Forward-looking planning ensures top-quality spare parts service

Seepex increases delivery reliability with increasingly automated scheduling

by Dietmar Henkler, Supply Chain Manager at Seepex, Andreas Capellmann and Dr.-Ing. Bernd Reineke, both Managing Directors of SCT GmbH

To optimize the scheduling of items to be produced and procured across three continents, the Bottrop-based pump manufacturer SEEPEX was looking for a more powerful IT solution and found it in the extremely user-friendly DISKOVER SCO scheduling management system from SCT Supply Chain Technologies.

SEEPEX is a leading global specialist in the field of pump technology and digital solutions with headquarters in Bottrop, North Rhine-Westphalia, and employs around 400 people in Germany – twice as many worldwide. At three production sites in the Ruhr region, the USA and China, the company manufactures progressing cavity pumps that can be used to pump materials of different viscosities, such as sludge or oil. The company’s pumps are used in oil production, water purification, agriculture and the food industry. More than 50,000 customers worldwide already trust SEEPEX when it comes to the supply and maintenance of pumps, many of which are in use 24/7 and for which SEEPEX stocks over 10,000 items.

Maintenance performance as a success factor

High-performance pumps have to work hard every day and unnecessary downtimes cost companies a lot of money. It is therefore important to have a smoothly functioning maintenance business, which SEEPEX is increasingly supporting with digital service concepts. Most spare parts must therefore be manufactured and stocked in such a way that repair work at the customer’s premises can always be carried out quickly. Every part must be available for immediate delivery, because stagnant pumps mean stagnant processes, which often automatically lead to a lack of sales. Delivery readiness must be correspondingly high, which can only be ensured through sophisticated production, stockpiling and procurement strategies. To ensure a high level of delivery readiness, the purchasing department therefore also pursues a differentiated second source strategy, which makes the scheduling task even more complex. Articles are sourced from the foreign subsidiaries in China and the USA on the one hand, while on the other hand a certain proportion of them also come from German second source suppliers in order to compensate for potential delays in the international supply chains.

The sale of spare parts accounts for half of the company’s turnover, as these high-performance pumps have to work hard every day. The maintenance business, which Seepex is increasingly supporting with digital service concepts, is therefore crucial. Most items must therefore be manufactured and stocked in such a way that repair work at the customer’s premises can always be carried out quickly. Every part must be available for immediate delivery, because stagnant pumps mean stagnant processes, which often automatically lead to a lack of sales. Delivery readiness must be correspondingly high, which can only be ensured through sophisticated production, stockpiling and procurement strategies. To ensure a high level of delivery readiness, the purchasing department therefore also pursues a differentiated second source strategy, which makes the scheduling task even more complex. Items are sourced from the foreign subsidiaries in China and the USA on the one hand, while a certain proportion of them also come from German second source suppliers in order to compensate for potential delays in the international supply chains.

From operational rescheduling…

For a long time, the company mastered its complex scheduling tasks with the help of the SAP/R3 ERP system. However, there were no clearly defined article-specific regulations for safety or reorder points for each individual article. In the end, the range of the individual stocks was correspondingly blurred, which is understandable with over 10,000 items. The requirements were readjusted according to incoming orders. However, the innovation leader wanted to further improve its internal processes and delivery readiness with an even more strategically oriented scheduling system that included forecasts based on historical data.

…towards strategic planning

In the course of the CIP processes, the desire also arose to intelligently automate the daily routine task of “rescheduling requirements”. For this reason, a dedicated scheduling management system was to supplement the ERP system used exclusively to date. Achieving a low inventory level – otherwise often particularly important when using such tools – was therefore less of a priority than transparent demand forecasting to ensure a high level of supply readiness. SEEPEX also attached particular importance to transparent rules and regulations for scheduling.

Before deciding on the right SCM system, the planning department of the pump manufacturer carried out extensive market research and was also advised by its own IT team, with the decision ultimately being made by the department together with the management. The decisive factors for the selection were a wide range of functions, simple operation and the option to purchase a continuous delivery rental model, so that no initial investment is required and only the ongoing use has to be financed depending on the number of users. The test version also quickly convinced the team of the tool’s suitability for everyday use. Thanks to its high practical relevance, the user interface impresses with its ease of use, easy-to-understand and easy-to-maintain sets of rules and the diverse, highly sophisticated forecasting procedures. “You won’t find such ease of use in the scheduling tools of established ERP users, despite the wide range of functions for basically every application,” explains Dietmar Henkler, Supply Chain Manager at SEEPEX.

“When we introduced DISKOVER SCO, we initially only tested individual article groups to see whether the forecasts met our requirements. After a few weeks, however, it quickly became clear that the results were excellent. We then planned all articles with the new tool in one go. The introductory phase, during which there are naturally also doubts as to whether everything is correct, was therefore quickly overcome,” explains Dietmar Henkler, Supply Chain Manager at SEEPEX.

A system implementation that does not require any business process adjustments

In addition, the tool was quick to install and the standardized interface meant that data could be transferred from the ERP system quickly and the system was installed and supplied with data within a few days, without the need to adapt business processes or database interfaces. The only prerequisite for the installation is the provision of a Windows or Linux server with remote access for the installation service and in live operation for the users, who all have secure access to the central Dispo server worldwide via a VMware console.

The provider also supported immediate operational readiness with preparatory training measures: It trained the employees in specific workshops, depending on their user role – from specialists to occasional users, in order to impart tailored knowledge to everyone with pinpoint accuracy, save time and not burden anyone with information that is not needed for their daily work. The Bottrop-based company also worked with the company in the run-up to the launch to develop a detailed interpretation of the key figures for delivery readiness and make them available in the system. As part of this project, which was supported by management consultants Abels & Kemmner, it was possible to create transparency for the management and the entire team as to which benchmark values and facts are ultimately used to measure the company in the long term. Today, SEEPEX enjoys an exceptionally high level of delivery readiness of 98 to 99% on a continuous basis. Previously, the values were significantly lower.

High efficiency through automated scheduling

The benefits of the new SCM system were already noticeable in SEEPEX’s day-to-day business in the first few weeks after its introduction. The previously customary individual examination of each individual requirement was no longer necessary. To ensure that the most important things are always done first, urgencies such as open planned orders, delayed deliveries or an imminent shortfall in safety stocks are now automatically visualized with the help of “alarm lists”.

In order to achieve a high degree of automation in the daily determination of requirements, the rules system in particular had to be equipped with all the parameter values required for automated scheduling when the system was introduced. This can be done comparatively quickly in implementation projects according to ABC/XYZ criteria or for particularly important suppliers, as it can be set across entire article groups. Later, however, it can also be set on a case-by-case basis for each individual item and supplier in order to ultimately ensure maximum confidence in the data quality. This is the only way to avoid manual interventions based on the dispatcher’s gut feeling. These are no longer necessary if everyone agrees with the adjustment of the set of rules and can understand how the individual elements interact with each other and that the appropriate algorithms then also deliver the best results.

Once the basic rules have been worked out, the new system automates the daily priorities extremely reliably and thus creates the space to concentrate on better structuring the customer-supplier conditions and on the few challenges that are the absolute exception to the rules. This is one of the key differences compared to the previous process: While supply management at SEEPEX initially only operated with a handful of rule value tables, their number has now grown to several dozen and has therefore become much more precise, which automatically reduces manual reworking. The majority of day-to-day business tasks thus become an easy and largely automated routine with a high degree of decision-making reliability. As a result, the scheduling team now saves almost half the time it had to invest before the system was introduced. At management level, the SCM tool ultimately sets the course for management by exception, so that management only has to intervene in truly exceptional cases or to define the second source strategy.

Individual solutions for global day-to-day business
However, the system was not able to meet all requirements right from the start. SCT, the manufacturer of the DISKOVER software, has integrated a special quota function into the DISKOVER SCO tool for the management of second source procurement, which automatically calculates the quantities to be supplied by each manufacturer according to a defined percentage distribution. Another attractive feature for SEEPEX in this context is the possibility of automatically turning the procurement requirements of the ordering location into the primary requirements of the supplying location, without the need for an official ERP booking process between the individual subsidiaries. As a result, this article can once again be planned completely independently of the initial customer order on the basis of its own rules and regulations. This is done as part of a single clearing run. SEEPEX’s globally distributed production sites ultimately became a single virtual factory. It doesn’t matter which ERP system is used at the respective location. All in all, a system solution with which the significantly better adjustment of the disposition could be achieved with considerably less effort.

Featured image: © by Seepex