STIHL: Transforming financial planning with innovative, integrated solutions
Explore STIHL’s journey with SAP
Millions of customers worldwide expect the best from ANDREAS STIHL AG & Co. KG, a manufacturer of equipment and power tools. To keep up with fast-changing markets, customer demand, and disruption, STIHL deployed SAP solutions for extended planning and analysis. Now, the company is making data-driven decisions based on a single source of truth.
| Industry | Region | Company Size | Partner |
| Industrial manufacturing | Waiblingen, Germany | 20,000 employees | Accenture |
source of truth across S&OP and financial planning.
faster processes based on automated gross margin planning.
greater resource utilization planned midterm through analysis.
Senior Vice President, Group Controlling, ANDREAS STIHL AG & Co. KG
Standardizing enterprise planning across functions to enhance decision-making
For more than 25 years, ANDREAS STIHL AG & Co. KG has been a market leader in the manufacture of high-quality equipment, handheld chainsaws, and other power tools for personal and industrial use. The forestry and agriculture sectors, as well as garden and landscape users, depend on STIHL every day.
STIHL must meet the fast-changing demands of its customers despite ongoing disruption in the company’s markets around the world. These include the impacts of the COVID-19 pandemic, supply chain uncertainty, global geopolitical conditions, and customers’ increasing click-to-delivery mindset. Together, they mean the company needs more detailed and accurate information during planning and forecast processes.
STIHL’s planning was highly localized, supported by a custom nonstandard system landscape built for local requirements. The lack of governance resulted in time-intensive, complex, and manual planning processes. Different, isolated local planning approaches made it difficult to get a consolidated enterprise-wide view of key data. Without integration between value and volume planning, the company risked inconsistencies between its financial and production plans.
So, STIHL decided to transform its disconnected planning and forecasting processes into an integrated company-wide enterprise planning process. For this, the company would need to be able to use all its available data.
Team Lead, Financial Planning, ANDREAS STIHL AG & Co. KG
Creating a single source of truth for finance planning information
STIHL chose SAP solutions for extended planning and analysis (xP&A), including the SAP Analytics Cloud solution for planning and the SAP Integrated Business Planning (SAP IBP) for Supply Chain solution, and SAP S/4HANA. The combined power of these solutions enabled STIHL to create a foundation for virtually all its finance processes and sales and operations planning (S&OP), as well as plan both values and volumes on a detailed level.
During its digital transformation, STIHL integrated and streamlined its cost center accounting, investment planning, and gross margin and inventory-change planning processes. SAP partner Accenture provided comprehensive extended planning and analysis expertise as part of the project.
In cost center accounting, STIHL simplified data collection and gained a bottom-up and top-down planning approach. This transformation helped simplify data collection with automation, and the tight integration with supply data from SAP IBP means STIHL can gather direct insights into machine and personal hours. The solutions enabled the company to integrate statistical internal order planning with cost center planning, too.
The complex investment planning process was transformed into a single module in SAP Analytics Cloud for planning that included data creation such as budget planning and depreciation key maintenance. The process is orchestrated by an OData service from SAP Analytics Cloud for planning into SAP S/4HANA.
Gross margin and inventory-change planning was enhanced with the highest level of automation and transparency gains out of any of the company’s improved processes.
All the while, the SAP BW/4HANA solution serves as the central backbone of the enterprise planning transformation, which uses the power of virtual connections enabled by SAP HANA smart data access. To eliminate various manual processes, the company connected the sales volumes and production data on the material number level from SAP IBP in SAP BW/4HANA as well as data from SAP S/4HANA such as discounts, prices, and standard costs. STIHL also uses SAP BW/4HANA to manage complex calculations, and it enables efficient process orchestration with OData services. In addition, SAP IBP offers STIHL supply chain analytics, what-if simulations, and alerts that enable the business to quickly respond to changing business conditions.
Global Solution Architect, Financial Planning, ANDREAS STIHL AG & Co. KG
Pivoting quickly to address changing customer needs
STIHL has 42 subsidiaries and went live with SAP solutions at 24 of them in their sales and marketing entities as well as one production entity. With the new integrated financial planning solution, STIHL is seeing many benefits among these subsidiaries.
The company successfully integrated company-wide data that now serves as a single version of the truth across the enterprise. This supports advanced analytics in SAP solutions, enabling better planning outcomes and automation and improving communication by eliminating data disputes.
In planning and forecasting, STIHL has greater granularity that has led to increased transparency. The company has combined operational and financial data, and it achieved additional details on product volumes across the bill of materials. Now, STIHL can understand the impact of variables (such as price, cost of goods sold, volumes, and investments) on profitability or the supply chain.
All this, based on SAP solutions, enables data-driven decision-making using detailed analysis of financial and supply chain data. SAP solutions also support better governance throughout planning processes with a clear matrix for assignment of process responsibilities and system-supported process tracking, which limit iterations and rework. This reduces the effort of many financial and S&OP processes, freeing up the capacity of planning and analysis.
Extending to include new regions and evolve planning to the next generation
STIHL intends to complete its rollout of SAP solutions to the rest of its subsidiaries’ sales and marketing entities as well as its remaining manufacturing plants within the next few years.
The company has a clear vision and plans to further extend the foundation set by SAP solutions so far. Specifically, it wants to implement an automated balance sheet and liquidity planning solution in finance. An automated, flexible, and real-time plan reporting package is in preparation. It will introduce the distribution requirement planning in S&OP after having already implemented the functionalities of rough-cut capacity and master production planning.
STIHL will also use SAP Analytics Cloud in its liquidity planning. The solution, currently in development, will rely on a direct method for planning and forecast data automatically sourced from financial planning and combined with short-term forecast data from SAP S/4HANA.
New functionalities across functions are in the backlog, such as a connected scenario and driver-based planning, as well as further connecting other areas such as HR and procurement.
Featured partner
STIHL turned to Accenture, an SAP partner, throughout its digital transformation project. Accenture’s comprehensive extended planning and analysis expertise empowered STIHL to bring enterprise planning to the next level at locations around the world.