Timken: Creating Value through Enhanced Process and System Redesign
The Timken Company is a United States-based global manufacturer of friction management and power transmission solutions to diverse markets, ranging from aerospace to health care. Over the past few years, Timken aggressively transformed its business, refining its vision as well as its product portfolio. The acquisition of The Torrington Company, which increased the size of Timken by almost 50 percent, significantly expanded its products and engineering capabilities, but also resulted in duplication of systems and strains on the company infrastructure.
Post-acquisition, Timken recognized it needed a global infrastructure that reduced the complexity of the business environment while optimizing the company’s operations and supporting its continued growth. To achieve these objectives, Timken turned to Accenture to assist with both business process redesign of functions such as engineering, warehousing and logistics, and to replace a large portion of Timken’s systems infrastructure with an integrated enterprise resource planning (ERP) system based on SAP R/3.
In its role as system integrator and business consultant, Accenture developed a global blueprint of standard processes such as order-to-cash and procure-to-pay to deploy across the organization to optimize operations, support the global supply chain and show one's face to global markets and customers.
After a successful pilot of the redesigned processes in Timken’s Canadian operations, Accenture designed a global rollout program to be completed in 2010. Today, most of Timken’s businesses are operating on one business platform with one set of processes and leading practices, with minimal redundancies.
As a result, Timken is enjoying significant benefits including:
- Enhanced ability to aggregate and monitor incoming global demand.
- Improved customer service enabled by greater accuracy and faster response times.
- More efficient intercompany replenishment and forecasting that improved demand and mix accuracy by 10 percent.
- Reduced inventory levels through alignment with customer service objectives.
- Consistent business framework to respond to global customers.
- Consolidated purchasing activities and distribution channels.
To ensure that its SAP applications continue to match current business needs, Timken entered into a five-year application outsourcing arrangement with Accenture.
Accenture Consumer Solution in Action at Coty Inc.
Coty Inc.—one of the world’s leading manufacturers and marketers of personal fragrances—embarked on a program to harmonize 50 disparate legacy applications on an SAP platform. Coty had evolved organically and through acquisitions to a point where there were numerous systems in place, resulting in a complex, expensive IT organization that was inflexible and not able to provide necessary, harmonized data to business managers. Because the company’s growth plans included significant acquisitions, it was imperative that Coty develop the capability to integrate new businesses efficiently and at lower costs.
Given Coty’s challenges and aspirations, Accenture leveraged Accenture Consumer Solution to create a "g‘Global Design’ design" that included:
- Common Master Data concept for chart of Accounts and Material Master.
- A common SAP ERP platform for 12 countries and over more than 2,000 users.
- Training materials and user support tools, including having Accenture support its Coty's help desk function.
- A shared repository of documentation to embed organizational learnings.
The Accenture Consumer Solution was used to align business processes and data among locations, centralize the IT organization, as well as improve processes and automation to facilitate inter-company flows, three-way matching purchasing flow, month-end close and corporate reporting.
Application Maintenance and Basis support was outsourced to save costs and increase system performance and innovation. Coty now relies primarily on ECC 6.0 and BW 7.0 to create a simplified global footprint in terms of systems, infrastructure and planning. Coty can tackle various strategic and operational challenges more efficiently.
The results of Coty’s adoption of several elements of the Accenture Consumer Solution include:
- Coty was able to integrate the acquisitions of Calvin Klein cosmetics from Unilever (2006) and Del Labs (2008) with little disturbance to daily operations (a two-day cut-over to new systems was accomplished in both cases).
- Coty enjoyed both an increase in revenues of 38 percent (without adding significant staff) as a result of the standardized, best-practice processes and flexible systems put in place, and a substantial reduction in total cost of ownership of IT systems.
- The Global Design has been successfully implemented in North America and Europe.
Accenture continues to team with Coty to assist in the rollout of the core solution to Asia, Australia and new businesses, as well as the maintenance and support of its SAP applications.