Remeha reduces inventory cost with SAP APO Demand Planning

Days of Inventory Outstanding – the number of days a company keeps products in stock for sale – is a key KPI for boiler manufacturer Remeha. Therefore, the organization sought a solution to more sharply align production with demand. Remeha selected the Demand Planning module of SAP Advanced Planning and Optimization (APO). SAP partner Quinso executed the implementation, and did so quickly and purposefully. In fact, Remeha opted for a Rapid Deployment Solution.

Accurate demand forecasting is essential for organizations in Discrete Manufacturing. Because the better the production numbers match demand, the lower the inventory costs and the higher the service level. That’s why leading boiler manufacturer Remeha was looking for a way to predict demand in a more targeted way a few years back. “We were already working with a solution for demand planning,” says Jan Willem Rietdijk, Group IT Director of BDR Thermea. “But we wanted to reduce the Days of Inventory Outstanding even further and be able to check the quality of demand forecasts afterwards. To this end, a new tool was needed. After a careful selection process, we chose SAP APO Demand Planning.”

Rapid Deployment Solution

The selection of SAP APO Demand Planning had two main reasons. First, Remeha already works with an ERP system from SAP, which facilitates integration between the two systems. Second, SAP offers the solution as a Rapid Deployment Solution, which means that ninety percent is predefined. Rietdijk: “The Rapid Deployment approach appealed to me immediately. Because if you start from scratch, a project quickly becomes unmanageable. With a Rapid Deployment Solution, you stay within the lines and the implementation goes much faster.” The CIO does place an important side note. “For such a project to be successful, the organization as well as the implementation partner must be fully behind the method. Because more people means more wishlists And there is not always room for that with a predefined solution. It is important to stand firm
and make clear choices.”

Remeha sees significant improvement

Quinso and Remeha’s project team implemented the module with a lead time of just six months. And successfully, as the average inventory time is now significantly lower than before the implementation. Hubert Wezenberg, Business Development at Quinso: “With SAP APO Demand Planning, Remeha can now look a year ahead. Every month the forecasts are updated. In addition, we check afterwards to what extent the forecasts corresponded to reality. As a result, we now know with certainty that the forecasts are more accurate.” Rietdijk adds: “SAP APO Demand Planning also makes it possible for us to better predict the demand for individual parts, so that we can provide end users with the desired parts
can send directly. Our service has become stronger as a result.

Historical data + market intelligence

It is Remeha’s Production and Supply Planners who work with the application every day, but the impact goes far beyond that. Wezenberg: “The demand forecasts are not only based on historical data, but also on market intelligence data. A final planning proposal only comes after the Sales, Logistics and Planning departments have looked at the data. They can supplement the proposal based on their own perspective and experience. That results in a realistic picture that is supported throughout the entire organization.” Rietdijk: “Involvement of Sales is a prerequisite for broad adoption of the solution. SAP APO Demand Planning is fully embedded in the organization and Quinso definitely played a role in that.”

Quinso’s content expertise

Rietdijk looks back on a successful implementation and a good collaboration. “Quinso had a good story from the beginning. The consultants have a lot of subject matter expertise and are always thinking along. In addition, they stayed on time and within budget, and successfully managed the project, together with our own SAP experts from the Center of Excellence. Our planning team had to get used to it at the beginning, but now finds that the solution really helps them. Other companies in the holding company have already expressed interest in SAP APO Demand Planning. Fortunately, we now have the flexibility to expand it.”

About Remeha

Remeha is part of BDR Thermea. This is a leading global manufacturer and distributor of sustainable, smart climate and domestic hot water solutions, including associated services.

BDR Thermea employs 6,400 people across Europe and has an annual turnover of nearly €1.8 billion. The Group has a top market position in the main European countries and a strong position in the rapidly growing markets of Eastern Europe, Turkey, Russia, North America and China. In total, BDR Thermea operates in more than 70 countries worldwide.

BDR Thermea manufactures and markets some of the leading brands in the European heating products market. Under the following brand names: De Dietrich, Baxi, Brötje, Chappée, Baymak etc.

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