STIHL, a leader in power tools and outdoor equipment, has implemented the SAP IBP solution (SAP Integrated Business Planning for Supply Chain) to unify and optimize its global supply chain operations.
Headquartered in southern Germany and founded in 1926, STIHL has evolved from a small enterprise into a global company, providing tools for forestry, agriculture, and landscaping, along with digital services. Despite its scale and market leadership, STIHL faced challenges in maintaining a streamlined supply chain as it expanded into new markets and product lines, particularly battery-powered tools for direct-to-consumer sales.
Previously, STIHL relied on separate supply chain planning systems across its 35 sales and eight production companies, each using tailored versions of SAP ERP Central Component (SAP ECC). This fragmented setup resulted in inefficiencies, such as time-consuming data validation and a lack of unified visibility across operations. According to Lena Domhan, who oversees integrated planning at STIHL, the absence of a consolidated planning system made it difficult to achieve accurate decision-making and transparency across subsidiaries.
The introduction of the ONE STIHL program marked a pivotal change. This initiative aimed to unify supply chain operations by implementing a hybrid ecosystem centered on the SAP IBP solution. Domhan emphasized that this shift was critical for improving coordination and establishing a single source of truth, which was previously missing.
Axel Erhard, leading the global ONE STIHL program, highlighted the strategic importance of SAP IBP in navigating a fast-changing market environment. As STIHL ventured into battery-powered tools and expanded its sales channels, the need for a flexible and responsive planning system became evident. Erhard indicated that SAP IBP, integrated with SAP S/4HANA for manufacturing and scheduling and SAP Transportation Management, provided the tools needed to align production and distribution efficiently.
Modernizing Planning and Creating a Unified System with SAP IBP Solution
The integration of SAP IBP brought about a synchronized planning approach, bridging gaps between production, distribution, and logistics. Fabio Fender, interim leader for integrated planning, explained that real-time data sharing between these systems allowed planners to assess the impact of decisions instantaneously. For example, adjustments in production schedules could be reflected in distribution plans, ensuring a seamless response to changing demands.
Georg Fuchs, a key architect of the ONE STIHL project, described how this unified ecosystem facilitated order-based planning. At production sites in Austria, goods are manufactured and allocated for delivery to distribution centers in Germany and the Czech Republic. This process, supported by SAP IBP, allowed STIHL to decouple production planning from distribution, enhancing flexibility and prioritization.
The integration of SAP Transportation Management further streamlined logistics by automating freight order creation and ensuring efficient product delivery. Fuchs noted that this level of end-to-end visibility and control was instrumental in reducing inefficiencies and building a more resilient supply chain.
Tangible Benefits and Future Goals for STIHL
With SAP IBP now operational at production sites in Austria and Switzerland, STIHL has begun to realize immediate benefits. Planners can create accurate and feasible schedules while adapting to real-time constraints, improving both efficiency and responsiveness. Sales and production teams now work with a unified data source, eliminating inconsistencies and fostering collaboration.
Domhan underscored how the integration has reduced manual tasks and allowed planners to focus on higher-value activities. Meanwhile, Fender highlighted the time savings achieved through real-time visibility, enabling faster and more informed decision-making. These improvements have translated into enhanced customer service and reduced inventory costs.
Looking ahead, Erhard emphasized the broader rollout of SAP IBP to 43 global subsidiaries as part of the ONE STIHL program. This expansion aims to create a fully integrated network, further enhancing planning capabilities across regions. Additionally, STIHL is exploring artificial intelligence (AI) to refine its supply chain processes. Erhard noted that while the company is in the early stages of AI adoption, its potential to optimize forecasting and resource allocation is promising.
STIHL’s adoption of SAP Integrated Business Planning for Supply Chain demonstrates the transformative power of unified supply chain solutions. By addressing operational inefficiencies and embracing innovation, the company is positioned to meet evolving market demands while maintaining its reputation for quality and reliability.
