Sandvik Machining Solutions – Decoupled but Connected

Bild: home.sandvik/mediabankCustomer Case from Random Forest Data Day, September 2022.

Sandvik Machining Solutions (SMS) is a global market-leading manufacturer of tools and tooling systems for advanced industrial metal cutting. The company’s products and solutions account for approximately 20% of the global market. SMS is active in several market segments, such as the automotive and aerospace industry, and holds five different brands/divisions (Sandvik Coromant, Seco, Walter, Dormer Pramet, Wolfram) that operate independently from each other.

About 20 000 products are shipped from the company’s distribution centers around the world on a daily basis, and the number of customer contacts amount to roughly 100 000 per day.

” I have been working within Sandvik for over 20 years now and I don’t think I have seen a more successful project delivered within such a short time frame… This will be a game changer for us in SMS and we will leverage from this for decades to come.”

– Tim Knothe, Head of Business Data, Sandvik Machining Solutions

Challenges

SMS realized that it was in possession of massive unused potential in the form of data. The company’s large global presence meant that it had an abundance of data points that could be used to generate new knowledge about the business and the market. By having the ability to quickly analyze data from the automotive industry, for example, the company could get an early indicator of the state of the economy within that segment and gain important insights. Such speedy insights would also be valuable for the rest of Sandvik.

Previously, SMS had invested in shared systems for all divisions (ERP, CRM, E-Commerce etc.). They had been forced to rely on the group’s consolidation system and could only evaluate each division retrospectively once a month. But in today’s ever-changing world, a lot can happen in a month. They needed something better.

Another challenge was to create transparency between the five divisions within SMS. Since the divisions operate as competing brands vis-á-vis the customer, it was, culturally speaking, not that easy to share data and achieve visibility. This was an important parameter to consider.

Solution

Random Forest helped SMS realize an IT strategy of “Decoupled but Connected”, where some systems such as CRM and ERP are decoupled between the divisions, while others are shared and connected. SMS chose this solution because the mobility and ability of each division to develop its own business was deemed much more important than finding IT synergies. Data now act as glue between the company’s five divisions.

The first thing developed was a mutual data platform for reporting and analysis, and a use case was set up for daily order entry and invoicing, which is collected from all divisions within SMS. The solution is based on Microsoft Azure, where Random Forest has created a data lake for infinite data storage.

Benefits

  • Aided by the new data platform, SMS can produce its own Power BI reports and navigate its stakeholders to important data internally. This allow the rest of the organization to be taught the value of data and how to analyze it (to detect current trends in the Chinese automotive industry, for example).
  • The information on the platform is business sensitive and represents approximately 50% of Sandvik’s total turnover. Therefore, all data comes with the highest information classification with advanced encryption and access management.
  • SMS has achieved greater visibility and increased control over important data within the organization without intruding on divisional autonomy.
  • The solution is scalable and will be of great benefit to SMS in the future.

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