Iveco Group’s intelligent supply chain ensures efficiency and sustainability

From a traditional supply chain to an intelligent supply chain

The Iveco Group has 20 industrial sites, 31 research and development centers, 8 major global brands, and over 6,000 patents, all of which are supported by over 36,000 employees daily. This global network maintains the company’s ability to produce, distribute, and service commercial vehicles of different sizes – some of which are used to provide public services – as well as tailor-made financial services and insurance solutions.

Iveco Group operates in an extremely complex world characterized by great potential on one hand and substantial heterogeneity in its supply chain processes, platforms, and technological and operational choices on the other hand. This had led to less visibility into disparate ways of working than the company wanted. In response, Iveco Group created a Control Tower, from which it could monitor the entire global supply chain and track the convergence of data and measurements related to the most critical points of its business. This made it possible to ensure comprehensive monitoring and analysis capabilities for all processes, allowing the company to increase the reactivity, speed, accuracy, and reliability of all related decisions.

“We invested 6-8 months to acquire the right awareness of how to apply digital transformation in our supply chain and we understood that to materialize the strategic vision of the Iveco Group’s digital supply chain, we would have to undertake a journey of progressive growth to gradually create and refine the Digital Control Tower and work together with partners capable of accompanying and supporting us along the way with regard to the technological challenge and the change in business paradigms.”

Federico Baiocco, Head of Logistics of Iveco Group

The Scrum approach for supply chain digitalization

To ensure the project’s success, Iveco Group engaged Capgemini, which provided substantial expertise related to the automotive industry and with Amazon Web Services (AWS) supply chain solutions. Working as a single unified team, the partners used a Scrum-based design methodology, which enabled the project team to follow an Agile approach.

This began by establishing the key objectives and the various factors and uses cases that would contribute to the new supply chain structure. For example, the project team identified that Iveco Group would benefit from the dock scheduling, which allows a company to plan, organize, and track shipments accurately thanks to an algorithm capable of automating arrival agendas and supplier deliveries. As a result, the solution would eliminate vehicle queues outside of warehouses and delivery locations while taking unexpected changes or emergencies into account.

Throughout the development phase, Iveco Group and Capgemini made sure to apply sustainable and cost-efficient principles. This included cloud storage, which uses serverless technology to optimize resources as much as possible by allocating them on request.

“Harmonizing various heterogeneous systems means starting from data retrieval and then having a data catalogue. This is what we are doing with the Control Tower. Every time a piece of data or a particular information flow that has certain content is inserted, we catalogue it to make it available externally. The complexity therefore lies in the work of reconciling heterogeneous information in a format that is uniform, documented, understandable, and of high quality.”

Gabriele Genova, Head of ICT Supply Chain and ICT Manufacturing of Iveco Group

Complete traceability and long-term planning

The technological choice of the cloud represented one of the key factors of the project. Based on AWS cloud technology, the solution allowed Iveco Group to create a data platform and a strategic plan that covered data collection, source management, the centralization of heterogenous processes, and the use of AI and machine learning solutions, all of which was integrated with the entire Iveco Group ecosystem.

The use of a cloud-based solution enabled Iveco Group and Capgemini to utilize an incremental development plan, which proved essential for such a complex and structured project that included a large number of use cases, systems, and services. Meanwhile, an intelligent supply chain allows Iveco to involve external partners such as suppliers and OEMs, who utilize collaborative tools that allow them to avoid costs associated with operational bottlenecks, effectively manage reports, optimize inventory in real time, and improve forecasting and resource allocation.

Two key use cases in particular demonstrated the value provided by the Control Tower. The first, E2E Inbound Traceability, provides Iveco to track and monitor all shipments through the Control Tower. This analysis includes a precise evaluation of the estimated time of arrival (ETA) and can identify and manage possible issues or disruptions in real time.

And thanks to Supplier Arbitration, Iveco can optimize the reception of parts from external suppliers, maximizing its value and minimizing its risks. In particular, this use case addresses the long- and medium-term planning of shipments by integrating Dock Scheduling for the organization of shipments and Yard Management to cover the management of arriving shipments.

A roadmap for sustainability

Iveco Group’s Control Tower allows the company to reduce its direct and indirect waste, which contributes to the organization’s sustainability targets.

Considering the growing importance of sustainability reporting, the first step in pursuing sustainability targets for emissions is to track the CO2 generated by shipments of components, finished goods, and spare parts. According to the guidelines identified by the GHG Protocol, these emissions fall under “Scope 3” within two different categories: “upstream transport and distribution” and “downstream transport and distribution.”

The solution developed by Capgemini and AWS provides an “end-to-end” tool capable of optimizing data collection from many different sources, automating the calculation of CO2 emitted globally and showing strategic insights and KPIs related to their origin/distribution in near real-time.

In addition, Iveco Group plans to continue to pursue sustainability with a roadmap that includes the development of modeling and simulation tools to enable the automatic monitoring of CO2 in line with the reporting logic of the Iveco Group Sustainability Report. The company plans to investigate the possibility of accessing data analysis tools that will help it use simulated scenarios to intervene on strategic choices with a view of both actual value ​​and possible business cases.

Thanks to the incremental approach adopted in the design phase, the collaboration between Iveco Group, Capgemini, and AWS makes it possible for the automotive company to develop new use cases in support of continuous improvement. Already, the company has identified another opportunity in the Urgent Freight use case, which will make it possible to review the choices that determine the use of urgent transport and enable more convenient, effective, and sustainable alternative solutions.