After freeing up a massive $1.3 billion in Finance, GE HealthCare is now tapping into Order-to-Cash with Celonis – driving significant impact on cash flow and on-time delivery.
In their efforts to make therapies more precise and patients healthier, GE HealthCare is tapping into new technologies wherever possible.
Think of things like AI and Deep Learning that enable their MRI machines to scan the human heart within a single heartbeat or help clinicians identify fetal abnormalities at an early stage to provide the best care for mom and baby.
But GE HealthCare is also using technology to transform their business from within.
In their quest for innovation and efficiency in a competitive market, the company is betting on process mining vendor Celonis, to streamline operations and unlock working capital. And it’s clearly working.
Starting their Celonis journey in Finance in 2020, GE HealthCare has already freed up a massive $1.3 billion in one year. Now, they’re tackling Order-to-Cash, going after hundreds of millions of dollars in one of their biggest businesses, imaging.
“Our big challenge was to get an end-to-end view of the entire value chain, in order to coordinate shipments, communicate delivery dates to customers, and speed up cash flow”, said Steffen Haerterich, Imaging Transformation Leader at GE HealthCare, during his keynote interview at the Celonis World Tour 2023 in New York.
Haerterich is leading GE HealthCare’s imaging transformation, one of the four “big rock” initiatives the company has outlined for 2023.
“But that’s easier said than done, because our supply chain is extremely complex”, said Haerterich. After all, the high-tech components inside an MRI or CT scan machine come from all over the world. And delivery is no walk in the park either.
“It’s not as simple as dropping an Amazon package at someone’s front door.
You need to get the construction site ready, install chillers, request permits to block roads, organize cranes – there’s a lot of stuff that needs to happen.”
It’s no surprise that GE HealthCare’s delivery cycles can widely vary, based on regional infrastructure. While the medtech company can deliver an MRI machine in as fast as two days in the US, it can take up to eight weeks in rural parts of Africa.
Complexity is their number one challenge on all things back end too.
“Once an order comes in, we have multiple teams using all kinds of tools that don’t talk to each other. So figuring out why shipments were delayed was a very manual exercise,” explained Haertich.
The trickiest part: One single line item can delay an entire order – holding up revenue until late in the quarter.
In the fall of 2022, Haerterich’s team started a pilot project in Fulfillment for one of their biggest segments within imaging - CT in the US and Canada.
The technical part was quickly resolved: “We already had a lot of data from different source systems digested in Celonis and a good overview of our Fulfillment.” The speed wowed not just Haerterich, but the Fulfillment team, too.
Within 6 weeks, they got the visibility into their full orders, line item by line item.
For the first time, GE HealthCare’s Supply Chain teams can now see leading indicators for delayed orders, understand delivery date changes, and see what actions they need to take to deliver on-time and in-full — all in one platform.
“There’s no other tool that gives us that level of visibility.”
“We can zoom into a single line item and zoom out to see the status of the full order,” said Haertich on stage.
The results speak for themselves. With Celonis, GE HealthCare:
Sped up cash flow by 2 weeks
Generated millions in free cash flow in a single quarter
Shortened their fulfilment cycle by 18 days
Which means their customers – like hospitals and clinicians – get their orders faster, helping GE HealthCare’s Collections team in turn to bring cash through the door quicker. Win-win.
For Haerterich and his team, that’s just the beginning. The next step is to go after “the big bucks,” as he put it. Rolling out the Order-to-Cash use case globally, “we’re hoping to free up hundreds of millions of dollars. And that’s only what we know we can go after (in Imaging). The real potential is so much bigger.”
An improved cash flow is just one of the wins GE HealthCare saw in their supply chain transformation journey with Celonis. To unlock more value for both customers and shareholders, the business wants to implement a new cultural mindset.
“We’re slowly transitioning from a ‘win the quarter’ to a ‘win the week’ mindset,” says the transformation leader, with the goal to deliver on-time and in-full at a much higher rate.
For him, Celonis is a key enabler to keep them on track on this journey, facilitating discussions about orders and projected revenue each week, rather than towards the end of the quarter.
“It’s a completely different game, because we’re now going after things we didn’t know before.”
In the not too distant future, Haerterich hopes to use new Celonis features like Process Sphere to optimize GE HealthCare’s supply chain end-to-end.
“My mission is to make sure that everyone outside of Imaging understands what process mining is.” Despite the fast technical implementation, Haerterich said educating the business takes time.
But once his team showcased value in the range of hundreds of millions, Haerterich is convinced that new use cases will naturally pop up in other business segments too.
After all, he adds, GE HealthCare is all about a LEAN mindset and continuous process improvement - “so why wouldn’t we use process mining (for it)?”