IBM Software

Industry Solutions Development

Automotive Manufacturing

Johnson Controls reduces

supply chain spend with
IBM ILOG LogicNet Plus
Background
Overview
Challenge
Johnson Controls was looking for a supply
chain management solution that would
allow it to make informed decisions quickly,
while optimizing their efficiency at every
point of the supply chain lifecycle.

Solution

Johnson Controls Power Solutions delivers batteries to its more than

10,000 customer locations on a regular basis. This world-class delivery
operates within a closed-loop battery supply chain. On delivery of
batteries to its customers, Johnson Controls picks up spent batteries at
each location. The spent batteries are then transported to a licensed
smelter for recycling. The recycled products are sent back to Johnson
Controls battery plants. Raw and recycled materials are manufactured
into new batteries which starts the closed-loop process again.

Johnson Controls selected a supply chain

management solution built around IBM
ILOG LogicNet Plus XE. The solution
provided the company with an accurate
model of their supply chain that contributed
to quick analysis and better decision
making.

Benefits
The capabilities offered by the IBM ILOG
LogicNet Plus XE solution allowed Johnson
Controls to embed optimization deep into
their supply chain, helping to reveal hidden
savings opportunities and optimize supply
chain efficiency.

Figure 1: Johnson Controls closed-loop battery supply chain

Source: Johnson Controls, Inc.

Challenge
The complex closed-loop supply chain structure can be costly if not
executed with world-class practices. The coordination of delivery,
pick-up, purchasing and manufacturing of the batteries and materials
needs to be well planned with customers and suppliers.
This requires Johnson Controls to make optimal decisions with how
the supply chain activities are executed:

Which suppliers and facilities should be used to optimize

transportation costs?
How much capacity should be contracted with each supplier and
facility?
Which battery plant and distribution center should serve which
customers?

IBM Software
Industry Solutions Development

Solution Components
Software

IBM ILOG LogicNet Plus XE

Im using LNP XE every

week to perform modeling on
a variety of projects from
small capacity analysis/capital
investment decisions to
quarterly financial
forecasting and annual
budgeting for capacity
utilization, plant
manufacturing, and shipping
territories. LNP XE has
allowed us to create clear
pictures of our network,
starting with a best-case
utopia state and then
quantifying the impact of
each constraint. This clarity
can reveal hidden savings
opportunities as well as gives
complete insight into the
main drivers of our supply
chain
Chad Montgomery
Supply Chain Network Strategy Manager
Johnson Controls, Inc

Automotive Manufacturing

Johnson Controls determined the best way to make these decisions

effectively was to employ technology that allowed them to optimize
every move within the supply chain.

Solution
Johnson Controls selected IBM ILOG LogicNet Plus XE (LNP
XE). LNP XE enabled Johnson Controls to build a model of its supply
chain to guide decision making. LNP XE facilitates quick analysis of
the tradeoffs between production, warehousing, transportation costs,
carbon footprint, and service requirements; as well as the calculation of
the optimal network configuration for different cost and service
objectives.
Johnson Controls updates the model by collecting data from across the
organization. Operations, purchasing and transportation departments
continually provide updated costs, rates and capacity to support the
model.
LNP XE has become an integral and ongoing part of the supply chain
planning at Johnson Controls. LNP XEs ease-of-use, functionality, and
ability to model a complex closed-loop network allows Johnson
Controls to embed optimization deeper into its supply chain and join
the growing list of companies using advanced analytics to drive smarter
decisions.

About Johnson Controls

Johnson Controls is a global diversified technology and industrial
leader serving customers in more than 150 countries. The companys
162,000 employees create quality products, services and solutions to
optimize energy and operational efficiencies of buildings; lead-acid
automotive batteries and advanced batteries for hybrid and electric
vehicles; and interior systems for automobiles. This companys
commitment to sustainability dates back to their roots in 1885, with the
invention of the first electric room thermostat. Through their growth
strategies and by increasing market share they are committed to
delivering value to shareholders and making their customers successful.
For additional information, please visit http://www.johnsoncontrols.com.

IBM Software
Industry Solutions Development

Automotive Manufacturing

IBM Software
Industry Solutions Development

Automotive Manufacturing

Copyright IBM Corporation 2012

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Produced in the United States of America
June 2012
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