Since nothing exists in isolation, logic would dictate that most major companies would be drawn to enterprise-wide planning and a technology system that unifies and aligns business across finance, sales, marketing, human resources, and other departments.
This is especially true in the current fast-moving market when businesses are still facing material sourcing and supplier challenges triggered by the international pandemic. Yet 72% of global businesses are moving forward with expansion despite economic concerns and supply chain challenges.
As the COVID-19 threat accelerated, SAP’s longtime client Freudenberg Home and Cleaning Solutions examined its operations and saw that there was an overwhelming opportunity to improve how the business runs and come out of the pandemic as an even stronger business.
Freudenberg’s vast footprint – its presence can be found in 35 countries – was both a blessing and a curse. Different regions, as well as business areas, utilized dissimilar planning approaches and sources, limiting the ability to gain an overall picture across the entire company. Some of these planning processes were carried out manually, with employees relying on hundreds of different spreadsheets to compile reports. Often, comptrollers had to be personally consulted during this period to confirm data and statistics, slowing the pace. Yet, even with confirmed figures, discrepancies between financial and production plans remained.
Franco Giacomini, vice president for big markets in Europe, the Middle East, and Africa, stated, “In a rapidly fluctuating market…forecasting is crucial for us. We need it to ensure we produce enough of the right products at the right time and understand the financial impact of various planning scenarios.” Clearly, a new – and fully digital – approach was needed to bring business processes into a single platform to anticipate, understand, and meet customer expectations to keep the company thriving.
Remodeling a Long-Established Business
Based in Weinheim, Germany, the Freudenberg Group’s legacy goes back more than 170 years. Of its diverse branches, Freudenberg Home and Cleaning Solutions produces everything from floor cleaning systems to laundry care products to household cloths and rubber gloves.
SAP’s relationship with the company began in the 1990s, when the Freudenberg Group first adopted SAP software. In an early example of the type of platform that would later be required as the pandemic intensified, Freudenberg Home and Cleaning Solutions merged multiple applications into a global, centralized pricing scheme in 2003.
Fast forward nearly 20 years, that remains in use, but now a new platform was created to deploy a hybrid architecture consisting of data and analytics solutions based on SAP Business Technology Platform (SAP BTP). Using consolidated finance and supply chain data, and integrating it with a cloud planning tool that operates in real-time across multiple regions and product categories, Freudenberg is able to simulate best- and worst-case scenarios to grasp operational impact, along with potential profit and loss. A definite game changer for the disparate business unit planning that had been taking place.
As ambitious as this project sounded, the architecture was deployed when it was needed most and when much of the world was locked down in 2020.
Forging through the start of the pandemic paid off for Freudenberg. The single-source repository has revolutionized how Freudenberg runs, harmonizing the planning and forecasting processes across the consumer products division, regardless of international boundaries.
The enhanced knowledge allowed planners to quickly scan details about product volumes, available raw materials, and sales value, closing gaps that might have otherwise remained open and undetected.
“The smart combination of sales plans, forecasts, and operative plans in one integrated global simulation and planning platform truly accelerated decision-making,” said Andreas Hass, Freudenberg’s corporate IT manager for Analytics Processes and Systems.
Through this innovative method of scenario planning, and the deeper understanding of profits and loss, planning transparency and accuracy increased. What decreased was inaccurate, manually derived figures and time spent on repetitive report preparation tasks, freeing up teams to evaluate new trends and engage in other high-value work that could lead to increased growth in current and potential markets.
Most impressive though was how, despite the massive amount of data acquired for analyzing and processing, planning occurred at a rate that was 10 times faster than in the past.
The accomplishment earned Freudenberg Home and Cleaning Solutions the unique and well-deserved distinction as a 2022 SAP Innovation Award winner in the 50th Anniversary Legend category. More significantly, like companies everywhere that have benefited from digital acceleration, Freudenberg has begun rethinking the future, using the current momentum to extend its solution to other business functions.
Claudio Muruzabal is president of Cloud Success Services at SAP.