Service Transformation Drives Competitiveness In Manufacturing

Stephanie Reshel

Innovation is the cornerstone of every manufacturer’s business. Constantly inventing and refining products is essential to stay ahead of the competition. But increasingly, offering great products is not the only requirement for success. Manufacturers must deliver additional value by surrounding their products with great services. And that means backing them up with world-class business processes.

Take Kennametal, for example. For this leading supplier of wear-resistant tools for metalworking to the automobile, airline, and manufacturing industries, achieving dependable, on-time delivery is an essential element of its service. However, the complex configuration of its enterprise resource planning (ERP) systems was making it difficult for finance personnel to view and analyze data. The company needed a new solution.

Thanks to SAP software and the combined efforts of Kennametal IBM Global Business Services and IBM Power Systems, the company now has that solution. And it has delivered a noticeable boost in performance for a number of business processes.

With the runtime of a critical report now reduced from 4.5 hours to just 45 minutes, product delivery and on-time performance can be checked multiple times during a single working day, something that just wasn’t possible before.

Near real-time visibility

The time to run a report that checks open orders has also been substantially reduced, from an hour and seven minutes to just seven minutes. As a result, its employees have near real-time visibility into the business, which enables them to plan more accurately and deliver more proactive services to customers.

In addition, the company is exploring how the new solution will help it accelerate material requirements planning and provide decision makers with up-to-date information on orders in the pipeline, empowering them to optimize costs and minimize delivery times for customers.

Greater agility

Another company that is benefiting from a similar solution based on SAP and IBM solutions is Indus Motor Company, a Pakistan-based leading manufacturer of Toyota vehicles. With the ability to collect and analyze data from across the business and transform it into actionable insight, decision makers now have up-to-the-minute information at their fingertips.

For example, material requirements processing is now 95% faster. With near real-time visibility of requirements, sourcing risk is reduced, as changes automatically flow through to other systems such as production planning. The company also has greater agility to switch to alternate suppliers in the event of supply chain disruption. It’s a significant benefit given that Indus Motor Company receives parts from more than 60 suppliers across Pakistan, Japan, and Thailand, all operating on a just-in-time basis.

Increased quality

The quality management team at Indus Motor Company is also benefiting from accelerated processes and better information. Previously, all new components were inspected, the information was recorded manually, and then entered into a standalone system in batches.

Soon, the team will be able to record information directly into an app on a mobile device. Real-time analytics will then be used to detect and alert suppliers to issues before the parts move into the manufacturing process. As a result, the company anticipates that it can reduce its defects per unit metric by 20%, boosting quality and reducing the risk of delivery delays.

And the innovation doesn’t stop there. In the future, dealerships will be able to enter their forecasts directly into the solution, providing accurate, complete information that is expected to improve the accuracy of sales orders by 10%.

In the digital economy, customers are increasingly informed and discerning. As these examples show, manufacturers that want to stay ahead of their competitors are surrounding great products with value-added services based on streamlined business processes and real-time information for decision-making.

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Indus Motor Company

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Stephanie Reshel

About Stephanie Reshel

Stephanie Reshel is senior director for Strategic Ecosystem Marketing at SAP. She drives joint marketing strategies globally with the top strategic services partners. Follow her on @SReshel.