A case study about implementing a new inventory-reduction solution, with Allan Jaenicke, vice president of strategy and operational excellence with Waters Corp., and Carrie Brown, transformation evangelist with Celonis.

Waters Corp. develops analytical instruments for ensuring the safety of food, drugs, water and other products. Historically, Jaenicke says, the company had been operating with high inventory levels, as well as limited transparency into what it had on hand, and where.

Waters partnered with Celonis to build an analytical tool atop its enterprise resource planning (ERP) system to achieve better visibility into inventory, and set targets for reduction at its plants and distribution centers.

Jaenicke says Waters liked Celonis’s ability to conduct analytics and visualize data, as well as provide the user with the ability to manage safety stock, make recommendations, and push that information into the ERP system without the need for manual re-entry of the data.

Implementation of the new application was complex, Jaenicke says, given the company’s 36,000 SKUs and the challenge of validating data. Waters had previously lacked a material-classification component in its ERP, making it difficult to distinguish between finished and semi-finished goods.

For Celonis’s part, Brown says implementation was “quick and simple,” with no complications arising from the need to integrate with Waters’s ERP. Jaenicke says the company was able to meet its four-month timeline for getting the new system in place.

In the process, he says, Waters acquired a better sense of how its plants were managing inventory and safety stock, and “clarified how much variability was in the process.” As a result, the company was able to reduce inventory levels by $50 million over a year’s time.

Next up for Waters is a switch to SAP S/4HANA, the latest version of the vendor’s ERP offering.   Jaenicke says the company needs to modernize other aspects of its operation, especially on the financial side.