Michelin aligns its supply chain to a service-centric model
Innovative “Tires as a Service” offering uses Anaplan IBP for Automotive to deliver savings, efficiency, and alignment
What Anaplan brought to us is collaboration, alignment, one source of truth. We have now cut our inventory carrying costs by 20%.Tomasz Leszczynski, Head of Supply Operations, Michelin Connected Solutions Europe
20%
less tire assets (i.e., inventory) needed to maintain high service levels
20%
reduction in inventory carrying costs
25-50%
less time spent on forecasting across multiple departments
Michelin Connected Solutions Europe offers “Tires as a Service” to ease the lives of vehicle fleet managers. Shifting to a service-based model meant moving beyond traditional S&OP, so Michelin chose Anaplan IBP for Automotive, with built-in best practices and rapid time to value. With Anaplan, Michelin reduced inventory and associated costs, slashed forecasting time, and improved its ability to steer through a changing business environment.
A blown-out tire can blow out a transportation company’s entire schedule — and its profitability. So Michelin Connected Solutions Europe launched Tires as a Service, a solution that combines high-tech tires, performance optimization, and predictive maintenance. “We are not selling tires,” explains Tomasz Leszczynski, Head of Supply Operations at Michelin Connected Solutions Europe. “We are selling the kilometers that the vehicles of our customers run through time.”
The service is multifaceted, and the tire market is highly dynamic, so accurate sales and operations planning (S&OP) is crucial. However, heterogeneous systems and unclear processes forced Michelin’s stakeholders to waste hours discussing inputs and hypotheses instead of making decisions. “We needed everybody to be aligned and everybody to be knowledgeable of what is being discussed and what is planned,” Leszczynski recalls.
Moving beyond S&OP
To complement its existing sales and operations planning (S&OP) tools — which are strongly oriented to the needs of its traditional business — Michelin looked for a solution that could align with its new business model. “The main challenge that we are facing at this very moment is that we are in a very dynamic market where we need to anticipate certain issues,” Leszczynski explains. “The better we anticipate them, the better we are meeting our strategic objectives.”
They selected Anaplan Integrated Business Planning (IBP) for Automotive, capitalizing on built-in best practices and rapid time to value. “We were looking for alignment,” Leszczynski says. “The idea was to implement a standard operational planning process, and to gain efficiency by implementing Anaplan.”
Less inventory, better speed and performance
Michelin quickly saw benefits from its IBP approach, including reduced inventory and associated costs. “What Anaplan brought to us is collaboration, alignment, one source of truth,” Leszczynski notes. “We have now cut our inventory carrying cost by 20%.” The company also needs 20% less tire assets (i.e., inventory) to maintain high levels of customer service.
Dashboards in Anaplan make it easier to visualize the outputs of different plans, which improves communication between stakeholders and helps to steer the company in the right direction.
The new tools have also transformed the way that Michelin’s planning teams work, delivering 25% to 50% time-savings for forecasting processes that require input from multiple departments.
Leszczynski expects the improvements gained using Anaplan to build on each other. “The more we anticipate certain things, the better we are in terms of implementation of strategies and meeting company strategic objectives,” he says. “With Anaplan we are able to improve confidence in our decision-making process, and steer implementation of decisions accordingly.”
Tomasz Leszczynski, Head of Supply Operations, Michelin Connected Solutions: At Michelin, we are proposing the offers to our customers that are privileging use over possession. We are not selling tires. We are selling basically the kilometers that the vehicles of our customers run through time.
[The] main challenges that we are facing at the very moment is that we are in a very dynamic market where we need to anticipate certain issues. The better we anticipate them, the better we are meeting the strategic objectives.
We encountered a problem of lack of reliability of the way we forecasted. And important problems in terms of efficiency. To tackle this efficiency and the quality of inputs and problems, we needed everybody to be aligned and everybody to be knowledgeable of what is being discussed and what is planned.
What Anaplan brought to us is the collaboration, alignment, one source of truth. We have now cut our inventory carrying costs by 20%.
Before using Anaplan, we were simply not efficient. We encountered heterogeneous systems, the lack of clear processes, the boundaries of responsibilities and important time spent on discussing the hypotheses.
What is exciting about the future is that currently we're able to make use of data that was not possible 10 years ago. And at Michelin we have started to propose the service offerings that are really data-driven.
I'm Tomasz Leszczynski, the Head of Supply Operations for Michelin Connected Solutions Europe, and we plan with Anaplan.
