The De’Longhi Group is among the leading global players in the small appliance sector dedicated to the world of coffee, cooking, air-conditioning, and home care. The group distributes its products in more than 120 markets worldwide. Its community of more than 10,000 employees contributes annually to the launch of increasingly innovative products in line with consumer needs. In 2021, the Group achieved €3.2 billion in revenue.
De’Longhi’s “Customer Fulfillment Excellence” project continues its innovation journey with the adoption of the SAP Integrated Business Planning for Supply Chain solution, aiming to rethink and transform the company’s supply chain and refocus the entire value chain by placing the customer at the heart of it. The project will review processes and tools used by the group’s global supply chain in order to improve service levels.
More specifically, De’Longhi’s goals involve complying with on-time delivery, anticipating customer demands through more precise forecasts by turning sales forecasts into more accurate production plans, making production more reliable by properly assessing production constraints, and having more accurate component procurement plans.
This transformation process has also been made necessary by the De’Longhi market environment, which has changed dramatically in recent years and is driven by greater omnichannel development, increased volatility of demand, and a greater emphasis on e-commerce, both directly and through brick-and-mortar customers and e-retailers.
In addition, the group’s increasingly international soul and a major expansion in foreign markets have brought with it increasing complexity in value chain management accentuated by recent macroeconomic events, which, together with increased online sales, has created certain challenges in sourcing raw materials and organizing logistics and transportation. This complicated and highly volatile environment has led the company to review all processes and tools at its disposal.
“SAP IBP is the solution that will allow us to take a step forward, particularly by implementing an integrated, end-to-end supply chain with metrics and easy-to-read reporting to operate in a more agile way, and to make decisions with distributed, transparent information that allows us to react to market volatility,” reports Matteo Pecci, global supply chain director at De’Longhi. “Such a solution is capable of combining the dual soul of De’Longhi, a very strong company in terms of product with a highly entrenched industrial culture that needs to be close to the end market, have know-how to interpret the dynamics, and swiftly respond to changes at the same time. A solution like SAP IBP will enable us to do this and with the integration of existing SAP systems, data will flow in a more harmonious and transparent way.”
A Global Project Towards a Digital Value Chain
At De’Longhi, SAP IBP will help cover all demand planning and supply planning needs, working to create a supply chain that does not work in silos but starts with the customer, horizontally, avoiding typical slowdowns associated with the departments that are typically involved in their management. The international project will involve all of the group’s customers and suppliers with a view of a digital value chain and collaborative forecasting.
De’Longhi has business locations in 32 markets and across five continents, with highly detailed value chain processes and a high number of product codes for managing a supply chain that serves the company’s global operations.
“With the implementation of SAP IBP, we expect to anticipate market changes and developments ahead of time and to extend them along our supply chain consistently and quickly to make the right decisions within our departments. For example, if we receive customer orders and there are no products in stock, instead of detecting it when it is too late for shipping, this “early signal” will give us the ability to react in time,” concludes Pecci.
Through automation and artificial intelligence (AI) within the solution, De’Longhi can also free up its employees from repetitive, transactional procedures and assign more value-added tasks. Collaborative tools help to better manage communication and correctly assign tasks, avoiding tools that can slow down processes and lead to a loss of information.
The Path to SAP IBP
The implementation project consists of two phases. The first involves the introduction of demand and supply planning processes and the second phase involves production scheduling and optimizing sales order management, all of which integrates with the capabilities of SAP S/4HANA, with a positive impact on group logistics management as well.
Three hundred people at De’Longhi will use SAP’s supply chain planning solution, a choice made by the company after a selection process of several months and careful functional, technical, and economic assessment.
“SAP Integrated Business Planning enables a more agile way of working, allowing companies to better predict and manage risks and opportunities and anticipate them to identify more profitable and sustainable solutions,” says David Vallejo, vice president, global head, Digital Business Planning, SAP. “So, it’s important to prepare for uncertainty by simulating critical situations in order to understand how to act quickly and from a what-if perspective, always with the aim of improving business and supply chain planning and synchronizing decisions between finance, manufacturing, and logistics.”
Karin Fent is senior director of Global Customer Success Digital Supply Chain at SAP.