Intelligent supply chain management makes supply chains more sustainable and easier to plan
Deloitte was proud to work with thyssenkrupp’s to take the company’s AI-based supply chain solution, pacemaker®, to the next level. We worked in close collaboration to develop an algorithm for the dynamic management of material flows that also helped cut costs and conserve resources – increasing stability, sustainability, and transparency at every level of the supply chain.
Tight supply chain integration is the lifeblood of our economy. When unforeseen events bring supply chains to a standstill, the economic implications can be severe, as was witnessed during the pandemic. At the same time, global shipments of goods and commodities are generating a massive amount of greenhouse gas emissions, and it is precisely those emissions that we are trying to reduce in the fight against climate change.
What can the industry do to ensure that materials continue to flow and supply chains continue to operate smoothly in the future, even in the face of crisis? How can companies keep their increasingly complex supply chains stable over the long term, while also meeting their sustainability targets? Our answer: with precise planning and a faster response when disruption occurs – ideally before it even happens.
To respond to this wide range of challenges, thyssenkrupp Materials Processing Europe, a leading multi-metal supplier for several automotive OEMs and suppliers across Europe, came up with an innovative solution: pacemaker®. They brought Deloitte and its team of experts on board to take this proprietary solution to the next level, using artificial intelligence technology to not only make the supply chain more stable, but also minimize its environmental footprint.
"The secret of pacemaker's® success is to combine thyssenkrupp's industry expertise and data access with Deloitte's methodological expertise and business-building experience."
Hans Steinweller, Director, Deloitte
This AI-based software can capture production data in real time, use its algorithm to flag unexpected disruptions in typical patterns and create useful visualizations of all relevant data. pacemaker® is already helping thyssenkrupp Materials Processing Europe forecast expected customer demand well in advance, while future iterations will also include demand forecasts for other suppliers in the supply chain. Automotive OEMs provide their forecasts for processing by pacemaker®, and historical and current production data is fed into the algorithm to make dynamic, precise projections of future demand. Based on these findings, thyssenkrupp can make real-time adjustments to material flows. Production planning is faster and more accurate as a result and the supply chain is more efficient – with overproduction and excess shipments all but eliminated to achieve a positive sustainability impact across the process chain.
pacemaker® is based on the idea that combining market intelligence with artificial intelligence can transform the automotive industry supply chain. With the extensive network, IoT functionality and data landscape of thyssenkrupp Materials Processing Europe, it is possible to capture the entire value chain – from blast furnace metal to fully assembled vehicles. This treasure trove of data is totally unique – it is also critical for training the pacemaker® algorithm to make ever more accurate forecasts.
And what about conserving resources and making more efficient use of materials? pacemaker® enables thyssenkrupp to reduce incorrect deliveries and minimize inventory and warehousing costs as well as the overall number of shipments. The algorithm can be deployed at any level of the supply chain, as well as between multiple levels. And thanks to its software-as-a-service convenience, it does not require any modifications to the IT systems on the customer side.
“The key components of the ideal supply chain are intelligent material management and an optimized use of resources. pacemaker® lays the groundwork for a system that does just that, while also allowing us to reduce our CO2 footprint and take a more mindful approach to protecting the planet.”
Christian Jabs, Project Head pacemaker® & Head of Group Sales, thyssenkrupp Materials Processing Europe
This innovative AI-based solution serves as an important building block in the development of thyssenkrupp’s “Materials as a Service” strategy and in the expansion of its supply chain service business. There are already plans in the pipeline for a systematic expansion of pacemaker®. Over the medium to long term, thyssenkrupp Materials Processing Europe intends to manage even more links in customer value chains, freeing them to focus on their core business. Suppliers will be able to rely on pacemaker® to plan production more accurately, to avoid overproduction, to generate cost savings and to better serve their automotive OEM clients.
“The secret to the success of pacemaker® is combining thyssenkrupp’s industry expertise and data access with Deloitte’s methodological competence and business-building expertise.”
Hans Steinweller, Director, Deloitte Consulting, Strategy, Analytics & M&A
The evolution of pacemaker® is a real milestone in the intelligent supply chain management space. By merging thyssenkrupp’s extensive supply chain and industry expertise with the capabilities of Deloitte’s global network of artificial intelligence and business-building experts, we were able to produce a successful proof of concept and further expand our client’s pioneering business model. The result: more transparent, more stable and more sustainable supply chains that enable a drastic reduction in CO2 emissions and significant cost savings of up to 15 percent.
Real connections. Real impact.
