Evonik’s Integrated Supply Chain Transformation

By Camelot
Evonik's Transformation to Achieve an Integrated Supply Chain
Discover how we helped Evonik overcome challenges and achieve significant benefits through our collaboration, enhancing efficiency in their supply chain

In the area of supply chain, Camelot is a global leader in end-to-end supply chain orchestration: From strategy, process, and application consulting to software implementation and adoption. Our unique combination of industry, functional, and application knowledge enables us to transform complex business processes as well as IT ecosystems in supply chain to realise competitive advantages for our customers. During our collaboration with Evonik, our objective is to transform their supply chain to achieve organisational excellence, improve process efficiency and, capacity utilization as well as increase service levels accompanied by lower inventories overall.

Establishing the Supply Chain Function

Evonik was undergoing a comprehensive supply chain transformation program to set up a best-practice supply chain organisation. This initiative encompassed various business lines and addressed their unique needs. The newly formed "functional solutions" business line embarked on a three-phased journey to establish its supply chain function. Firstly, Evonik and Camelot created a dedicated organisation, integrating sales, production, and supply chain management (SCM) aspects to cater to the specific requirements of the diverse value chains. Secondly, a redesigned mid-term planning process was implemented, with a strong emphasis on employee roles and training to ensure smooth adoption. Interim tools facilitated this transition. Finally, we laid the foundation for an optimiser solution to enhance S&OP (Sales and Operations Planning) decision-making. This solution was built upon a thorough understanding of production constraints and an updated Enterprise Resource Planning (ERP) mapping. Having successfully transformed its organisation, processes, and systems, the business line was positioned as one of the front runners for the first Integrated Business Planning (IBP) roll-out.

Optimising Global Supply for Post-Pandemic Market

The "smart materials" division, facing ongoing disruptions from the COVID-19 pandemic, prepared an optimised supply chain setup to efficiently serve overseas markets from its EU-based production sites. This initiative commenced with defining clear service level objectives for each market, considering customer expectations and evolving competitive dynamics. Subsequently, we analysed material flows and alternative scenarios involving warehousing and postponement strategies. The final network design was chosen based on a business case evaluation and
its alignment with the overall business strategy. Lastly, to ensure the achievement of service level targets, regional SCM organisations implemented detailed material-level inventory planning. This approach enabled a reduction in overall inventory levels while still ensuring higher service levels despite demand fluctuations.

Enhancing Global Planning With IBP Supply and Inventory

Evonik has introduced a global program to implement IBP processes built on SAP IBP. Following the successful completion of demand planning, our focus now shifts to global supply planning with the following objectives:

  • Standardisation: Establishing a consistent framework for end-to-end supply chain planning by implementing standardized processes and IT systems across all business lines. This includes both time-series and order-based planning approaches.
  • Improved Performance: Driving better planning accuracy, efficiency, and capacity utilisation through integrated planning across relevant business lines. This ultimately translates to lower supply chain costs (particularly inventory costs) while simultaneously achieving higher service levels.
  • Successful Global Roll-Out: Assessing and addressing global and local business requirements to harmonize and replace legacy tools. This paves the way for further improvements and the integration with execution systems in areas like sales order processing, Production Planning and Detailed Scheduling (PP/DS), and supplier collaboration.

Overall, the project examples clearly show how Evonik is ensuring the future competitiveness of its supply chain management transformation in an integrated approach which covers the three main dimensions: Setting up a skilled organisation, implementing best-practice processes, and using best-in class integrated technology to realize the overall SAP strategy end-to-end. From demand via distribution to factory and back for improved demand and supply elements and better planning overall.

Read the full story HERE.


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