SAP Manufacturing Transformation

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

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

In addition, it enables more precise tracking of the production flow, related costs and better control of delivery deadlines for customers. With new technologies, short production runs can be executed efficiently, giving companies greater flexibility and often higher margins.

Kimball Electronics Poland, part of the global Kimball Electronics Group, manufactures advanced electronic systems for three application areas: automotive, general industry and medical. These systems are used in sample analysis devices and monitoring systems for the medical market, steering control units, electronics for hybrid and electric vehicles, as well as smart gas meters and liquid flow management systems, among others. Growing customer requirements and increasing product complexity in the industries in which Kimball operates have made the previously used serial production model no longer fit for current needs.

The company needed:

• greater flexibility in production planning and execution,
• better understanding of manufacturing costs,
• improved material and component traceability in SAP,
• enhanced tracking of material flows,
• integration of production processes with quality control,
• improved management of available production capacity,
• better control over the availability and quality of master data used in SAP and other interconnected systems,
• integration of SAP with external systems used to define processes and record actual execution times of technological operations.

As a result, Kimball Electronics Poland initiated a project to transform its production model from serial production to contract manufacturing.

All for One Poland carried out an SAP enhancement project for the Kimball Electronics plant in Tarnowo Podgórne (mainly in the area of production support, but also in conjunction with quality control and materials and warehouse management). The project supported the transformation from serial production to contract manufacturing.

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

Currently (2025), the second phase of the project is underway. The phased project schedule results from the fact that changes are being implemented in a live SAP system (the production facility operates seven days a week in three shifts). In addition, Kimball’s existing in-house applications require significant modifications, particularly those used to record production at the serial-number level for each product.

In addition, significant organizational changes are being implemented, involving 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, including tools and programs to support production processes,
• interfaces with external Kimball applications used for: recording completed production, tests, errors and repairs, creating and modifying master data such as production routings, and changing production order routings when required,
• comprehensive quantitative and time-based records of production orders and materials,
• mapping of technical decisions and process changes in SAP resulting from testing,
• enablement of collaboration between production and engineering through better documentation of processes.

In parallel, the Kimball Electronics Poland team developed its own applications to support quality control and production management (including tracking of defects, tests, and repairs). To a large extent, these applications are also the source of data transferred to SAP for production settlement and communicate with each other through interfaces. The project involved automating the flow of required information and data. Therefore, the design and development of the necessary interfaces is also a significant part of this project.

As a result of the transformation of the production model and its implementation in SAP, the company gained:

• greater production flexibility and the ability to handle diverse orders,
• better quality control and faster response to production issues,
• enhanced cost-related information in SAP (both at the finished product level and at the level of 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 strong emphasis on the accuracy and availability of data and information in these systems, as they often form the basis for decision-making and determine the feasibility and sequencing of production and, consequently, deliveries to our customers.

As a result, both systems and data must be available immediately, at the time and place they are needed, without requiring additional resources. Therefore, we place strong emphasis on process automation, including processes related to IT systems.

During the project, All for One’s consultants successfully supported us in these efforts by demonstrating the capabilities of the SAP system and ultimately translating the business concept of operating in a contract manufacturing environment (developed by an interdisciplinary Project Team) into the technical preparation of the system for 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 facilities worldwide that are part of the global Kimball Electronics company. It manufactures high-quality electronic products for the automotive, industrial and medical sectors. Electronic components and medical devices manufactured at the plant in Tarnowo Podgórne near Poznań are used by leading manufacturers in Europe, Asia, and the United States. The company employs nearly one thousand people in Poland.

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

From a business perspective, the winner in the supply chain is the entity that can adapt to the customer’s requirements – whether in terms of reporting, logistics, or production execution. Often, this means moving away from serial production toward contract manufacturing, which enables full control over costs, materials, and delivery deadlines for each individual order. This model is much closer to real-world collaboration, where the priority is fast delivery of exactly what the customer needs, here and now.

SAP plays a key role in this process by standardizing operations, reducing lead times, and ensuring data transparency – from planning and purchasing through logistics to settlement.

Our experience clearly shows that the more structured the processes and the better “tuned" the systems, the greater the company’s ability to grow and serve more demanding customers. That is why SAP-based transformations are becoming a natural step in the professionalization of companies operating in international supply chains."