Celonis Case Studies Hexion's Supply Chain Transformation with Celonis

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	Hexion's Supply Chain Transformation with Celonis Celonis

Hexion's Supply Chain Transformation with Celonis

Celonis

Technology Category	Networks & Connectivity - NFC Sensors - Autonomous Driving Sensors
Applicable Industries	Life Sciences Transportation
Applicable Functions	Logistics & Transportation Procurement
Use Cases	Demand Planning & Forecasting Supply Chain Visibility
Services	System Integration
Challenge	Hexion, a specialty chemical manufacturer, was grappling with a large, complex supply chain that had come under extreme pressure due to the impact of COVID-19, global logistics issues, storms, material shortages, and reliability issues. The company's system and process landscape had grown significantly over the years, making it difficult to identify pain points in a data-driven manner and understand the ripple effect of undesirable process steps. Their supply chain teams often found themselves stuck in firefighting mode. For instance, while their Order Management team could see the frequency of order changes in their systems, they could not understand which customers were driving these changes or quantify the impact these changes had on adjacent processes like Production Planning or Procurement. Read More
About Customer	Hexion is a specialty chemical manufacturer that has been in operation for over 100 years. The company manufactures specialty chemicals and performance materials for more than 1,200 companies across 60 countries. Hexion's products can be found in a wide range of items, from cars and trucks to wind turbines, electronics, aircraft, and buildings. The Ohio-based company operates more than 30 manufacturing and research and development facilities around the world. Hexion's mission is to make the world 'better, safer, and cleaner' through the boundaries of chemistry. Read More
Solution	Hexion turned to Celonis for a solution. The company is now maximizing execution across five of their core processes with the Execution Management System (EMS): Order-to-Cash, Procure-to-Pay, Accounts Payable, Accounts Receivable, and Production Planning. Hexion started their EMS journey in Order-to-Cash, one of their most complex processes. With Celonis, they found 10,000 different variants in their Order-to-Cash process. To tackle this complexity, Hexion targeted the low-hanging fruit first. For example, they noticed that incorrect routes in their master data were driving a high number of route changes, causing significantly longer delivery times. By making simple changes in their master data, they were able to reduce route changes by 45%. Leveraging Celonis’ intelligent automation capabilities, Hexion’s teams also get notified about any blocks on orders that are at risk of a shipping delay. This has allowed the company to investigate these blocks proactively, reducing the time from credit hold release to shipment from approximately 11 to five days. Read More Log in to view content
Contents

Technology Category

Networks & Connectivity - NFC

Sensors - Autonomous Driving Sensors

Applicable Industries

Life Sciences

Transportation

Applicable Functions

Logistics & Transportation

Procurement

Use Cases

Demand Planning & Forecasting

Supply Chain Visibility

Services

System Integration

Challenge

Hexion, a specialty chemical manufacturer, was grappling with a large, complex supply chain that had come under extreme pressure due to the impact of COVID-19, global logistics issues, storms, material shortages, and reliability issues. The company's system and process landscape had grown significantly over the years, making it difficult to identify pain points in a data-driven manner and understand the ripple effect of undesirable process steps. Their supply chain teams often found themselves stuck in firefighting mode. For instance, while their Order Management team could see the frequency of order changes in their systems, they could not understand which customers were driving these changes or quantify the impact these changes had on adjacent processes like Production Planning or Procurement.

About Customer

Hexion is a specialty chemical manufacturer that has been in operation for over 100 years. The company manufactures specialty chemicals and performance materials for more than 1,200 companies across 60 countries. Hexion's products can be found in a wide range of items, from cars and trucks to wind turbines, electronics, aircraft, and buildings. The Ohio-based company operates more than 30 manufacturing and research and development facilities around the world. Hexion's mission is to make the world 'better, safer, and cleaner' through the boundaries of chemistry.

Solution

Hexion turned to Celonis for a solution. The company is now maximizing execution across five of their core processes with the Execution Management System (EMS): Order-to-Cash, Procure-to-Pay, Accounts Payable, Accounts Receivable, and Production Planning. Hexion started their EMS journey in Order-to-Cash, one of their most complex processes. With Celonis, they found 10,000 different variants in their Order-to-Cash process. To tackle this complexity, Hexion targeted the low-hanging fruit first. For example, they noticed that incorrect routes in their master data were driving a high number of route changes, causing significantly longer delivery times. By making simple changes in their master data, they were able to reduce route changes by 45%. Leveraging Celonis’ intelligent automation capabilities, Hexion’s teams also get notified about any blocks on orders that are at risk of a shipping delay. This has allowed the company to investigate these blocks proactively, reducing the time from credit hold release to shipment from approximately 11 to five days.

Impact #1	With the help of Celonis, Hexion has been able to proactively tackle supply chain disruptions, free up millions in working capital, and give valuable time back to their teams. The company now has comprehensive, real-time transparency into their operations, allowing them to respond quickly to supply chain disruptions and get ahead of them. The ability to connect different processes and dissimilar IT systems has been particularly beneficial in Hexion’s Production Planning. The company can now follow an incoming order all the way through to Production Planning to precisely calculate the financial impact of last-minute order changes. This has led to smoother operations and reduced disruption. Looking ahead, Hexion plans to use Celonis for their biggest transformation project yet: measuring the cost of process changes through their entire value chain.

Impact #1

With the help of Celonis, Hexion has been able to proactively tackle supply chain disruptions, free up millions in working capital, and give valuable time back to their teams. The company now has comprehensive, real-time transparency into their operations, allowing them to respond quickly to supply chain disruptions and get ahead of them. The ability to connect different processes and dissimilar IT systems has been particularly beneficial in Hexion’s Production Planning. The company can now follow an incoming order all the way through to Production Planning to precisely calculate the financial impact of last-minute order changes. This has led to smoother operations and reduced disruption. Looking ahead, Hexion plans to use Celonis for their biggest transformation project yet: measuring the cost of process changes through their entire value chain.

Benefit #1	45% reduction in route changes from production to customer
Benefit #2	50% reduction in days to pay for supplier financing, equating to several million dollars in working capital reduction
Benefit #3	50% decrease in unearned cash discounts paid out

Benefit #1

45% reduction in route changes from production to customer

Benefit #2

50% reduction in days to pay for supplier financing, equating to several million dollars in working capital reduction

Benefit #3

50% decrease in unearned cash discounts paid out

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Overview

Hexion's Supply Chain Transformation with Celonis

Operational Impact

Quantitative Benefit