customer requests); Capacity (monitoring plant and machine load rates, taking account of supplier alerts).
The project began with the development of a demonstrator, lasting around two months. A POC based on company data and realistic scenarios. For example, the simulation of a customer’s capacity problem.
“You need to take the time to build it with the service provider, so that you understand the tool, its philosophy and what’s at stake in relation to your business. The move to SAP IBP represents a significant change in the way we approach the supply chain. The POC illustrates these changes and visualizes the processes. It’s clearly a good exercise.”
Daniel Lellouche
Consultant Architecte SAP SCM, TeamWork
The POC is also decisive in engaging the business units in the project… and convincing management of the soundness of the investment.
Several deployment waves scheduled
Eight months elapsed between the actual start-up of the project and the finalization of the first stage, five-year budget planning. Impressive gains in responsiveness
“Today, this process takes just a few minutes to calculate, whereas it used to take hours. And we no longer pull our hair out when a customer arrives with a last-minute notification, because we can take it into account quickly.”
Blandine Simon
Purchasing performance project manager at JTEKT
The second wave of the project, which is still underway, involves integrating the S&OP process into SAP IBP. The aim is to take volume fluctuations into account on a monthly basis and cascade them through the supply chain more regularly than before. This will make it possible to determine any discrepancies between actual activity and budget on a monthly basis.
Further steps are planned: the follow-up of potential projects or projects in progress, to further extend the long-term vision; the management of capacity issues; the adoption of SAP IBP by other Group divisions.
Faster and better anticipation
The adoption of SAP IBP saves planning time and improves responsiveness, for annual budget planning, monthly activity monitoring, as well as for ad hoc requests. For example, when a customer asks our teams to carry out capacity surveys. This ultimately helps improve customer satisfaction.
The second benefit is anticipation, which helps avoid certain financial losses. Whether during periods of increased activity (supply difficulties) or reduced activity (increase in dead stock).
“We particularly appreciated TeamWork’s experience in the supply chain, and the good relationship with their consultants, who are always listening and looking for solutions. What about SAP IBP? We find it fast, flexible and intuitive.”
Blandine Simon
Purchasing performance project manager at JTEKT
