Supply Chain World - Fall 2017 - 66

manufacturing & energy agco

congestion. The TMS dynamically
optimizes the inbound flows on
a daily basis, based on what the
suppliers define as their shipments
to AGCO the following day.
The end-results have been noticeable, to say the least, especially
considering that the program integrated 1,550 European direct material suppliers delivering to more
than 20 worldwide manufacturing
and aftermarket sites worldwide.
Over an 18-month reporting period, the solution enabled AGCO to
reduce significantly the cost of the
inbound supply chain in Europe.
Furthermore, on-time carrier
delivery performance, supplier
process conformance, and carbon
footprint reductions, have been
enhanced with great success.
Anytime a company can cut
costs, increase performance
and reduce its carbon footprint
(thanks to better utilization of
capacity space on trucks), the
industry will take notice. In late
2016, AGCO's Smart Logistics initiative won the renowned German
Supply Chain Management award
by the German BVL organization,
and this past June, Smart Logistics
won the European Gold Medal
Supply chain and manufacturing processes are not only
changing, they are being re-invented. There are very new ways
of how to run your business and engage with your customers.
Therefore, we need to intelligently connect people, things and
businesses. SAP Leonardo is the digital innovation system
which allows you to do that. It enables you to innovate at scale
to confidently redefine your business. The Digital Supply
Chain is powered by SAP Leonardo. SAP Integrated Business
Planning (IBP) allows customers to segment, plan, optimize
and simulate demand, inventory and supply whilst adopting
digital supply chain transformation and 'supply chain control
tower' concepts. The SAP Ariba Network with over 2 million
connected suppliers enables SAP IBP to seamlessly integrate
partners in the supply chain for multi-tier planning and execution collaboration. Digital Logistics for advanced warehousing, transportation and track and trace allows responsive and
nimble multi-channel logistics in a single platform, enabling
collaboration across logistics networks.

66

Supply Chain World FALL 2017

from the European Logistics Association in Brussels.
Given the results in Europe,
Toornman and his team are looking forward to implementing the
initiative across all regions where
AGCO operates. Implementation
is expected to be completed in
China by Q3 2017, North America
by Q1 2018 and in South America
by the end of 2018.
All six regions will be on the
same platform by the end of 2018.
"It will truly be a state-of-theart platform," Toornman says.
"We will be able to monitor the
performance and product flows of
roughly 3,000 suppliers worldwide
on globally standardized and real
time basis."

Forward Looking
Despite their achievements so far,
Toornman and his team are not
resting on their laurels. In fact, at
the same time the AGCO Smart
Logistics Initiative was being
implemented, AGCO was also
working with another key partner,
SAP, using its Supply Network Collaboration (SNC) software. AGCO
is implementing SNC across its
global footprint in order to utilize
one globally standardized and
integrated supplier collaboration
process. AGCO is able to utilize
standardized formats for supplier
forecasting, supplier releases,
supplier order confirmations, supplier ASN's (Advanced Shipping
Notices) and supplier invoicing
transactions, as well as a number
of other key transactions across
the globe. By the end of 2018 all regions will have the SNC functionality in place. AGCO will converge
its TMS and SNC functionalities to

develop forward-looking streams
of data to optimize future transportation flows, costs, and carrier
capacity planning. The digitalization of AGCO's global supply
network continues to yield solid
levels of sustained improvements,
as well as simplifying the supplier
interaction driven by the global
process standardization.
"In the very near future, our
carriers will be able to log into our
TMS and look out as far as 10-12
months ahead and say, 'This is
what we will be moving,'" Toornman notes. "This allows them to
better position their equipment,
team members, delivery performance and further reduce cost."
This is a true win-win approach for
all parties involved.
By being able to look a year into
the future, carriers can drive down
their cost with better planning
while also enhancing their ability
to perform. "If a carrier has that
forward-looking profile of what
has to be moved from where to
where, then optimization can be
realized," Toornman explains.
"One supplier can ship to up to
54 AGCO locations worldwide;
knowing not only which parts and
quantities will be shipped, but
the dimension and weight of all
those parts in a standardized and
digitized format yields optimization in cost and performance. With
the wide range of AGCO product
offerings, the freight profile does
have a wide degree of variability
day to day that we now adapt our
inbound flows to support on a real
time basis."
AGCO is also working with SAP
on another ambitious platform
to develop a globally integrated



Table of Contents for the Digital Edition of Supply Chain World - Fall 2017

Contents
Supply Chain World - Fall 2017 - Cover1
Supply Chain World - Fall 2017 - Cover2
Supply Chain World - Fall 2017 - 1
Supply Chain World - Fall 2017 - Contents
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Supply Chain World - Fall 2017 - Cover3
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