AI in the supply chain network

staufen magazine 2023/2024 | No. 6 | Alexander Binzel Schweisstechnik GmbH & Co. KG | Supply Chain Network Management

Precise forecasts instead of gut feelings

In order to be able to plan and act in a proactive manner, ABICOR BINZEL adopted digitalization in its supply chain network early on – including artificial intelligence. As a result, the welding technology specialist created the necessary transparency to not only weather the past few years, but to remain on a clear path of growth, as COO Philip Röhrig reports. 

ABICOR BINZEL is a leading international manufacturer of cutting and welding torches. During the past few years, the company from Buseck, Germany, has grown continuously. “We now have 38 subsidiaries and are represented in more than 50 countries,” says Chief Operating Officer (COO) Philip Röhrig. The company’s global transactions place large demands on manufacturing, sales, and service. The individual subsidiaries had optimized their supply chain networks locally, but the management had recognized even before the outbreak of the current general multi-crisis that the inventory in the global network was not being optimally managed with regard to cost and transparency. Both the delivery speed and the margin were suffering as a result. We are familiar with the situation in which ABICOR BINZEL found itself at that time from many projects,” says Sebastian Perez, Senior Consultant at Staufen.Inova. “The problem is that although companies often operate internationally, they are not internationally networked,” says the Process Mining Data Engineer.

Inventories reduced by 20 percent  

The company decided to actively address this problem and digitalize the complete supply chain network. Data silos were broken up and the data operations were restructured through the use of optimization software. Now, all of the subsidiaries use the software, and processes are linked. As an example, worldwide uniform material numbers ensure transparency throughout the network. An overview of the entire inventory makes it possible to find goods locally and send them from one subsidiary to another, if necessary. “Today, we are better able to manage inventory worldwide,” says COO Röhrig. “Due to the measures we have taken, we have been able to reduce the capital commitment at the individual sites. Inventories have gone down by 20 percent without a reduction in service quality for ABICOR BINZEL. In addition, we have cut our air freight in half.“ 

Philip Röhrig

Chief Operating Officer

Alexander Binzel Schweisstechnik GmbH & Co. KG

“We were able to deliver at all times”  

The company’s success proves the management right. Philip Röhrig lists the additional advantages: “The transparency that was created allows us to continue to grow, to improve customer loyalty, and make faster deliveries.” What sounds so easy requires a lot of sensitivity on the part of the management. The changes had to be introduced to the individual subsidiaries carefully. “It wasn’t easy for the subsidiaries to give up part of their self-sufficiency. They first had to be convinced,” remembers the ABICOR BINZEL-COO. Ultimately, the multi-crisis triggered by the pandemic and the Ukraine war helped the management with its plan: “Here, the individual subsidiaries really saw the advantages of the newly created transparency clearly for the first time. Thanks to intelligent networking, we were able to weather this time well from the beginning and were able to deliver at all times.” 

Turnover and margin increased with the aid of artificial intelligence  

The company now uses artificial intelligence (AI) for sales planning. Instead of leaving supply chain network management up to the gut feeling of individual employees, data is now used that has been collected worldwide and analyzed for sales forecasts. “Earlier, we often only saw problems once they had occurred, and then it was sometimes already too late,” says supply chain expert Röhrig. “Today, our planning is much more oriented toward the future. Forecasts allow us to see problems early enough that we can still act and take measures.” And not only that: With the aid of AI, the company also recognizes where growth is possible. This has made it possible to gain new market shares and increase the turnover and margin. 

the company

ABICOR BINZEL is a leading provider of welding technology and welding accessories. Its products are manufactured and assembled at various manufacturing sites around the world, including in the USA, China, Brazil, and India. The main headquarters of the company is in Buseck, Germany. Around 450 employees work there in manufacturing, research, development, sales, and administration. 

1945

founded

35

subsidiaries

1.200

employees worldwide 

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