Download PDF
Celonis > Case Studies > Hexion's Supply Chain Transformation with Celonis
Celonis Logo

Hexion's Supply Chain Transformation with Celonis

Technology Category
  • Networks & Connectivity - NFC
  • Sensors - Autonomous Driving Sensors
Applicable Industries
  • Life Sciences
  • Transportation
Applicable Functions
  • Logistics & Transportation
  • Procurement
Use Cases
  • Demand Planning & Forecasting
  • Supply Chain Visibility
Services
  • System Integration
The Challenge
Hexion, a specialty chemical manufacturer, was grappling with a large, complex supply chain that had come under extreme pressure due to the impact of COVID-19, global logistics issues, storms, material shortages, and reliability issues. The company's system and process landscape had grown significantly over the years, making it difficult to identify pain points in a data-driven manner and understand the ripple effect of undesirable process steps. Their supply chain teams often found themselves stuck in firefighting mode. For instance, while their Order Management team could see the frequency of order changes in their systems, they could not understand which customers were driving these changes or quantify the impact these changes had on adjacent processes like Production Planning or Procurement.
About The Customer
Hexion is a specialty chemical manufacturer that has been in operation for over 100 years. The company manufactures specialty chemicals and performance materials for more than 1,200 companies across 60 countries. Hexion's products can be found in a wide range of items, from cars and trucks to wind turbines, electronics, aircraft, and buildings. The Ohio-based company operates more than 30 manufacturing and research and development facilities around the world. Hexion's mission is to make the world 'better, safer, and cleaner' through the boundaries of chemistry.
The Solution
Hexion turned to Celonis for a solution. The company is now maximizing execution across five of their core processes with the Execution Management System (EMS): Order-to-Cash, Procure-to-Pay, Accounts Payable, Accounts Receivable, and Production Planning. Hexion started their EMS journey in Order-to-Cash, one of their most complex processes. With Celonis, they found 10,000 different variants in their Order-to-Cash process. To tackle this complexity, Hexion targeted the low-hanging fruit first. For example, they noticed that incorrect routes in their master data were driving a high number of route changes, causing significantly longer delivery times. By making simple changes in their master data, they were able to reduce route changes by 45%. Leveraging Celonis’ intelligent automation capabilities, Hexion’s teams also get notified about any blocks on orders that are at risk of a shipping delay. This has allowed the company to investigate these blocks proactively, reducing the time from credit hold release to shipment from approximately 11 to five days.
Operational Impact
  • With the help of Celonis, Hexion has been able to proactively tackle supply chain disruptions, free up millions in working capital, and give valuable time back to their teams. The company now has comprehensive, real-time transparency into their operations, allowing them to respond quickly to supply chain disruptions and get ahead of them. The ability to connect different processes and dissimilar IT systems has been particularly beneficial in Hexion’s Production Planning. The company can now follow an incoming order all the way through to Production Planning to precisely calculate the financial impact of last-minute order changes. This has led to smoother operations and reduced disruption. Looking ahead, Hexion plans to use Celonis for their biggest transformation project yet: measuring the cost of process changes through their entire value chain.
Quantitative Benefit
  • 45% reduction in route changes from production to customer
  • 50% reduction in days to pay for supplier financing, equating to several million dollars in working capital reduction
  • 50% decrease in unearned cash discounts paid out

Related Case Studies.

Contact us

Let's talk!

* Required
* Required
* Required
* Invalid email address
By submitting this form, you agree that IoT ONE may contact you with insights and marketing messaging.
No thanks, I don't want to receive any marketing emails from IoT ONE.
Submit

Thank you for your message!
We will contact you soon.