Michelin

Michelin has been a Blue Yonder customer since 2003. However in 2014 Michelin decided to deploy Blue Yonder’s agile implementation approach, which includes a sequence of three-week sprints of designing, constructing, testing and validating the solution. This rapid prototyping methodology enabled the team to learn and mature quickly in their use of the solution while achieving results through each phase of the project, ensuring adoption by the business. A key enabler of this approach was the use of Blue Yonder cloud launch to support rapid deployment and performance testing.

In addition to the organizational and technology rollout, Michelin conducted a gap analysis of its S&OP processes and its position on the S&OP maturity curve. The teams identified process gaps and data consistency issues and built an action plan to close those gaps. The action plan was then translated into monthly objectives, along with monthly status reviews, to reinforce organization-wide accountability. The company also joined Blue Yonder’s S&OP Special Interest Group, which enabled them to learn from other customers’ experiences and best practices.

Michelin turned to Blue Yonder for support in the transformational S&OP project, encompassing process, organizational and technology changes, to improve its supply chain plan decisions and cross-functional alignment.

Blue Yonder’s sales and operations planning capabilities enabled Michelin to better share within the business unit executive team a common demand, sales and production plan, as well as manage priorities. It also allows the enterprise to balance demand against capacity across a 12-18-month horizon, a process often referred to as tactical balancing, or rough-cut capacity planning.

At the beginning of 2017, Michelin launched a reorganization study, modifying in depth its business structure. The collaboration capability in Blue Yonder S&OP played an integral part as it enabled multiple entities (such as manufacturing, regions and business lines) to work together to build common tactical sales, production and stock plans, and it was one of the main levers that allowed a quick transition from the old organization to the new.

Since January 2018, the main Michelin activities worldwide have been driven using Blue Yonder’s S&OP capabilities and a tool deployment roadmap. The solution supports a standardized process and network for sharing best practices, empowering the plants and sales organizations with a new tool for collaboration. It also enables local simulations to support demand management in the regions, as well as capacity management at the plants, all using one set of data to ensure consistency.

Moving to an end-to-end supply chain solution, globally 

Having used Blue Yonder and a number of legacy applications for many years, in 2019 Michelin decided to deploy one set of Blue Yonder solutions across the entire organization (across all business lines in all regions), supported by new standardized business processes. Deploying Blue Yonder technology as its backbone solution became mandatory for each business line to ensure uniform decision-making and faster monthly consolidations.

Since migrating from a regionally based supply chain supported by fragmented legacy systems to the new Blue Yonder-based global solution it has seen significant improvements. Focused solely on fulfilment, Michelin estimates it has saved about 2 days of inventory by improving daily planning. 

“Having used the Blue Yonder applications for many years, we have a huge understanding of their capabilities and all the many options for parameterization. So, we know that in the Blue Yonder solutions, there are a lot of options to help us fine-tune the processes to address each market segment.” 

Transportation Management Solution reduces CO2 emissions

Another example of success is around the Blue Yonder transport management system (TMS). Michelin has increased the correct loading of trucks by 2%, resulting in significant logistics cost savings and a reduction in CO2 emissions. 

A new segmented supply chain

Around 2024, Michelin recognized its current global supply chain was functioning well but was based on a ‘one size fits all’ design—with the same service offering everywhere for all customers, across all products. This was deemed inadequate to take the company forward in a world where customer demands are changing so quickly. 

“We decided that we needed to adapt. But instead of trying to take the full supply chain design forward, we decided to split this big problem into several smaller problems. We defined our market into product and customer clusters or segments. We defined for each segment of customers a level of service that we wanted to propose.”

Michelin designed the business model around these customer segments, defining the level of ‘cost-to-serve’ and profitability of the different product segments in each case, together with target KPIs for product availability.

Relationship built on trust

“The 25-year relationship between Michelin and Blue Yonder is very healthy, and we have a lot of fun, which is important. But what is key for me is that the relationship is based on trust.  When we trust each other, we can be demanding with each other. And this is what we do.  Although we can be very challenging as a customer, between us, we are constantly striving for new levels of success.”

“The next stage of our journey is a move to SaaS, and we will be doing lots of work with Blue Yonder to help us identify and define the business value of this important migration. This is the next key step in our relationship.”

“Our relationship is in a good place, and we have much work ahead of us. But the nice thing to remind ourselves is that in every delivery of Michelin tires that we do every day, we can see there is a touch from Blue Yonder at every stage of our customer delivery.”