Planning with APO lets us centrally manage our logistics network for spare parts. Thanks to the high level of automation in planning, we can employ optimized procurement strategies. We have significantly reduced our inventory levels for spare parts but are still able to maintain high availability.
Markus Rolfes, IT Organization and Project Management, Krone Group
Krone is a leading global manufacturer in the Commercial Trailers and the Agricultural Machinery divisions. The Bernard Krone Holding GmbH & Co. KG offers its customers first-class service, even for spare parts.
Bernard Krone’s more than 3,097 employees generate sales of about EUR 1,6 billion.
Challenges and Benefits
- Fast, global availability of spare and wear parts
- High storage costs and tied-up capital
- Large number of spare and wear parts: over 40,000 different materials
- Automatically generate sales forecasts even for sporadic needs
- Calculate seasonal safety stock
- Optimize procurement lot sizes
- Reduce storage costs and tied-up capital
- Bundle replenishment deliveries for container shipping
- SAP APO (Advanced Planning and Optimization)
About the Project
As part of the SAP SCM solution, SAP APO has a broad spectrum of functions for planning and executing logistics processes. In close cooperation between itelligence consultants and the Krone Group, a solution was implemented that combines individual forecasting models for planning spare part demand with processes for determining safety stock levels and for optimizing lot sizes.
The system automatically forecasts future demand for spare parts based on a customer‘s order history. APO Demand Planning uses this data to determine and then recommend to the end-user various MRP (Material Requirements Planning) parameters such as lot-sizing procedures and safety stock levels. Additionally, safety stock is built up during the harvest season and then reduced in the off-season.
Since 2008, the agricultural machinery manufacturer has used APO Demand Planning and APO Supply Network Planning in all of its spare part factories in Germany, England and the U.S. The spare part and logistics center in Spelle serves as the hub. By consistently using SAP APO, the company has been able to reduce warehouse inventory significantly while improving the availability of spare parts.