MANN+HUMMEL scales process standardization with Celonis - with a strong focus on value creation
- Celonis is helping the German-based company, MANN+HUMMEL, migrate to SAP S/4HANA and has built out a Center of Excellence
Leading German filtration company MANN+HUMMEL has adopted Celonis’ Execution Management System (EMS) in a bid to scale process standardization across the organization, extract value and help with its migration to SAP S/4HANA.
MANN+HUMMEL’s adoption of Celonis, and its use of process mining, began back in 2020 after the company ran an ‘ideation jam’ with all of its 22,000 employees, asking them their thoughts on the progress of digitalization in operations - including logistics, production and manufacturing.
Speaking with Jean-Marc Erieau, Director of Process Mining and Execution Management at MANN+HUMMEL, he explains that the ideation jam generated approximately 1,400 ideas. However, when his team attempted to put these in action and scale them, it soon became apparent that there were areas of the business that weren’t standardized enough to adapt. He says:
That was the starting point, where I was thinking: we basically don’t know how some of the processes are running on our side.
We realized that we need to get an understanding. And that’s when we started to talk to Celonis. We discussed making a proof of concept in logistics and with the goods receipt process.
Erieau has written publicly about how he started with logistics because he wanted to understand the “true global standardization level” of millions of incoming deliveries and put-always in all of MANN+HUMMEL’s manufacturing sites and warehouses, using process mining techniques.
However, interestingly, Erieau also admits that this isn’t the approach he would take if given another opportunity. And the reason is quite a sensible one and useful advice for other organizations. He explains that by fragmenting the value for process standardization across 60+ different sites, the ability to leverage value and gain momentum for further process mining across the implementation is minimized. Erieau says:
You have to apply different levers everywhere to get something done. That’s a learning from the past two years. If you look into a process like AR or AP, in a shared service center, then you have a much bigger lever - because your five billion sales are running through the shared service center. This is of course much easier than splitting down the five billion to sixty or seventy sites around the globe.
An example of a use case Erieau provides of why process standardization is important to MANN+HUMMEL’s digital projects, focuses on the use of scanners to make bookings. This was an idea that was put forward by employees, but when looking at how to achieve this, it became apparent that MANN+HUMMEL had 30 different transactions inside SAP that would have been necessary to support this. He explains:
They have not been standardized across all the different production sites. So that would mean we would have to adapt to all these different transactions - and that’s a lot of money we would have to invest. That’s about a lack of standardization.
We have been running SAP for 20 years and we have developed a lot of programme in all the different sites. On the one hand that’s good in terms of efficiency, locally, but if you look at it through the lens of standardization and putting processes on top, this doesn’t support that.
This in turn feeds into the other ambition for Celonis EMS at MANN+HUMMEL - supporting the company’s migration to SAP S/4HANA. Erieau and his team are using Celonis to map the processes and derive standardization when rolling out S/4. Erieau says:
The idea is that the S/4HANA transformation is more of the long term approach, through to 2025. And on the way to do that transformation we are using Celonis to get some improvements done and prepare for the standardization.
Doing this since last year, we now have accounts receivables, accounts payables, order management, production planning, plant maintenance - a lot of specialist solutions too. I would say all the major process areas we are already covering.
MANN+HUMMEL is progressing its process standardization using Celonis via the creation of Center of Excellence, which it has spun up in collaboration with Accenture, and is based in India. Erieau says:
Going through the last year we’ve added more and more resources to our own Center of Excellence. And now we are more or less ready to do the tasks ourselves.
Erieau adds that he takes a dogged approach to assessing the value of process standardization and deciding where to invest. He is honest that this hasn’t always worked out the way he hoped, but that the prioritization of value does keep the projects focused. Erieau:
We are highly focused on value creation. We always try to ask first: what is the value that we would like to generate? What is the action I will put on or in the process? And what will the change be in the process that is then driving the value?
I’m sure it’s sometimes annoying having me ask all the time: ‘what is the value? What is the value?’ But I think it makes sure, at least, that we are thinking about: what is the action? Because if you don’t know the action, there’s no value. That’s something that we always see when we start to iterate in development. If we are not clear about the value, we iterate and iterate.
And in terms of how this value is measured, Erieau explains:
When we started last year we always started with a minimum viable product, an MVP. We started with two or three user stories, writing down exactly what they wanted to do in the process.
And then we tried to calculate it, basically asking: what is the rework rate? If I have a 10% rework, which costs me 2 minutes per user, then I get an understanding about the value.
I can’t share specific values, but I can tell you that we have some very interesting use cases where we have created significant value. And then we have use cases where we have struggled to create value. So we have both.
But I would look into where you have a dense value stream. Where you might have the ability to have a fast impact and faster scale at the end. And always question the value.