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Customer Snapshot

Thinking Differently: the Force Behind Greater Productivity

Millions

touch Kennametal technologies daily —
from using light switches
to driving cars

 

How can a company shift from product-focused to customer-centric without timely insight into accurate data about markets and performance? Kennametal Inc. – a leading global manufacturer – made the change by deploying SAP software for powerful analytics and standard processes based on best practices.

 

Company

Kennametal Inc.

Headquarters

Latrobe, Pennsylvania, USA

Customer Website

www.kennametal.com

 

Revenue

US$2.7 billion (2012)

Number of Employees

~13,000 (2012)

Implementation Partners

IBM Corporation, SAP Active Global Support organization

Line of Business

Service, Information Technology

Industry

Industrial Machinery & Components

Featured Products

SAP BusinessObjects Business Intelligence Platform, SAP Enterprise Resource Planning

History

Cutting-edge productivity

       

  • 1938 McKenna Metals Co. organized when Philip M. McKenna created a tungsten-titanium carbide alloy for cutting tools that provided a productivity breakthrough in the machining of steel.
  • 1940The company's tools were used extensively in the war-time economy of World War II.
  • 1943 Renamed Kennametal; innovated the toughness and wear resistance of tungsten carbide alloys.
  • 1946 Introduced the Kendex line of mechanically held, indexable insert systems that accelerated tool changing and increased machining precision.
  • 1956Kennametal Overseas Corporation formed.
  • 1967Kennametal completed their initial public offering.
  • 1981 Foreign sales grew from 17 to 34% from 1972-1981.
  • 1993 Acquired German toolmaker, Hertel AG, enabling the corporation to compete more effectively in Western Europe, gain better access to emerging markets in Eastern Europe, and offer additional product lines in Asia Pacific.
  • 1997Acquired Greenfield Industries.
  • 2002Acquired Widia, a leading manufacturer and marketer of metalworking tools in Europe and India.

Business Model

Peak performance for demanding environments

Using advanced materials sciences, Kennametal provides innovative, wear-resistant solutions to customers in aerospace and defense, energy, transportation, earthworks, and general engineering industries. Kennametal’s well-respected brands and global presence help customers of all sizes in virtually every geography.

Success Strategy

Focus on the customer

To grow their business, Kennametal implemented a new operating structure focusing on customers and responding quickly to customer needs – at the mine face or on the construction site. Kennametal also enhances technologies to engineer customers’ competitive edge, and expands reach through strong distribution partnerships.

 

“We realigned our company to enable an enhanced market-sector approach coupled with a more customer-centric focus. This change is meant to improve all key market-facing functions.”

The Challenge

Needed: Timely access to information

What Kennametal needed was a deeper understanding of their customer base. But significant data was spread across SAP and non-SAP systems, and employees had no easy access to accurate, detail-level data. IT needed to get involved in all report creation, and some employees had to wait up to 36 hours for the information they requested.

Enter SAP

Becoming seamless

Having their business with SAP software for nearly 20 years and with 99% of their revenues flowing through SAP applications, Kennametal decided to standardize their business processes, based on best practices supported by SAP software – while deploying SAP BusinessObjects solutions for powerful business analytics.

 

“SAP BusinessObjects software was the best choice because it addressed all our issues and would seamlessly integrate into our existing environment.”

The SAP Experience

More data, faster

Kennametal upgraded their SAP ERP application and implemented of SAP BusinessObjects software. 6,100 users were trained on SAP Best Practices for IM&C, and the solution went live on a budget and schedule that were a fraction of what the consultants had estimated. Data at Kennametal is increasing at 250 gigabytes per month, or 3 terabytes per year.

 

“It took us 14 months to accomplish what most companies would take three to six years to do.”

Running Better

Making better decisions

With SAP BusinessObjects Explorer software on the Apple iPad, employees can quickly access needed near-real-time information and explore it in a personalized view – without the support of IT. Managers can access customer orders and pricing via their mobile devices or e-mail, resulting in more well-informed decisions.

Benefits

Measurable results

Standardized processes make it easier for Kennametal to integrate acquired companies into their operations. And by streamlining, Kennametal now has unprecedented visibility into data, process effectiveness, and issues that need to be resolved.

 

10x

data load improvement times

 

 

90x

report creation
reduction

 

 

$300-$400K

annual savings after retirement of legacy software

92%

business processes based on SAP Best Practices for IM&C

18%

reduction in legacy applications

 

30%

project cost compared to consultants' proposals

Lessons Learned

More information, more innovation

Better access to information means Kennametal employees are gaining an even better understanding of their customers. By enabling employees to be more proactive, the customer’s experience has been enhanced; Kennametal can now innovate to meet ever-increasing customer demands faster than ever.

 

Speed of execution is the competitive edge that ultimately separates the breakaway companies from the also-rans. Kennametal is going fast!”

Today


“SAP software helps us achieve our goal of ensuring higher customer satisfaction while realizing lower costs to serve them. Going forward, we anticipate SAP software will help us further improve our company performance and the customer experience.”

Journey Ahead

Better service, lower cost

Ever customer-centric, Kennametal is adding substantial new functionality by expanding their SAP footprint – innovations now possible only because Kennametal has a solid, highly standard infrastructure in place to support them. Other future initiatives are in the areas of cloud computing, mobility, virtualization, and in-memory computing.

 

“We have an upgradable solution that allows us to serve the market better at a lower cost. It will carry us into a very bright future indefinitely.”

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