Freudenberg Sealing Technologies

Freudenberg Sealing Technologies is a longstanding technology expert and global market leader for sophisticated and novel applications in seal technology and electromobility. With its unique materials and technology competence, the company is a proven supplier of advanced products and applications as well as development and service partners for customers in the automobile and general industries. In the 2021 financial year, Freudenberg Sealing Technologies generated a turnover of around 2.2 billion euros and employed around 13,500 staff members. Further information can be found at www.fst.com.

Freudenberg Sealing Technologies focuses on the most innovative technologies not only in production, but in all business divisions. The company has already optimized its order-to-cash and purchase-to-pay processes in purchasing using Celonis’ Process Mining technology. The follow-up project with the implementation partner Processand is breaking new ground by marking a world first in realizing added value from the new multi-event log and signal link technologies for the supply chain.

A functioning supply chain is crucial for the corporate success of manufacturing companies like Freudenberg Sealing Technologies. The entire process from ordering raw materials and production right through to delivering the end products to customers, must be managed efficiently. In particular, the planning, execution and monitoring of all activities connected with the material flow presents the company/enterprise with exceptional challenges against the background of the current stacking crises.

At the same time, the supply chains of companies like Freudenberg Sealing Technologies are characterized by high levels of complexity. Those responsible for the supply chain connect all of the dots: They are linked to external stakeholders such as suppliers and customers, but are also in close contact internally with sales and marketing. This is in fact a good prerequisite for establishing a cockpit within the supply chain management, in which changes in market conditions and their impact on all stages of the overall process chain can be observed in real time.

Historically, evolved or structurally conditioned silos prevent the necessary transparency in many companies. In order to understand the impact of unforeseen changes along the supply chain, those responsible first need to ascertain, combine and evaluate information at various points on this process chain.

"To get a complete picture of the situation, you have to put information together like pieces of a puzzle. This has proven to be extremely painstaking using solutions customary in the sector,” explains Simon Bach, Data Science Team Lead at Processand. "We want to accelerate this process in the long-term by ensuring greater transparency along the supply chain.” A number of current examples illustrate the necessity of this: If key raw materials for manufacturing cannot be delivered, production is delayed or, in the worst case, comes to a complete standstill. At the very latest when customers can no longer be supplied, this may result in enormous financial damage to Freudenberg Sealing Technologies.

"Although we know when there are problems with the material flow and can react selectively, we still lack the informational basis on the initial situation that is needed to act with foresight” according to Kai Führer, Director Global Supply Chain Controlling at Freudenberg Sealing Technologies. "In many cases, it took us days or weeks to form an overview.” These time delays facilitate wrong decisions, which have other serious consequences on the following process steps. Especially during uncertain times, such as we are experiencing now, companies are no longer able or willing to take these risks.

These technologies make the invisible visible

It was therefore important to provide transparency in the process chains between individual raw materials and end products, as well as the networking of various factory locations and contact partners. The project began in mid-2021. A few months later, a proof of concept was already carried out by Celonis so as to review the project’s technological feasibility. On the Freudenberg side, it was mainly Kai Führer and his team from Corp. SCM Measurement that worked closely with the Celonis team.

Here, the initial focal point was the issue of transparency in the material flow. The new Celonis Execution Graph created the basis for implementation. There are two technologies underlying this:

• The multi-event log makes it possible to identify points of friction within a process, which, in turn, are caused by another process. This is done by depicting interconnected processes and by performing cross-process drilldowns.
• Signal link, on the other hand, allows the representation and analysis of flow variables, thus creating transparency about indirect dependencies in production and sales. This specifically relates to dependencies on the raw product via intermediary materials to the end product, and associated processes in purchasing, sales and production.

During the proof of concept, it quickly became clear: Further developing existing technology was imperative in order to optimally adapt the software solution to the needs of Freudenberg Sealing Technologies. The company brought the implementation partner Processand on board, which facilitated a customized approach.

Ultimately, a completely novel tool developed for the manufacturing industry that enabled users to map the complex processes, interrelationships, and dependencies along the supply chain. Kai Führer is highly impressed by the results of the first test runs, and is already thinking about additional features: "In future, we can also imagine implementing process automation– such as alerts that inform users when material is running low at a location.”

But before the tool is supplemented with additional functions, Freudenberg Sealing Technologies is first rolling it out across the country. The team at Processand have worked hard on this for weeks and months. "Although we had the basic technology from Celonis, in the end we completely redeveloped the tool together with Freudenberg Sealing Technologies, which was technically very challenging,” according to Isabella Strong, Business Process Consultant at Processand.

Extensive programming had to be carried out in Python in order to take all of the company’s needs into account. Johann Blake, Data Scientist at Processand, played a decisive role in the implementation, and was eventually able to resolve the complex challenges. Freudenberg placed the emphasis on application-oriented issues. "For us, it was crucial to ultimately get a user-friendly tool that doesn’t require you to be a data scientist to understand,” explains Kai Führer.

Following completion of the validation phase, application training is expected to begin in July 2022. "The plan is to use a champion structure. That means there will be several employees in each corporate unit, a “champion”, and two regional key users, who also will gain access to the tool. They are usually colleagues who already work with SAP and are well acquainted with BI and key figures,” says Kai Führer. The tool offers maximum benefit to this target group.

The graphic depiction of the entire supply chain lies at the heart of this flagship project. This also includes the interdependencies between raw materials and materials as well as their share in the respective end products, i.e. the material and production intake. Material intake describes the assumption that the amount of material required precisely corresponds to the production output. However, due to wear and start-up losses in production, more raw materials are actually needed in order to achieve production targets (production intake). Thanks to the Execution Graph, this highly complex networking process across the various processing steps is mapped in its entirety within one single tool for the first time.

The newly gained transparency enables Freudenberg Sealing Technologies to accurately estimate volumes across the entire production process chains. "It now becomes clear to what extent production intake and material intake differ. No production process is perfect, but now we can better capture where losses occur,” explains Kai Führer. What is more, price fluctuations can also be presented – and, depending on the precise composition of the end product, it accordingly becomes clear how these must be passed onto the customer.

Another added value of the tool is the opportunity to assess consequences of bottlenecks immediately and in real time. The cockpit structure allows users to see which production steps and customers are affected, as well as which quantities are still available in the different factories. Based on the average sales data, the tool also displays how great the “scope” of the remaining raw materials is. Internal communication also becomes much easier, since all departments involved along the process chain now have access to the same information at any time. That means Freudenberg Sealing Technologies can flexibly make strategic decisions within a few hours that previously required several days of preparation.

For Freudenberg Sealing Technologies, the project represents an important milestone on the way towards a digital future – and a success factor in terms of competitiveness. Questions on the supply chain are always part of the negotiation processes with (new) customers, and a tool that helps guarantee order fulfillment and provides detailed information on activities along the process chain, is a clear advantage in the fiercely contested supplier market.

This project is still unique in its form and is used exclusively by customers. In future, other companies should also benefit from the technological possibilities. "We’re already in contact with other companies”, reports Simon Bach from Processand. "Inventory analysis and material shortage analysis are important for the manufacturing industry. That’s why we’re planning on standardizing the tool to a greater extent, while still offering many options for customizations. After all, not all customers are the same, but many processes are similar.” Furthermore, there are software interfaces that facilitate integration into diverse IT landscapes. "The technology is still in its infancy and we’re excited about what further success we can realize for our customers with this,” according to Simon Bach.

The success of the process chain visualization is not only credited to Celonis’ technology and data scientists such as Johann Blake from Processand, however. Above all, close cooperation between the companies has been a decisive factor for success. This has also been confirmed by Kai Führer: "We were already aware of the opportunities afforded by Celonis from two highly successful purchasing projects, also managed by Corp. SCM Measurement. We were able to build on this. With our implementation partner Processand, we’ve found the right experts whose experience enabled them to implement our wishes quickly and competently.” 

Simon Bach also drew a positive conclusion from the cooperation: "The high levels of trust by Freudenberg Sealing Technologies has allowed us to develop a completely new tool that provides a detailed depiction of the entire supply chain for the first time anywhere in the world. We look forward to the process optimizations that will develop from this for Freudenberg in future!” There are likely to be quite a few.

The flagship project impressively demonstrates the added value that can be achieved through technological advances for companies with high levels of complexity. By deploying innovative solutions, companies will become industry pioneers – and will find ways out of acute crises and challenging situation.

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