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CASE FILES: Treading Where They Track

F.Y. Teng | Feb. 23, 2012
One of the world’s largest producers of tyres powers up its demand planning with high business intelligence.

Use of the system was gradually adopted by choice in the business. As they began using the tools that came with the system, the supply chain team came to appreciate that as they no longer had to manually consolidate and compile data from each warehouse or plant location into Excel worksheets, they had less room to commit errors and more time to make good business decisions. Even the morale of associates was lifted very quickly after implementation of the system.

Then, there was the added value brought about by the system when working in conjunction with SAP Business Intelligence. Using the two, business users could have key supply chain reports like “Forecast Accuracy”, “Slow Moving Inventory” and “Product Mix” generated automatically. Business users acknowledged readily that this tool helped them.

Bottomline Savings, Topline Extensions
The measurable ROI realised upon deployment of the system has been substantial. Among the highlights Goodyear’s business users trolled out for our judges of the IT Excellence 2011 Awards programme last year:-

    It improved the forecast accuracy of replacement sales from 75 percent to 80 percent minimum within one year of its rollout.
    It improved gross margins by reducing lost sales and back order reductions. In ASEAN, the figure was improved by US$245,000 a year; in India, US$144,000; and in North Asia, US$51,000.
    It led to the reduction of stock transfer costs for Goodyear’s operations in Asia, gleaning annual savings amounting to US$1,562,000.
    And by enabling the reduction of slow moving inventory, it started helping the company save US$123,000 a year.

Of course, the long-term impact of what the new system empowers the business to now do should be noted. With it, they can: quickly, easily, comprehensively and accurately identify slow or non moving inventory and respond more effectively; boast of 95 percent forecast accuracy and 85 percent OTIF (on time, in full) production capability; minimise safety stock levels without impacting customer demand; produce the right quantity of tyres at the right time; access analysed business information and operational details without hassle; work across the company’s customer relationship management system and customer facing Internet portal via special links; and, capitalise on having improved working capital.

 

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