Demand Driven Digital Transformation at BSH
At Sapphire today, I listened to Sebastian Peters, BSH Group who explained how BSH “infuses it´s supply chain intelligence with a demand driven transformation program on a global scale”.
BSH at a glance
First, Sebastian explained that BSH, a European based home appliance manufacturer with a revenue of 13.4 B Euros, have ”implementing the demand driven concepts in more than 40 factories, 70 markets and 120 warehouses”.
For more than 50 years, BSH has been producing innovative home appliances that improve the quality of life of its consumers across the globe. They are known for global brands such as Bosch, Siemens, and Thermador.
BSH manufacture “clever home appliances for daily use” in product categories such as:
- Cooking and baking
- Refrigeration and freezing
- Washing and drying
- Small home appliances
Digitization at BSH means designing and manufacturing smarter connected products
The ongoing digital transformation is bringing with it additional consumer requirements for home appliances that are changing BSH’s core business.
To remain the first choice for consumers, the company are beginning to offer digital services in addition to home appliances in the future. The goal is to become the industry leader for digital services and kitchen experiences for connected consumers
To this end, Home Connect is BSH’s platform and ecosystem brand, and is the World’s largest digital ecosystem for the connected kitchen including 29 service partners in 35 countries worldwide.
Home Connect enables simple control of home appliances – from washing machine and oven to coffee machine and vacuum cleaner ‒ through Home Connect App which enables access to all information and control of home appliances. Devices that are connected to Home Connect are continuously given new digital functions throughout the product life cycle.
Demand Driven Planning at BSH
To drive planning processes centered around the customer required a global end-to-end approach. This meant that BSH needed to replace its obsolete planning systems with an integrated e2e planning solution.
As Sebastian pointed out, “BSH needed a sales planning process replaced for all 5 product areas. We also needed to enable demand initialization and automation through statistical forecasting and demand sensing”. They looked to SAP and the SAP Integrated Business Planning (SAP IBP) solution to address these challenges.
IBP at BSH
Sebastian explained 2 focus areas for the Integrated Business Planning implementation.
- Integrated planning processes – “IBP enables us to reconcile supply and demand”
- Demand Driven methodology “Demand Driven MRP enables us to focus on short term planning horizon by leveraging the customer order to trigger replenishment”
BSH has been live with SAP IBP since July 2018, and are “already seeing functional benefits, gaining great user acceptance and achieving substantial benefits and competitive advantages”.
- Improved S&OP processes – “We have enhanced our monthly Sales & Operations Planning process with state-of-the-art concept & technology”.
- Enabled demand driven MRP – “We are a front runner in the industry with Demand Driven MRP (DDMRP) concept and the implementation of SAP IBP for Demand-driven Replenishment. DDMRP strives for improved productivity, not just cost reductions. We now link DDMRP with production scheduling to tie the demand to the shop floor”.
- Single Planning Solution – “We now have one transparent data model with flexible aggregation and automated disaggregation. We drive all planning on a “One number” principle”.
- Simulations – “Flexible simulation capabilities enable us to perform “what if” analysis to test out ideas and make informed decisions”.
- Improved Planner Productivity – “We now have exception-based planning processes. Planners are alerted when exceptions occur that require their expertise”.
- End-to-End Planning – “Now on IBP we have all relevant planning logic, from supply and demand to the shop floor”.
Thanks to Sebastian for a great presentation.