Timken: SAP-based Solutions

Founded in 1899, The Timken Co. is a US-based global manufacturer of friction management and power transmission solutions to diverse markets, including aerospace, automotive, construction, consumer, defense, energy, industrial equipment, health, heavy industry, power generation and rail. The company’s technologies and products can be found virtually everywhere equipment moves or power is transmitted, and in turn, help customers’ machinery and equipment run smoother, faster and more efficiently. Timken operates in 26 countries/territories and, in 2009, had 17,000 employees and generated revenues of US$3.1 billion.

Accenture assisted Timken with replacing a large portion of its systems infrastructure with an SAP-based enterprise resource planning (ERP) system, leading to one business platform and one set of processes that are driving improved operating efficiency and customer service.

Project ONE (“Our New Enterprise”), a five-year initiative designed to reduce the complexity of the business environment by improving processes and systems. The goal was to optimize the company’s operations and support Timken’s continued growth. To achieve its objectives for such a large-scale undertaking, Timken turned to Accenture.

At its core, Project ONE consisted of two workstreams:

• Business process redesign spanning key business functions, such as engineering, warehousing and logistics.

• The replacement of a large portion of Timken’s systems infrastructure with an integrated enterprise resource planning (ERP) system, based on SAP R/3.

Accenture’s role as system integrator and business consultant was to accomplish the huge scope of tasks associated with each of these two workstreams. In all, the challenge would entail coordinating some 8,000 activities and deploying the final solution to more than 85 sites around the world.

A key step in the project was validating the global blueprint through a pilot on Timken’s Canadian operations. After the pilot was completed, Accenture designed a global rollout program across the enterprise to be deployed in four waves of releases over three years. Each wave made successive progress in deploying the Project ONE solution based on Timken’s priorities around geographies and businesses.

Due to the magnitude of the deployment effort during the second wave, Timken chose to set up a five-year application outsourcing arrangement with Accenture for maintenance and support of the SAP business applications through the Accenture Global Delivery Network.

With the completion of the final wave scheduled for 2010, the solution implementation affected 5,000 users and spanned 20 countries with distribution and manufacturing facilities, specifically 52 manufacturing plants and 13 distribution centers. Plans for the final wave are to implement the remaining European and Asia businesses bringing the total coverage to about 85 percent of Timken’s business worldwide.

Today, most of Timken’s US and European businesses are operating on one business platform with one set of processes and leading practices, driving improved operating efficiency and customer service.

Additionally, Timken has realized significant benefits across many areas of the business, 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 via new forecasting techniques that enabled a 10 percent improvement in demand and mix accuracy.

• Eliminated redundancies within the organization and among acquired entities.

• Reduced inventory levels through alignment with customer service objectives.

• Creation of business infrastructure for global supply chain model.

• Consistent business framework to deal with the demands of global customers.

• Consolidated purchasing activities and distribution channels.

By teaming with Accenture to deliver on Project ONE, Timken has built a stronger foundation for high performance that uses common processes and systems to leverage the company’s most distinctive capabilities and resources across the organization, unlocking value and benefit to customers.

At the outset of Project ONE, President and CEO Jim Griffith said, “When we’re a US$20 billion company, and we look back and say ‘what made this happen?’ The answer will be ‘we built the foundation.’ Project ONE is the ‘foundation’ ” that is paving the way for Timken to pursue its vision and return greater value to all of its stakeholders.