MANN+HUMMEL: Helping global subsidiaries speak the same language with a single, standardized, and scalable ERP system
A common ground through cloud ERP
Filtration expert MANN+HUMMEL believes that when it comes to cleaner mobility, air, water, and industry, there is no mine or yours—there is only ours. With the SAP Cloud ERP solution, the company is applying this philosophy to ERP, combining disparate systems in one solution for greater consistency, transparency, accuracy, and speed.
| Industry | Region | Company Size |
| Automotive | Ludwigsburg, Germany | 22,200 employees |
Program Manager SAP S/4HANA Cloud Business Transformation, MANN+HUMMEL
Uniting worldwide entities on one platform to support growth
MANN+HUMMEL, a leading global expert in filtration, has been “separating the useful from the harmful” since 1941. Today, dedicated employees at more than 80 sites worldwide help produce innovative solutions that contribute to cleaner mobility, air, water, and industry. These range from automotive filters in cars and wastewater-treatment systems in plants to highly efficient industrial filters for machines.
MANN+HUMMEL’s Life Sciences and Environment (LS&E) division has been growing steadily in recent years, largely driven by acquisitions. But this rapid growth left the organization with a patchwork of ERP systems and business practices.
Arjun Prasad, program manager for SAP S/4HANA Cloud business transformation at the company, explains, “Each acquired company has its own DNA and business processes. And while some organizations were applying best practices, these were not necessarily being applied elsewhere. Our mission was to unify these companies in one standardized, scalable ERP system.”
Diverse ERP systems had implications for the speed and accuracy of reporting across the global division. Prasad says, “In terms of group-level reporting, it was difficult to get the right numbers. We were using KPIs, but they were sometimes calculated in different ways. Adapting these manually was a tremendous amount of work.” To consolidate group data, the finance team needed to extract data to a spreadsheet, convert the chart of accounts to the company standard, and then upload that information into the SAP Business Warehouse application.
A lack of data consistency and transparency also affected day-to-day operations. Prasad elaborates, “For daily business users, we had challenges when it came to intercompany business. For instance, you might order a part, but it was called something else in the receiving entity. The effort involved in resolving these common scenarios was much too high.”
ERP systems were also highly customized, hindering innovation. Dean Lindsey, business solutions architect at LS&E Europe, says, “A guiding principle of this whole project was that legacy ERP systems had been highly customized over time, which reduced the ability to upgrade technology, add new features, and expand functionality. As some systems hadn’t been upgraded for 10 years, there was new functionality we couldn’t use because the cost of upgrading was too high.”
As the company discovered, the drive to address these issues with a unified ERP system was to evolve beyond a mere IT project to an organization-wide transformation.
Director, IT Business-System Integration, LS&E, MANN+HUMMEL
Embracing cloud ERP with the aid of expert support
MANN+HUMMEL soon realized that the public cloud was the way forward. Lindsey explains, “When we reviewed different ERP systems, there were two factors. One was the inability to customize the public cloud to a high level. The fact that SAP Cloud ERP was a standard solution was a key decider for us. In addition, we knew it would help us maintain a clean core.” On the customization point, Anand Kushwaha, LS&E’s director of IT business-system integration, LS&E, adds, “Homegrown ERPs are used to having whatever customization they want. A public cloud has most of the functionalities we need, but it also allows us to push back on individual requests so that we can standardize.”
SAP’s focus on ERP solutions was another deciding factor. Kushwaha explains, “We had to build and run new ERP systems ourselves where these were no longer supported. So we wanted a provider whose core business is ERP. SAP has decades of experience and is building a future in ERP, meaning it’s here to stay and will be with us for the long haul.”
The initial plan was to roll out first in China. However, the onset of the COVID-19 pandemic and related travel restrictions meant the first implementation occurred in LS&E’s water business unit in Wiesbaden, Germany.
The team quickly saw robust change management was key. Prasad says, “We soon understood that installing the software and running processes was the easiest part, while change management was more challenging. We concentrated on bringing everyone together as one team and looking beyond, say, improvements in business efficiency to the impact on the production floor. We asked teams to explain how their existing processes worked, involved key users to transfer knowledge to end users, and used the SAP Activate methodology to smooth the transition.”
SAP Preferred Success services also played a critical role, providing assistance such as project safeguarding, ticket support, and go-live support. Prasad says the services have had a huge influence on the transformation’s success: “We have somebody we can talk to every week and openly discuss issues with. We’re also collaborating with SAP through SAP Advisory Council for user experience and product development, where we can bring up new topics, challenges, and features, providing further support and helping get our users on board.”
Success checks in areas such as identity and access management, test automation, embedded analytics, and the SAP Cloud ALM solution add further value. In Prasad’s words, “The success checks help because an SAP expert looks at our process and can suggest a different approach based on new functionality, applications, or tools available in the solution. These conversations definitely help improve our process efficiency.”
Business Solutions Architect, LS&E Europe, MANN+HUMMEL
Adopting a new mindset based on end-to-end processes
Following the rollout in Wiesbaden, MANN+HUMMEL has already introduced SAP Cloud ERP across units in Singapore, Sprockhövel in Germany, Italy, Hungary, the United Kingdom, and Canada. Prasad describes the transformational effect so far: “We’re completely reorganizing our project organization based on business processes. Earlier, you might have had a line of business such as manufacturing, sales, procurement, or supply chain. Now, we’re transforming these into end-to-end processes. So, a sales order, for example, might involve sales or finance, but one person owns the entire order-to-cash process. If we want to change something, we run it by them and highlight any issues early on.”
Similarly, the new solution supports smooth source-to-pay, plan-to-fulfill, and record-to-report processes across the LS&E division. Business process efficiency, whether on the shop floor or across material handling, has increased. On a day-to-day basis, sales teams can upload unstructured data from spreadsheets more efficiently. Transparency and accuracy of information on the factory floor have greatly improved. And best practices flow more easily from company to company.
Data coming from SAP Cloud ERP is standardized, accurate, and current, which has huge advantages for transparency and reporting. Prasad notes, “Our group-level or even plant-level reporting has improved tremendously, aided by better-quality data and increased speed. This helps everyone, whether it’s facilitating a daily meeting on the shop floor or a board-level meeting.”
Lindsey adds, “Now that everyone uses the same chart of accounts on SAP Cloud ERP, there’s no need for remapping. Plus, we’re processing data automatically every day, rather than on a monthly or even longer basis, and at a granular level. So instead of having to spend three to four days extracting, manipulating, and uploading data, the finance team can provide that information on a daily basis. Standardization makes reporting significantly easier at a divisional level too, as we no longer have different systems with different ways of naming countries, products, accounts, or customers.” This transformation is most apparent in LS&E’s water business unit, most of which now runs on SAP Cloud ERP and enjoys enhanced visibility across orders, products, and profitability.
According to Kushwaha, automation also helps MANN+HUMMEL react more quickly. “As well as eliminating the risk of human error, we can now respond in a more timely way. Instead of uncovering errors at the end of the month, we can identify slippages on the third or fourth day, preventing significant business impact. Earlier, we lacked that visibility.”
Standardized data is reaping benefits in procurement too, as Kushwaha explains: “We realized we had multiple contracts with the same organization in different subsidiaries. By consolidating these, we not only reduced our workload but also increased our volumes per contract, helping us negotiate better deals. And it reduced effort for our suppliers, creating a win-win situation.”
And the public cloud model means LS&E no longer has to grapple with out-of-date and unsupported ERP systems. Lindsey says, “As well as a clean core and speed of implementation, we have the benefit of regular software upgrades. This means that the solution we started out with is significantly different than what we have now, and we can constantly take advantage of new features and innovation.”
Innovating using harmonized, high-quality data
Rollouts of SAP Cloud ERP continue across MANN+HUMMEL’s LS&E division, with Sweden and the United States (the biggest unit) underway and soon to be followed by Switzerland, Denmark, China, Austria, and the Netherlands. The current transformation is expected to span 21 locations across 13 countries. Meanwhile, LS&E continues to acquire new businesses that can now be smoothly integrated with the ERP system.
One ongoing project involves moving procurement from local entities to the company’s shared-services division, a transition made possible by increased levels of standardization across the function.
Kushwaha says that once most of the LS&E division, including larger locations, is using the solution, the company will see further benefits. “When we reach a particular volume, the cost impact of a subscription model in the cloud will kick in. In addition, we will have accurate, reliable data to inform new service models and designs. With a global view of operations, we’ll be better equipped to optimize what we produce—how and where—and to reduce logistics costs. This could involve, for example, using AI to help temporary manufacturing staff onboard and train themselves more quickly during peak seasons. Overall, we’re creating a fabric in which standardization can help us automate more and use intelligent technology to succeed and grow.”