Old World Industries Keeps Customer Vehicles Running Smoothly with SAP S/4HANA

The reliable operation of billions of cars, trucks, and agricultural equipment is a vital part of the global economy – getting people to work, transporting essential commodities, delivering farm products that feed the world.

When vehicles stop running, economic instability rises rapidly. It is up to businesses like Old World Industries to help ensure that these valuable assets are protected inside and out.

Over the course of 45 years, Old World Industries transformed from a small chemical trading company into a multibillion-dollar global powerhouse for the automotive, chemical, and agricultural industries. Both commercial and consumer customers rely on our products, which include PEAK coolant and antifreeze, BlueDEF diesel exhaust fluid, and an array of private-label brands for the professional installer.

But as demand for our offerings began to accelerate worldwide, we soon realized that our siloed and manual approach to sales and order fulfillment no longer worked in our favor.

With Deloitte as our partner and the support of the SAP Early Adopter Care program, we decided to deploy SAP S/4HANA to streamline and integrate processes across the business. However, this initiative was more than just a way to connect our processes; it has become the foundation that allows us to give our customers what they need before they even know to ask.

Tuning Up Operational Core to Fuel Business Growth

Based in Northbrook, Illinois, Old World Industries had long relied on a midrange computer system to support operations and improve efficiency as we grew through acquisitions and new product introductions. In nearly 45 years, our IT landscape had been significantly customized and configured to address changes to our internal business requirements, external customer demands, and vendor needs.

But maintaining a seamlessly unified business became more difficult over time because, like all legacy enterprise resource planning (ERP) systems, our IT landscape wasn’t flexible and scalable enough to evolve with us. For example, our subledger for transactions — such as sales, accounts receivable and payable, and inventory — underwent a five-day hard-close process at the end of every month. After executing overnight batch runs and generating a summary of month-to-date and year-to-date financial performance indicators, we still couldn’t obtain the accurate, real-time view we needed to make decisions confidently.

What we needed was a comprehensive digital platform of intelligence that connected all our lines of business, and a supply chain that stretched across 60 countries, in order to serve a growing global customer base more effectively. And by choosing SAP S/4HANA, we found the next-generation ERP foundation that could help us eliminate these inefficiencies, meet the demands of rapid expansion, and predictively determine our customers’ needs.

Deploying SAP S/4HANA: Where Ingenuity and Innovation Meet

We learned that there’s more than one way to deploy SAP S/4HANA. Some companies choose to undergo a mass migration, others slowly implement ERP solutions as needs require and opportunities emerge. After assessing the readiness of every aspect of the business and understanding the potential impact, we decided to undertake an implementation and rollout of the full ERP suite that was scaled by business locations to help ensure continuous operations without disruption.

Initially, we designed a blueprint, with the guidance of an independent firm, so that our transformation plans made sense. For example, hidden pockets of strength were identified to open up new opportunities, and areas of weakness were found and addressed to allow our growth to further flourish. And more importantly, we evaluated how each process change or efficiency improvement in one area of the business impacted the rest of the company.

Based on that blueprint analysis, we selected a handful of contract manufacturers to migrate financial transactions and processes from the legacy system to SAP S/4HANA, including procure to pay and order to cash. Once we discovered how to optimize SAP S/4HANA in these manufacturing locations, we began rolling out the suite to the rest of our U.S. operations. Currently, we support several global customers with SAP S/4HANA. Our international supply chain locations in Mexico, Europe, Asia, and South America will also transition to SAP S/4HANA, according to our road map.

The more our adoption of SAP S/4HANA progresses, the better we understand our financial performance and how to further enhance the business. With this single ERP solution, we are streamlining and integrating all our processes, as well as gaining the transparency necessary to find previously hidden risks, undetected redundancies, and missed opportunities.

To date, we have acquired capabilities that have led to competitive advantages such as:

  • Faster soft, monthly, and annual financial close, driven through real-time insight into customer demand by centralizing data to form a single source of truth
  • Less revenue leakage by accelerating service, on-time deliveries, and decision-making with business-wide collaboration
  • Lower carrier rates now that our transport managers can base negotiations on real-time, full visibility into order trends, sales forecasts, and delivery performance
  • Higher customer satisfaction rates as we accelerate our ability to anticipate customer behaviors and needs more accurately with a foundation for predictive analytics, machine learning, and Internet of Things (IoT) technologies

Even though Old World Industries will benefit greatly from this digital initiative, our customers will profit from it even more. As SAP S/4HANA helps us become more informed and efficient, we can quickly react to customer needs and serve them better with ingenuity and innovation to help ensure that their transport and logistics operations keep running smoothly.

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Donna Markey is controller at Old World Industries.