Pirelli, a leading tire company, is in the midst of a digital transformation. The transformation aims to utilize data, digital ecosystems, and AI to enhance data-driven decision-making. The goal is to provide more value to dealer customers by equipping their sales representatives with actionable data on potential orders. This transformation is spearheaded by Pier Paolo Tamma, the Chief Digital Officer at Pirelli, who oversees the digital department at the group level.
Pirelli’s Supply Chain: A Complex Network
Pirelli, headquartered in Milan, Italy, focuses on the high-value segment of the market, providing tires for premium and prestige car makers. The company has a complex supply chain, designing specific tires for specific models of luxury brands. This results in a larger number of SKUs compared to their competitors. The challenge for Pirelli is determining the number of units to be produced and predicting the replacement demand. This demand forecasting is done in collaboration with OEM customers.
The Digital Transformation: A New Approach to Sales and Planning
Pirelli’s digital transformation aims to transition from a traditional sales approach to a consultative sales approach. This new approach involves providing dealers with precise forecasts of what they would need to buy to support the replacement demand. The transformation also required the company to rethink its planning and design processes. The challenge was to implement a new digital platform that could scale to meet its complex integrated business planning process.
The Implementation of o9 Solutions
Pirelli chose o9 Solutions for its supply chain planning. The o9 solution creates a digital twin of the supply chain and supports complex SKU by point of demand forecasts. The supply model also encapsulates where tires are stored, considering different commercial arrangements by region and channel. The supply chain planning project has three phases: strategic planning, tactical planning, and detailed scheduling for the factory.
Monitoring ROI and Future Plans
Pirelli has also developed an ROI monitoring system to fine-tune their models as results come in. Understanding the ROI associated with strategic planning will take several years due to the length of the planning horizon. However, Pirelli has used the o9 platform to monitor deviations from the original plan, providing valuable insights for key stakeholders.
