Optimal production
planning

Due to the strong growth and the resulting heterogeneous process landscape the seven Hügli Group production sites each had different ERP systems. The strong networking between the different sites made a precise planning of demand, production and needs very difficult. Reconciling inventory levels across the production sites was also a time-consuming task as information was exchanged electronically, by telephone and by email. The result was redundancies, a lack of transparency and efficiency, and a high need for coordination between the individual sites.

“We were faced with the task of adjusting and optimising our planning process. We would be making the shift from planning on the basis of historical data, to a future-oriented needs planning at different production sites that takes into account the inter-company processes involved,” explained COO Dirk Balzer. This idea was that this would be supported by a new ERP system.

Automated demand planning and sales forecasts

The hope was that new software and integrated tools would optimise and automate the processes, increase the efficiency of inter-company processing and so increase overall transparency. Hügli was looking for a future-oriented system with modern technology that would help them to improve their performance. As a large part of the company’s wide variety of items are make-to-stock, they wanted to avoid overproduction while still being able to stick to delivery deadlines. As Dirk Balzer explained, “Demand planning and sales forecasts that are as accurate and automated as possible play a very important role here.”

Another important factor that the new software solution had to take into account was ensuring complete loss transparency. “Until now, we have been unable to precisely assign the loss of several thousand articles and 1200 raw materials due to incongruent systems and names,” explained Tobias Shibli, Group CIO & Head of Business Development of the Hügli Group. It was not clear whether the issues were to do with material losses or high production costs. To help the group optimise the processes further, the articles and raw materials had to be made fully traceable.

Overall, the Hügli Group hoped that the new software would ensure uniform processes and procedures, and that it would bring greater planning security, transparency, efficiency and cost optimisation across all areas of the company.

After evaluating several different systems, the Hügli Group settled on SAP S/4HANA with the Integrated Business Planning (IBP), Condition Contract Management (CCM) and Recycling Administration (REA) additional SAP solutions. consolut accompanied the project as a SAP partner.

The IBP is a cloud solution that was specially developed for need, production and procurement planning. “With this solution I can now derive forecasts based on historic and current order data with regards to when something is produced and which material needs to be procured to enable an optimal throughput in production and in the warehouse,” explained Dirk Balzer. Thomas Neumann, SAP Logistics Team Leader at consolut, added, “For Hügli, forecasting seasonal business was particularly important.” The planning process will be supported by the PP/DS SAP components which enable a detailed, precise production planning, thus ensuring that the day-to-day needs of the company are covered.

SAP S/4HANA was introduced at the company’s largest site, Hügli Nahrungsmittel GmbH in Radolfzell, which has around 760 employees, at the end of June 2023. The launch went without a hitch.

“We already have a significantly higher degree of transparency in our production at the Radolfzell site,” explained Dirk Balzer. He also highlighted the new possibilities in the long-term planning and optimisation thanks to the IBP and PP/DS planning tools. Now they can take care of their needs planning up to twelve months in advance. With IBP they can even simulate how the needs or the production capacities will develop with additional orders. The group has also activated a cost calculation to allow them to better track the production costs of individual products.

The Hügli Group is currently in the optimisation phase at the Radolfzell site. Change management and a high management attention remain important as up to 500 users are having to get to grips with the new ERP system. As CEO Thomas Bodenmann summed it up, “The gradual roll-out of SAP S/4HANA to the remaining six production sites will result in harmonised business processes throughout the group and will help us to work in a faster, more streamlined and metrics-oriented way.”

consolut will return to support this further roll-out. As Tobias Shibli explained, “It was important that consolut was not only there to implement the solution but also to advise us and to work together with us as a partner. Never change a winning Team!“