To provide the best in on-demand manufacturing, Logoplaste places its production units within its customers’ premises. How can the company grow and scale with geographically fragmented operations?
With SAP S/4HANA, SAP Leonardo, SAP Fiori and SAP Ariba solutions deployed by IBM Services, Logoplaste achieved shop-floor to top-floor integration and automation.
Optimizedcosts thanks to enterprise automation and integration
Enablesshop-floor to top-floor information integration and controls
Deliverscomplete process transparency, enabling information-based decision-making
Piecing together fragmented operations
Plastics packaging specialist Logoplaste works primarily with fast-moving consumer goods (FMCG) companies, manufacturing bottles to precise specifications. To deliver premium customer service, Logoplaste integrates its operations inside customers’ premises, providing what is known as "through-the-wall" services.
For Logoplaste, the on-site approach leads to a very dispersed business, with manufacturing units dotted across the globe. In a sector dominated by economies of scale, how could Logoplaste use its “through-the-wall” business approach to gain a competitive advantage, and how could such a dispersed organization scale cost-effectively?
Conceição Menezes, Chief Digital Officer at Logoplaste, explains, “We install our machines inside customers’ factories integrated with their filling lines. We operate sites from the USA to Vietnam, and the challenge is to manage this diversity as a single enterprise.”
To compete successfully in the plastics packaging sector, Logoplaste needs to reach the economies of scale achieved by its larger competitors. Conceição Menezes highlights, “In a fragmented organization people tend to start deciding for themselves on the best local systems, which then will not scale across the enterprise. We wanted to be able to share and consolidate skills, using the same systems for procurement, production, planning and much more.
“We chose to implement SAP ERP as our core business management solution, bringing all our data into a single platform. We started on home territory in Portugal, covering 20 industrial sites, and the SAP solution is today a single instance for all the Logoplaste Group around the globe.
“We understood three years ago that it was a great moment for the company to take advantage of an IoT approach, considering the maturity of the solutions available in the market and the need for the company to have such integrated view.”
Molding the right solution
Logoplaste looked to SAP and IBM to understand ways in how automated data integration could differentiate the company. The solution would also have to deliver efficiency, with accurate data contributing to the process excellence.
Conceição Menezes explains, “At the early stages we expressed little more than a vision of our strategy. We are under constant pressure to cut costs, improve performance and reduce manufacturing times. We knew that the existing solution would ultimately not be capable of enabling the transformation required.
“After speaking with IBM and SAP, we decided that the first step towards creating the digital foundation for our business transformation would be migrating from our original SAP ERP to SAP S/4HANA applications.”
To provide enhanced customer service, Logoplaste upgraded to SAP S/4HANA, which included the ability to provide real-time information to all supply-chain partners. The project was the first of its kind in the Iberian Peninsula, and also one of the first in Europe. The global project aims to connect the most relevant Logoplaste’s suppliers and clients, delivering information transparency across the entire process, combined with advanced planning.
This investment prepares Logoplaste for the future as manufacturing volumes grow. The solution will serve demanding customers more effectively, provide information for near real-time decisions and enable more frequent production changes. Data will flow in both directions, from shop to top-floor, with financial data only one click away.
Teaming with IBM, Logoplaste implemented this new, global business solution, in record time and with no downtime for the manufacturing plants.
“Because we have a strong confidence in IBM Services due the hard work we have done together over the last nine years, we knew they would be the right partner to accompany us on our journey,” continues Conceição Menezes. “We had immense confidence in IBM’s resources, technical capabilities, and knowledge of SAP solutions. We also knew that the IBM team understood our strategy and our business, and was very interested in and enthusiastic about the project.
“The IBM team helped us to explain the benefits of SAP S/4HANA to the Logoplaste senior leadership team, and showed to our customers how the new capabilities would drive new efficiencies and better service. We aimed to enable SAP S/4HANA as a silent process, with no major user impact, in readiness for the larger strategic digital integration plan.
“The one-year migration project concluded exactly as planned; support from IBM was outstanding, and in particular IBM placed many resources at our disposal to help seal the success of the initiative. Our vision paired with IBM’s in-depth technical and business skills proved to be a match made in heaven.”
While the core systems were being migrated to SAP S/4HANA, Logoplaste commissioned parallel projects to deploy the future-facing solutions that would enable digital and automated operations. These include the SAP Fiori user interface and SAP Manufacturing Integration and Intelligence (MII), a SAP Leonardo Internet of Things capability that connects the shop-floor to the top-floor. With the implementation of SAP S/4HANA, Logoplaste paved the way for digital innovation based on further SAP Leonardo solutions. Logoplaste will also take advantage of extended capabilities delivered by SAP Manufacturing Planning Scheduling, now embedded in SAP S/4HANA.
Logoplaste realized that as it expanded its enterprise, business cost controls were essential, which is why the company chose to deploy SAP Ariba Sourcing and SAP Ariba Catalog. With so many business units at different locations, Logoplaste was not taking advantage of economies of scale. By creating a single catalog for indirect purchases, the company could drive procurement savings and secure better deals from suppliers.
“Working with IBM, the first step was to define a target operating model – at that stage we did not have a centralized procurement team,” says Conceição Menezes. “Just as we were transforming and integrating our production model, we introduced a transformational project for procurement to enable Logoplaste to act as a single enterprise. In essence, we wanted to centralize procurement so that we could scale our operations, and SAP Ariba gives us that capability.”
The SAP Ariba cloud-based solutions offer rapid deployment and rollout. Together IBM and SAP provided configuration and enablement services, integrating Logoplaste’s SAP Ariba and SAP S/4HANA solutions. Logoplaste now has the ability to engage with best-in-class suppliers and take advantage of its global scale. By ensuring that purchasing is completed using the SAP Ariba Catalog (including punch-outs), Logoplaste is significantly improving its purchasing efficiency.
Sealing efficiency gains and forming better service
Thanks to the new SAP solutions deployed by IBM, Logoplaste has taken a massive leap closer to achieving its vision. As Conceição Menezes explains, “By using Internet of Things technologies, we want client orders to flow through automatically to our manufacturing systems, with integrated financial and production processes that do not require manual intervention at any stage.
“For example, clients want to know that our bottles satisfy their quality requirements, which involves providing production data on a batch basis. Instead, we envision a customer order that triggers manufacturing, which in turn reports in real-time on quality management, while raw materials inventory levels are replenished and the invoices are raised. This is the kind of zero-touch operation that is possible with integrated SAP solutions.”
Logoplaste selected one of its North American plants to complete a pilot implementation for SAP Leonardo, testing the concept and demonstrating the benefits. By integrating every aspect of the production chain, Logoplaste has automated monitoring and financial integration of raw materials consumption, production and scrap declaration. Similarly, digital control enables continuous monitoring of operations and optimized planning. For example, with automated production and scheduling, when a machine is out of service for maintenance, the system re-plans and re-schedules the manufacturing workload to ensure reliable delivery.
“SAP S/4HANA provides the enabling technology for our strategy,” says Conceição Menezes. “We can understand how our processes are running, improve quality and reduce the amount of wastage. In the future, we can for instance demonstrate that bottles have passed clients’ standards by showing them how we control the production process in real time, leading to faster delivery, better customer service and reduced costs.
“IBM Services is an essential partner for Logoplaste, delivering advanced SAP solutions that give us agility and flexibility. Finance, production and executive teams can harness new tools that will drive business operations into the future. Thanks to SAP and IBM, Logoplaste gains process transparency from shop-floor to top-floor that enable us to make better information-based decisions that we couldn’t make before.”
Logoplaste, headquartered in Portugal, manufactures rigid plastic packaging and bottles for some of the most reputable companies in the world, in the food and beverage, personal care, household, healthcare edible oil and lubricants sectors. With 61 sites across eight time zones in 16 countries, from the USA to Vietnam. Logoplaste employs 2,000 people worldwide.