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Client: Leading global industrial manufacturer
Our Role: PwC helped the client create a connected enterprise and connected supply chain capable of delivering the right data to the right place at the right time.
Industry: Industrial Manufacturing
Solution: Connected Supply Chain
Transforming a jumble of loosely linked units into a digitally connected enterprise
What we had here was a failure to communicate. Our client, a leading global industrial manufacturer, operated as a fragmented archipelago of divisions and business units, each with its own business model, IT landscape, data architecture, manufacturing processes and terminology and toolsets. Despite strenuous efforts to standardize work and systems within and across the various divisions, our client struggled to synchronize capabilities, processes and operations across divisions and functions and align them in support of a single, unified strategy.
As a result, the company, which had built itself up through literally decades of acquisitions, fought a constant struggle against inefficiency brought on by redundant business systems (including dozens of different ERP instances), siloed processes, a maze-like management hierarchy and incomplete systems integration. Laboring under these constraints, the company was plagued by late product deliveries, supply shortages that required last-minute fire drills to resolve and suboptimal profit margins.
“This is a multiyear journey, and we haven’t reached the end yet. But in two years we will have standard enterprise metrics that will help us make decisions in the long term. We can figure out where to invest to really improve the organization in truly impactful ways. And those add up to real dollar savings.”
Designing a digital architecture to harmonize operations and align them with strategy
Our client’s chief technology officer at the time approached PwC, a longtime advisor to the company, to help design a data infrastructure and architecture that would encompass the company’s various ERP, product lifecycle management (PLM), manufacturing execution system (MES) and CRM systems. A common digital architecture would, in turn, enable divisions and functions to share data in a standard format and thus coordinate their activities to serve their customers. For example, such a digital architecture could draw on the same contract data to create a list of parts for the supply chain function, enumerate design parameters for the design team, establish the connected supply chain and issue manufacturing instructions to the production team.
To create this architecture, the PwC team, composed of professionals with expertise in SAP ERP systems, MES systems and Salesforce CRM systems, as well as professionals skilled in process engineering, systems integration and other disciplines, worked with the client to create a connected enterprise and connected supply chain capable of delivering the right data to the right place at the right time.
That undertaking entailed cleaning and standardizing the data residing in our client’s many disparate systems. It revealed that the data definitions used by some units clashed with those of other units. There was also a problem of terminological confusion: different units used different terms to refer to the same part or process or used the same terminology to refer to subtly different processes. A large part of our job was to develop a common language and a single trusted source of data that the entire company could use. And then we delivered to executives and management a view of this content through dashboards powered by data analytics software and data visualization tools.
Once the data was standardized and accessible to the internal stakeholders who needed to see it, we worked with them to identify where our client was duplicating its efforts and where it could simplify activities that created value for our client and its customers. Those activities, which the client referred to as end-to-end operational value streams, had multiplied over the years as the client acquired more companies, each with its own idiosyncratic data structures and processes. By mapping those structures and processes and pinpointing where they overlapped, we reduced the number of operational value streams from the hundreds to the mid-double digits. Each value stream rolled up to one of eight strategic imperatives and enabled the company to link every operational activity to its overall competitive strategy.
In addition to that work, PwC developed a methodology to configure IT systems at every level of the company to meet our client’s strategic requirements. That methodology, which the client has embraced and adopted for its internal use, ensures that critical work products – requirements, data entities, use cases, metrics – are captured and provide the foundation for systems design. At the same time, our methodology enables the client to map data across the digital thread and support digital twins. And finally, we helped to establish that the company stayed current on its critical business capabilities, which are identified and optimized within the digital architecture, enabling the company to improve, evolve or phase them out as needed.
Despite some initial skepticism about mapping value streams, our client has embraced the approach and is applying it to every level of the organization. And the company has engaged us to assist in that effort, starting with its PLM system, to ensure that even the smallest activity links to the overall enterprise strategy. This transformation has enabled management to draw the roadmap to the company’s next-generation capabilities, including additive manufacturing, smart factory and digital twin.
“What we’ve really done is help our client prepare to meet the future, whatever it holds. Working closely with people at all levels of the company, we have been able to disaggregate end-to-end operational value stream elements, document them and add them to the operations catalog. Now leadership knows in detail how to run the business going forward.”
A de-cluttered organization starts to move forward as one
The client now has a detailed map of more than 3,000 processes within about two dozen operational value streams, along with definitions of roles and KPIs. The company has identified redundant business applications and is on its way to reducing the number of business applications by more than half. And for the first time, the client can now digitally model the shape of the enterprise to account for any new program and simulate what it implies for its digital architecture, digital thread and connected supply chain.
Ready to maximize for the future—becoming smarter, more agile and adaptive?
See how we can help elevate your operations, visit www.pwc.com/us/en/library/fit-for-growth/connected-supply-chain.html.
Managing Director, PwC US