Exploring the Synergy of Inventory Management and ERP: A Case Study Analysis

A recent publication by Waters Corp. highlights their journey in adopting a new inventory-reduction strategy, featuring insights from Allan Jaenicke, the vice president of strategy and operational excellence, alongside Carrie Brown, a transformation advocate at Celonis.

Waters Corp. specializes in creating analytical instruments that ensure the safety of various products like food and pharmaceuticals. Historically, Jaenicke notes that the company struggled with excessive inventory levels and lacked clear visibility into their stock management.

To tackle these challenges, Waters teamed up with Celonis to develop an analytical tool integrated with its enterprise resource planning (ERP) system.This collaboration aimed to enhance inventory clarity and establish reduction targets across its manufacturing plants and distribution centers.

Jaenicke appreciates Celonis for its robust analytics capabilities and data visualization features. The platform allows users to manage safety stock effectively while seamlessly updating information within the ERP system—eliminating tedious manual data entry.

The rollout of this new application was no small feat; according to Jaenicke,it involved navigating through 36,000 SKUs while ensuring accurate data validation.Previously lacking a material-classification feature in their ERP made it challenging for Waters to differentiate between finished goods and those still in production.

On the other hand, Brown describes the implementation process as “swift and straightforward,” without any important hurdles related to integrating with Waters’s existing ERP framework. Thanks to this efficient approach, Jaenicke confirms they successfully launched the new system within four months.

This initiative has provided Waters with valuable insights into how their facilities handle inventory management and safety stock levels while revealing significant process variability. Consequently, they achieved an impressive $50 million reduction in inventory over just one year.

Looking ahead, Waters plans to transition to SAP S/4HANA—the latest iteration of SAP’s ERP solution—as part of broader efforts to modernize various operational facets including financial processes.