Public Voting

Category: Data to Decisions

Stefan Maurer

VP of Enterprise Effectiveness in EMEA at AVNET, Avnet

Supernova Award Category: 
Data to Decisions
The Organization: 

Avnet is a global leader of electronic components and services, guiding makers and manufacturers from design to delivery. It is one of the three largest distributors of electronic components in the world. The market for semiconductor products is growing significantly due to the omnipresent digitalization.

Avnet is 14,000+ people strong in 125 countries across North America, Europe and Asia - supporting customers in 140 countries. Its field application engineers (FAEs) are on the front lines of innovation, supported by sales, supply-chain, design-chain and service teams with deep expertise.

 

The Problem: 

Overnight, COVID-19 impacted several of Avnet’s suppliers on how and when their deliveries would arrive. This, in turn, affected Avnet’s deliveries and commitments to their own customers, many of which play pivotal roles in the healthcare system.

Now add inflation and the war in Europe to the mix. These crises and macroeconomic surprises mean that companies have to rethink and transform their global supply chain model. 

Like all global companies, forced to rethink and transform their global supply chain model, Avnet needed to adapt quickly to changing demands, become more connected to their network, and have end-to-end visibility across their supply chain. 

To do so, Avnet needed to have a transparent overview of every single one of its processes to be able to react in real time to constantly changing conditions. 

Avnet needed to be sure that it was focusing on the right process improvements and to improve the right process areas. 

The question Avnet was asking itself was, how could it address and overcome these challenges in a data-driven way?

The Solution: 

Avnet moved away from gut feeling and subject perception to process data-driven analysis -> from data to decisions! Avnet quickly implemented a Celonis dashboard to maintain visibility into the most critical parts of its supply chain. Then Avnet identified automation potential - to become more efficient and effective - by gaining visibility and transparency into data and processes, combined with real-time analytics. This allowed better quantifying, measuring and managing, which accelerated process improvement. With real-time data, Avnet makes same-day adjustments and prioritizes inventory deliveries eg for medical & healthcare customers who urgently need supplies esp. during the pandemic (such as components for ventilators and respirators) over non-essential consumer goods. The Celonis Execution Management System (EMS) enabled Avnet to get real-time objective insights into processes like P2P, order-to-cash, finance, as well as drives sustainable value.

The Results: 

Avnet knew that insights into their supplier’s delivery of inventory was key to meeting their customers’ demands. Yet when Avnet leveraged Process Mining in their Purchase-to-Pay (P2P) process, they discovered that nearly 10% of inbound orders from their 500 vendors were actually arriving earlier than requested. Having additional inventory on hand meant paying for it earlier than planned, which directly impacted their ability to optimize working capital. 

Avnet could immediately see which suppliers were routinely delivering goods too early, allowing them to set up corrective measures and negotiate with these suppliers - ultimately saving €6.55M in working capital. With these insights, Avnet leveraged the Celonis Action Engine to automatically inform the Accounts Payable department and adjust the payment terms in the system to match the originally communicated terms.

Avnet also established a Center of Excellence structure, which has been extended in EMEA with a dedicated Celonis developer and full integration with Avnet’s business analyst and enterprise effectiveness organization (a Celonis CoE accelerates the value of process mining and execution management across the business). This allows Avnet to respond quickly to changing requirements and work closely with individual business departments to fully leverage the capabilities of the software.

All this, of course, has immense implications on how to achieve continuous process improvement.

Metrics: 

Avnet could immediately see which suppliers were routinely delivering goods too early, allowing them to set up corrective measures and negotiate with these suppliers - ultimately saving them €6.55M in working capital. 

The company has transformed a wealth of its processes into high-performance, data-driven processes. Among them: 

Purchase-to-Pay (P2P)

Order-to-Cash (O2C)

Finance

Material Management

The collaboration is having a decisive influence on:

Working capital reduction

Cost reduction

Risk minimization

Productivity improvement

Revenue enhancement

-> Avnet generates about €15 million in added value annually worldwide by using Celonis

 

The Technology: 

Celonis provides a secure, fast, scalable cloud platform, integrating real-time data across transactional and analytical systems at scale with 100+ pre-built connectors. Process Intelligence uses process mining and ML to visualize what’s happening in processes to surface digital truth. Advanced algorithms, ML, and deep industry and process domain expertise, recommend what to fix and how. By prioritizing recommendations, the EMS triggers targeted actions to fix inefficiencies. 

Disruptive Factor: 

The collaboration between Avnet and Celonis has made Avnet’s supply chains more resilient, which is crucial especially in these times of disrupted supply chains, inflation, war and pandemic, marked by constant change and unpredictability. 

The efficacy of the collaboration between Avnet and Celonis proved immensely valuable in a short amount of time:

Process mining saved them €6.55M in working capital, as Avnet could then see which suppliers were routinely delivering goods too early, allowing them to set up corrective measures and negotiate with these suppliers

Overall €15 million value realized YoY, globally, driven by impact on working capital, cost reduction, risk mitigation, labor productivity and revenue increase. 

The engagement throughout the company has allowed different areas and employees to quantify and visualize whether they’re prioritizing and making the right decisions, and then manage and measure results accordingly. The growing adoption throughout Avnet lets the company overcome any challenges in a data- and process-driven way, at scale. And it will only continue to uplevel its performance with data-driven decision-making as the collaboration continues.

Shining Moment: 

Avnet realized that through data-driven decisions it can achieve real process excellence. In addition, Avnet’s supply chain became even more resilient even during these times of macroeconomic crises.

At the Celonis World Tour 2022 Stefan Maurer spoke onstage about the successes of the partnership thus far: deployment, engagement, adoption, value and improvements. 

At Celosphere 2021 Avnet also outlined how it drives sustainable value with the Celonis EMS.

About Avnet

Avnet supports customers at each stage of a product’s lifecycle, from idea to design and from prototype to production. Our unique position at the center of the technology value chain enables us to accelerate the design and supply stages of product development so customers can realize revenue faster.