voestalpine uses Celonis to streamline Order Management, improve quality and accuracy in Production Planning, and intelligently steer its supply chain operations.
To stay one step ahead, companies need to embrace digital transformation as a continuous journey, not a one-time project. The leading steel and technology group voestalpine AG is an excellent example of just that.
The Austrian conglomerate has around 500 subsidiary companies operating in more than 50 countries around the globe. With its high-quality steel products and system solutions, it partners with businesses across industries ranging from automotive and consumer goods to aerospace. voestalpine steel, for example, is used in landmark buildings such as London’s Wembley Stadium, along with airplanes, drilling rigs, bridges, and wind turbines.
Given the scale and complexity of its operations, voestalpine’s CIO Stefan Huber was looking for a solution that would help unlock efficiency gains across the entire value chain, allowing voestalpine to better serve its customers, drive innovation, and become more agile.
One of Huber’s biggest challenges was to harmonize the company’s business processes and information flows. “I’m a Chief Information Officer, not a Chief Information Technology Officer,” he says. “So while technology is certainly important in my role, my focus is primarily on enabling the flow of information.”
To that end, process mapping has long been an important strategy for Huber — even when it was done manually. “The trouble was it was all very anecdotal and technology projects were based on business stakeholders’ understanding of processes. And as a result, some of those projects didn’t pan out as expected,” he says.
That’s why voestalpine chose Celonis Process Mining. Their transformation journey started in 2017 with two core processes — Order-to-Cash and Purchase-to-Pay — and quickly expanded to other areas, such as Quality/Production Planning.
Today, voestalpine has connected almost its entire IT landscape to Celonis, migrated from on-prem to Celonis’ Execution Management System (EMS) in the cloud within six weeks — and, more recently, were a supply chain management co-innovation partner, contributing to the creation of Celonis’ Inventory Management solution.
In record time, voestalpine has gained unprecedented visibility of the group’s overarching processes, as well as specific processes within group companies. “Celonis has turned up some surprises for business leads, revealing process flows that were significantly different from their expectations,” says Huber. The group is now turning these insights into real business outcomes, and driving automation across many of its processes.
To help drive adoption and streamline implementations of Celonis, voestalpine put together a governance team comprising IT and other consultants from across the group’s four divisions: Steel, High Performance Metals, Metal Engineering, and Metal Forming. This team has rolled out process mining projects to approximately 30 of voestalpine’s organizations. “voestalpine is a large, decentralized organization, so bringing people from different parts of the business together has played an important part in our success — along with delivering proof of concepts and results quickly,” Huber says.
Take the voestalpine subsidiary, Böhler Welding, for example. It provides high-quality welding products and expert services around the world, processing more than 100,000 external customer orders every year. In its journey to establish a globally defined sales process, harmonize systems, and drive automation, the company faced one major challenge: a lack of transparency to find process gaps (order blocks, overdue orders, etc.) that hurt the business most, and the process intelligence to decide on the right countermeasures.
“In the past, it was tedious to analyze our process problems and also challenging to drill much deeper into root causes and the ripple effects these problems caused,” says Sylvia Kemmeni, Senior Specialist Global Sales Process & System at Böhler Welding. While they could see in SAP how many orders had been changed or were overdue, the systems wouldn’t answer vital questions like what exactly had changed, and — more importantly — reveal the root cause of process issues. With the Celonis EMS, that changed.
“With Celonis, we can see our Order Management process end-to-end quickly and with detailed information,” says Kemmeni. As a result, Böhler Welding could finally identify the drivers of process gaps like unnecessary delivery blocks, which in turn helped reduce overdue orders by more than 50%. “We are doing extremely well, and are now working on eliminating overdue orders altogether.”
Based on the process insights, the company is working on decreasing the number of manual steps in order creation, reducing manual changes after order entry, and accelerating its quoting process as well as its order confirmation process.
As a large manufacturer, voestalpine naturally has a laser-targeted focus on its quality and production planning process. One of the group's subsidiaries, voestalpine Grobblech, produces 500,000 tons of steel each year, therefore pulling in huge volumes of data each day from its production plants, suppliers, and logistics partners.
But monitoring all this data for malfunctions and other anomalies was extremely time-consuming. That changed when Grobblech connected Celonis to its production and quality inspection processes.
“Seeing our processes visualized was definitely a game changer,” says Bernhard Neumann, Quality Engineer at Grobblech. “For the first time ever, we could visualize our production and quality processes with the highest possible transparency.” In the very first discovery meeting, Neumann and his team discovered more than 2,000 different planned variants in the production process.
Neumann’s team can now drill down into quality problems and find their root causes faster than ever. For the first time, they can look at specific malfunctions or deprecated products, and uncover root causes by filtering through categories such as raw material type, supplier, or customer request. “That way, we gain a clear, up-to-date summary of specific production routes and their performance.”
Using combinational logic, Neumann and his team were even able to define and monitor entirely new KPIs. “We can, for example, track and forecast our backlog of work for our quality inspections for the upcoming months, based on historical data,” he says. “That helps us allocate our resources more efficiently.”
One of voestalpine’s key transformation strategies has been to migrate infrastructure to the cloud wherever possible — and that included shifting from using Celonis on premise to the cloud-based EMS.
With Celonis’ help, voestalpine’s IT team migrated all their systems and processes in just three weeks, followed by an additional three weeks of user testing and handover.
The shift has delivered huge benefits. Beyond the expected reduction in maintenance needs and costs, the strategic decision to migrate the data of the companies means that any subsidiary company ready to start optimizing or transforming their processes can get up and running and see value extremely fast. “Our project teams are already seeing results, typically within a week,” says Huber.
“It has also given us far more capacity, improved performance, and better SLAs,” he adds. In addition, voestalpine can now take advantage of advanced EMS capabilities, such as Real-time Data Ingestion, Action Flows, and Process Simulation. Subsidiary Grobblech, for example, is using Action Flows to systematically monitor defects in its raw materials and work with suppliers on solutions.
Neumann and the Quality team at Grobblech now get a single overview of customer requests, raw material quality, and deprecations. “We can see, for example, which customer requests lead to a high number of deprecations, meaning that either customer specifications may be too complex or we need another kind of raw material.”
In the near future, Grobblech wants to roll out Celonis’ planning and simulation capabilities to the Quality department. With the Celonis quality cockpit, the team can see how much time they will need to build specific products and how many customer orders needed to be reworked or be replaced. “This will open up new possibilities to better plan workloads and allocate our resources in the future,” says Neumann.
For voestalpine’s High Performance Metals (HPM) division, managing the supply chain and inventory is a top priority. “As a company, we are focused on reducing our working capital. It’s therefore vital to optimize our stock levels without sacrificing product availability for our customers,” explains Florian Kaisergruber, Process Excellence Manager at voestalpine HPM.
However, getting that balance right was challenging. Too often, the 60+ companies within the division used different data sources (BI tools, Excel, etc.) to get the information they needed. “But as a division, we need to speak the same language and stick to the same rule set along the supply chain,” says Kaisergruber.
Already a well-established tool in the division, Celonis was HPM’s choice when looking for a supply chain management solution that would unify purchasing, sales, and inventory data in a single, user-friendly platform. The answer was Celonis’ Inventory Management solution. Since the start of its development in October 2020, the app has become a single source of truth for 150 users working on the supply chain.
“We can now not only identify materials with a negative impact on working capital and stock on hand, but discover trends and send early alerts to users to investigate problems and proactively take action,” says Kaisergruber. That includes resolving process gaps like overstocking, understocking, slow-moving stock, stock-outs, and obsolete stock, among others.
Overall, the app has tremendously improved the reporting and collaboration between all stakeholders across the supply chain. To name one example: HPM is propagating sales forecasts along the network to help suppliers prioritize material delivery to sales sites and prevent process gaps such as stock-outs or overstock. Its customer service teams, in turn, have a 100% accurate understanding of supplier reliability, can meet promised delivery dates — and therefore drive customer satisfaction.
“It’s no longer about only looking at one company or team as an island, but being able to see the full picture across all our SAP systems, other data sources, and companies in our division with a single tool,” adds Kaisergruber.
Having seen these successes, voestalpine’s CIO Stefan Huber and his team have a simple but ambitious plan going forward: “We want to use Celonis in new ways, for more processes, and for more of our companies.”