PTC > Case Studies > How Metso implemented Service Parts Management (SPM) in the Cloud to unearth value from its global supply chain

How Metso implemented Service Parts Management (SPM) in the Cloud to unearth value from its global supply chain

PTC Logo
Customer Company Size
Large Corporate
Region
  • Europe
Country
  • Finland
Product
  • PTC’s Service Parts Management (SPM)
  • Multi Echelon Optimization
  • PTC Cloud Services
Tech Stack
  • Cloud Computing
  • ERP Integration
  • Inventory Management System
Implementation Scale
  • Enterprise-wide Deployment
Impact Metrics
  • Cost Savings
  • Productivity Improvements
Technology Category
  • Platform as a Service (PaaS) - Data Management Platforms
  • Infrastructure as a Service (IaaS) - Cloud Computing
Applicable Industries
  • Mining
  • Oil & Gas
  • Recycling & Waste Management
Applicable Functions
  • Logistics & Transportation
  • Procurement
Use Cases
  • Supply Chain Visibility
  • Inventory Management
  • Demand Planning & Forecasting
Services
  • Cloud Planning, Design & Implementation Services
  • System Integration
About The Customer
Metso is a world-leading industrial company serving the mining, aggregates, recycling, oil, gas, pulp, paper, and process industries. The company is headquartered in Helsinki, Finland, and reported net sales of EUR 2.6 billion in 2016. Metso operates a global network of over 80 service centers, services professionals, and employs over 11,000 people in more than 50 countries. The company's operations are spread across 39 locations, each of which used a global inventory management system. However, the inventory at each location was managed independently and isolated from the inventory in the entire Metso supply chain.
The Challenge
Metso, a world-leading industrial company, was facing challenges with its global supply chain. The company was using a location-based, on-shelf availability model, which resulted in isolated and independently managed inventories across its 39 locations. This approach was inefficient and reduced Metso's ability to serve its customers effectively. The company also had to manage intricate material flows, making it difficult to predict part lead time. Furthermore, the constraints of a legacy system and a focus on individual supply issues rather than broader strategic improvements were hindering Metso's growth and profitability. The company needed a solution that could match its complicated network and grow with its business.
The Solution
Metso adopted PTC’s Service Parts Management (SPM) with Multi Echelon Optimization to manage its global supply chain more efficiently. The solution allowed Metso to move from a location-based planning to planning the supply chain as a whole. The implementation of SPM started with a pilot phase in June 2014. During the initial months, Metso's cost of inventory increased as the system evaluated product mix and procured the optimal inventory levels. However, once the right parts were procured in the right locations, inventory stopped increasing and started to go down. The design, build, and implementation of the project took place over nine months, with a highly focused project team dedicated to the launch. Much of the team’s focus was on change management and master data as the go-live would be simultaneous in all the 39 locations. SPM was integrated into Metso's global SAP, improving efficiency.
Operational Impact
  • Metso was able to manage its parts more holistically and connect its 39 locations, leading to improved efficiency and cost savings.
  • The implementation of SPM allowed Metso to evaluate product mix and procure the optimal inventory levels, leading to a decrease in inventory cost after the initial increase.
  • The integration of SPM into Metso's global SAP improved efficiency and made implementation easier.
  • The implementation of SPM allowed Metso to pivot quickly in a changing marketplace.
Quantitative Benefit
  • The pilot phase of SPM implementation resulted in savings of more than EUR 30 million.
  • The addition of the MultiEchelon Optimization Phase 2 module in October 2015 resulted in an additional EUR 11.6 million in inventory cost reductions.
  • The inventory turn had increased by 18%.

Case Study missing?

Start adding your own!

Register with your work email and create a new case study profile for your business.

Add New Record

Related Case Studies.

Contact us

Let's talk!
* Required
* Required
* Required
* Invalid email address
By submitting this form, you agree that IoT ONE may contact you with insights and marketing messaging.
No thanks, I don't want to receive any marketing emails from IoT ONE.
Submit

Thank you for your message!
We will contact you soon.