SAP Manufacturing Transformation

There are many business and market reasons why, in certain industries, companies are moving away from mass production to contract manufacturing. Customers’ expectations are changing, with increasingly specific requirements to match products to their own expectations.

Contract manufacturing is better suited to the increasing variability of the product mix: from long runs produced over many years, to multi-variant production done in shorter and shorter batches.

In addition, it allows more precise tracking of production flow, related costs and control of customer delivery dates. With new technologies, short runs can be completed efficiently, giving companies greater flexibility and often higher margins.

Kimball Electronics Poland, part of the global Kimball Electronics Group, manufactures advanced electronic circuits for three application areas: automotive, general industry and medical. They are used in sample analysis devices and monitoring systems for the medical market, steering controllers, hybrid and electric vehicle electronics, as well as smart gas meters and liquid flow management systems, among others. Increasing customer demands and the growing complexity of products in the industries in which Kimball operates have meant that the batch production model previously used no longer meets current needs.

The company needed:

• greater flexibility in production planning and execution,
• A better understanding of manufacturing costs,
• Improve traceability of materials and components in SAP,
• Improve tracking of material flow,
• Integration of production processes with quality control,
• Improving the management of available production capacity,
• Improve oversight on the availability and quality of master data used in SAP and other systems that communicate with each other,
• SAP integration with external systems used to define processes and record the actual execution time of technological operations.

This determined Kimball Electronics Poland’s decision to initiate a project to transform from mass production to contract manufacturing.

All for One Poland has carried out a project for the Kimball Electronics plant in Tarnowo Podgorne to expand SAP (mainly in the area of production handling, but also in conjunction with quality control and material and warehouse management), supporting the transformation from batch to contract manufacturing.

Work began with analysis in 2020, and the first phase of the project started in 2021. November 2024 saw the go-live pilot of the new solution, based mainly on the SAP PP (Production Planning) module, with elements of MM (material accounting) and WM (material flow).

Currently (2025), the second phase of the project is underway. The staggered work schedule is due to the fact that changes are being made to the SAP system in operation (the production facility operates seven days a week in three shifts). In addition, the in-house applications Kimball has used so far, particularly those for recording production at the serial number level of each product, require significant modification.

In addition, significant organizational changes are being implemented related to the assignment of new tasks and responsibilities to the company’s employees.

The project included the following work:

• SAP development in the area of contract manufacturing: tools and programs to support production processes,
• interfaces with external Kimball applications for: recording of completed production, tests, errors and repairs, creation and modification of master data such as production markups, changes to production order markups if they need to be modified,
• Full records of production orders and materials, quantity and time,
• SAP mapping of technical decisions and process changes resulting from testing,
• Facilitate collaboration between production and engineering through better documentation of processes.

In parallel, the Kimball Electronics Poland team has been developing its own applications to support quality control and production management (including bug tracking, testing, repair). To a large extent, these applications are also the source of data transferred to SAP for production accounting and communicate with each other through interfaces. The project involved automating the flow of required information and data, so the design and creation of the necessary interfaces is also a significant part of this project.

With the transformation of the production model and its mapping in SAP, the company gained:

• greater production flexibility and the ability to handle diverse orders,
• better quality control and faster response to problems in production,
• Improved information in SAP on costs related to production (both at the level of the entire product and individual production orders),
• better interdepartmental cooperation – engineering and production work on common, consistent data.

Przemysław Szkudlarek, Logistics Manager, Project Manager at Kimball Electronics Poland concludes: “IT systems, including SAP, are an essential and indispensable element of managing the modern production processes we carry out at Kimball Electronics Poland. We place a very high emphasis on the accuracy and availability of data and information in these systems, as they often form the basis of decisions made and determine the possibility and sequence of production of products and, consequently, deliveries to our customers.

As a result, both systems and data must be available on the spot, when and where they are needed, without requiring additional resources. Hence the strong emphasis on automating processes, including those related to information systems.

During the project work, All for One’s consultants successfully supported us in this effort by demonstrating the capabilities of the SAP system and ultimately translating the business idea of operating in a contract manufacturing environment (an interdisciplinary Project Team) into technically preparing the system to operate in this environment by creating the required extensions, reports and interfaces with other systems operating at Kimball Electronics Poland."

Kimball Electronics Poland is one of nine factories worldwide that are part of the global Kimball Electronics company. It produces high-quality electronic products for the automotive, industrial and medical industries. The electronic components and medical devices created at the plant in Tarnowo Podgorne near Poznan are used by leading manufacturers from Europe, Asia and the United States. The company employs nearly a thousand people in Poland.

Michał Mrożewski, Business Development Manager – Supply Chain at All for One Poland: “Today’s supply chains are increasingly dynamic and end manufacturers (OEM, Original Equipment Manufacturer) require from their EMS/CM (Electronics Manufacturing Services/Contract Manufacturer) suppliers not only high quality, but above all operational flexibility.

From a business perspective, the entity in the supply chain that can “fit in" with the ordering party – whether in terms of reporting, logistics or the way production is carried out – wins. Often this means moving away from batch production to contract manufacturing, which allows full control of costs, materials and deadlines for each order separately. It’s a model much closer to the realities of collaboration, where the priority is to quickly deliver what the customer needs here and now.

SAP plays a key role in this process, as it allows to standardize operations, reduce lead times and, above all, provide data transparency – from planning and purchasing to logistics and billing.

In our experience, it is clear that the more structured the processes and better ‘tuned’ the systems, the greater the company’s ability to grow and serve more demanding customers. That’s why SAP-based transformations are becoming a natural step in professionalizing companies operating in international supply chains."