Johnson Controls, Inc.

Cost savings generated by operations insights enable expansion and response to increased demand

Published on 27-Dec-2013

"LogicNet Plus XE software allows us to create clear pictures of our network, starting with a best-case state and then quantifying the impact of each constraint. This clarity can reveal hidden savings opportunities as well as give us complete insight into the main drivers of our supply chain." - Johnson Controls, Inc.

Customer:
Johnson Controls, Inc.

Industry:
Automotive, Industrial Products

Deployment country:
United States

Solution:
B2B, Big Data & Analytics, Big Data & Analytics: Operations/Fraud/Threats, Business Performance Transformation, Cloud Computing, Commerce Solutions, Industry Framework , SaaS, Smarter Commerce, Smarter Planet

Overview

Johnson Controls is a leading diversified technology and industrial company serving customers in more than 150 countries, with more than 142,000 employees. Based in Milwaukee, Wisconsin, the company manufactures lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles as well as interior systems for automobiles.

Business need:
The company needed to optimize its current operations and develop long-term business strategies.

Solution:
Johnson Controls uses analytics to know exactly when and where to act at every step in the cycle to create maximum efficiency and cost savings.

Benefits:
The IBM solution helped reduce supply chain costs, achieve a 790 percent annualized ROI and support expansion into new markets.

Case Study

Johnson Controls is a leading diversified technology and industrial company serving customers in more than 150 countries, with more than 142,000 employees. Based in Milwaukee, Wisconsin, the company manufactures lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles as well as interior systems for automobiles.

The Opportunity
Manufacturing and recycling automotive batteries at 35 plants worldwide and delivering them to 10,000 retail locations requires a coordinated effort. Johnson Controls’ supply chain solution moves product from point A to point B, but it lacked the ability to develop more sophisticated models that would show cost-saving efficiencies. Changing demands and advanced battery technologies required investments in new facilities. The company needed to optimize its current operations and develop long-term business strategies.

What Makes It Smarter
Almost 80 percent of an automotive battery is made from recycled material, creating a closed-loop cycle consisting of manufacturing, recovery, recycling and redistribution. Johnson Controls uses analytics to know exactly when and where to act at every step in the cycle to create maximum efficiency and cost savings. It uses raw data from operating, financial and transportation systems to make better sense of complex plans for production, schedule deliveries to retailers and pick up used batteries for processing. Supply chain managers can see the impact of even small changes on associated costs and can quickly adjust timing of events and supplier use to get the most benefit from every move.

The solution models how the frequency of scheduled pickups of used batteries affects the capacity of recycling plants. For example, instead of a monthly pickup from one location, the solution shows the efficiencies of smaller pickups at multiple sites. The company also uses the solution to help it determine long-term strategies about where to build new factories for batteries used in electric motor-assisted vehicles.

Real Business Results
• Reduced supply chain costs by USD20 million over two years by identifying hidden savings opportunities and optimizing production, recycling and transportation network configuration
• Achieved a 790 percent annualized ROI with the analytic solution
• Supported expansion into new markets by optimizing new processing facilities

For More Information
Please contact your IBM representative or IBM Business Partner. Visit us at ibm.com/ilog.

To learn more about Johnson Controls, Inc., visit
www.johnsoncontrols.com.

Products and services used

IBM products and services that were used in this case study.

Software:
IBM ILOG LogicNet Plus XE

Legal Information

© Copyright IBM Corporation 2013 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America December 2013 IBM, the IBM logo, ibm.com, ILOG and LogicNet Plus are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data discussed herein is presented as derived under specific operating conditions. Actual results may vary. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.