o9: Driving Digital Supply Chain Transformation at Marelli
Marelli has, over the years, forged a reputation as one of the world’s leading global independent suppliers to the automotive industry.
With a well-established track record of innovation and manufacturing excellence, the organisation is constantly seeking ways to increase efficiency in its planning processes.
Embarking on a bold digital transformation journey, Marelli sought to obtain full visibility across the end-to-end supply chain, from customers to suppliers. The answer was o9 Solutions, which has established itself as a leading enterprise AI software platform provider for transforming planning and decision-making.
Their collaboration represents a strategic approach to modernising supply chain management through advanced technological integration.
The digital transformation journey
Traditional manufacturing approaches are being replaced by data-driven decision-making processes that promise greater efficiency and adaptability.
Digital transformation has become a critical imperative for modern manufacturing enterprises seeking to remain competitive in a rapidly-evolving global marketplace. Companies must continuously innovate to stay ahead of technological changes and market demands.
Marelli has recognised and risen to the challenge and sought a comprehensive solution to streamline its intricate operations.
Carlo Chiarle, VP Global Head of Manufacturing Operations at Marelli, articulates the philosophy behind the company’s strategy.
"Digital transformation is a journey that involves the entire organisation," he explains. "The main concept is to enable our teams to spend time analysing data instead of collecting information."
A strategic partnership emerges
The collaboration between Marelli and o9 originated in late 2021, with plans to implement an advanced and automated sales, inventory and operations planning (SIOP) process globally by deploying the o9 Digital Brain platform at production plants.
Both companies recognised the need for a comprehensive approach to operational planning that could address the complexities of modern manufacturing. The initial stages involved a carefully-planned pilot programme targeting specific divisions and manufacturing plants.
"We started by taking one division and a couple of plants to work together on a pilot,” recalls Koen Jacobs, VP Global Sales at o9 Solutions.
The team meticulously analysed the initial results, identifying key learnings and opportunities for improvement. Their approach was methodical and value-driven, focusing on creating scalable solutions.
The pilot's success was remarkable, as Koen explains: “Within just 18 months, we were able to roll out optimised planning and decision making across Marelli.”
This rapid implementation demonstrated the effectiveness of the o9 Solutions approach and the readiness of Marelli's teams to embrace digital transformation.
Comprehensive solutions
Marelli's operational landscape presented significant challenges that demanded an equally sophisticated digital solution.
The company manages an astounding 350,000 component variations sourced from 2,500 suppliers, which are ultimately transformed into 50,000 finished goods. Such complexity requires a robust, flexible and intelligent planning system that can navigate intricate supply chain dynamics.
Carlo explains why o9 Solutions stood out among potential partners.
"We scouted different potential partners and decided on o9 for their holistic approach and experience which is not necessarily related to the automotive sector," he continues.
“They have experience in other fields and that brings opportunity for out-of-the-box ideas that can improve our operation.”
Koen elaborates on o9's unique positioning, highlighting the firm’s ability to handle Marelli's complex operational requirements.
"Marelli needed a partner that could simplify and harmonise their planning process," he goes on.
“One element to consider is the complexity of Marelli and the ability to deal with that at scale, as well as our experience of what ‘good’ looks like in many different industries. The result is a single source of truth across divisions, enabling a cross-functional integrated business planning process.”
Operational improvements
Implementing an SIOP tool has delivered substantial, measurable benefits for Marelli. The company has experienced significant reductions in emergency shipments, which not only decreased costs but also minimised carbon emissions. Inventory turnover rates have improved, indicating more efficient resource management.
"We've reached almost 90% adoption rate," Carlo notes, with evident satisfaction.
The system has dramatically enhanced visibility into customer production programmes, providing accurate forecasts up to 24 months in advance. This improved predictability allows for more strategic planning and resource allocation.
What’s more, the transformation has enabled Marelli to mitigate external market fluctuations more effectively. By anticipating potential disruptions and having a more comprehensive view of their supply chain, the company can respond more quickly to changing conditions.
“Obviously we don't know what the market will bring,” Koen adds, “but the whole point is that Marelli has a platform to make decisions in any market condition.”
A platform for future flexibility
o9 Solutions has effectively created a digital twin of Marelli's supply chain through an advanced enterprise knowledge graph. This foundational capability provides a robust platform for decision-making under various market scenarios.
The implementation goes beyond traditional supply chain management, offering a holistic approach to operational planning.
Koen outlines four key expansion directions for the partnership: supplier platform onboarding; deeper operational scheduling; cross-functional scenario planning; and leveraging generative AI use cases. Each of these areas represents an opportunity for further innovation and efficiency gains.
“We take a value-driven approach,” says Koen. “We sit down regularly to identify the next cases in Marelli’s journey.”
Broader organisational impact
What began as a supply chain initiative is evolving into a comprehensive organisational transformation.
Carlo metaphorically describes SIOP as "like a drum in the orchestra that gives rhythm to the operation,"emphasising its role beyond traditional manufacturing tools. The system is transcending departmental boundaries, finding applications in human resources for workforce planning and training.
"SIOP is not just a supply chain or manufacturing tool," Carlo emphasises. "It is a company-wide tool that provides accuracy in volumes, production and even manpower planning."
The system is also contributing to sustainability goals by enabling more efficient production scheduling and reducing unnecessary operational hours.
Carlo concludes: "We want to enlarge our approach with customers and suppliers, creating an end-to-end collaborative ecosystem that supports continuous improvement.”
To read the full article in the magazine, click HERE.
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