The Takeaways from RHI Magnesita’s Planning Transformation

London, UK – At the recent Gartner Supply Chain Planning Summit held in London, RHI Magnesita, the global leader in refractory products and solutions, and o9 Solutions, a premier AI-driven planning software provider, gave a joint presentation covering their digital planning transformation journey. The session featured Ricardo Dominguez, Head of Global Digitalization and Product Governance, Supply Chain & Procurement at RHI Magnesita, and Joao Guarisse, VP of Industrial Manufacturing at o9 Solutions, who provided an in-depth look into the challenges faced, the implementation process, the value realized, and the lessons learned.

RHI Magnesita, the global leader in refractory products and solutions, operates in a niche yet essential industry. "For those unfamiliar, refractory products are materials that can withstand temperatures over two thousand degrees Celsius," explained Ricardo. "They are critical in manufacturing processes for steel, cement, and glass. Without them, this building wouldn't be here."

The company boasts over 50,000 SKUs and caters to more than 10,000 customer locations worldwide. Its products are highly customized and tailored to each client's unique furnaces, leading to a complex make-to-order and make-to-stock mix. "Our network is like a spaghetti diagram," Ricardo admitted. The complexity is immense due to our vertical integration, network flexibility, and global presence."

Following a significant merger in 2017 between RHI and Magnesita, the company faced the challenge of unifying disparate processes and systems. "We implemented many new processes, including Integrated Business Planning (IBP)," said Ricardo. 

"But we were heavily reliant on Excel and had fragmented processes. It became clear that what took us here will not take us there."

Implementation Journey

“From the very beginning, we decided that this project could not be an IT project—just an implementation of a new tool,” Ricardo explained. “We needed to deliver effective business transformation to unlock the potential that o9 would allow us to have.”

With this motivation in mind, RHI Magnesita embarked on a project aptly named "Everest." "It's a long climb," noted Ricardo. "It's challenging, but unlike Everest, we hope nobody's left behind and that we can take everybody in the company with us." The project’s key goals were to:

• Increase financial value through inventory optimization.
• Improve planning capabilities across various levels, from SKUs to main product groups.
• Reduce response times to customers by optimizing order promising.
• Manage supply chain disruptions more effectively.

He explained that the company sought a partner who could offer more than software—a collaborator in transformation. RHI Magnesita chose o9 Solutions, valuing their understanding of the company's unique needs and emphasis on partnership. "We preferred an approach where we presented our customer requirements and asked, 'What can you do to fix it?’” he elaborated.

“During this process, you really felt that [o9] understood us, the pain points, and how to tackle them, and I think that was a super advantage.” RHI Magnesita decided to implement o9 across the entire company, including recent mergers and acquisitions, across:

• IBP
• Demand Planning
• Supply Planning
• Order Promising

A critical aspect of the implementation was addressing the disconnection between processes and tools. The company transitioned from a heavily Excel-based system to an integrated platform allowing real-time data analysis and decision-making. "We wanted to have this integrated supply chain to understand if something happens on one end of the supply chain, what is the impact on the other end," Ricardo said.

RHI Magnesita strategically chose North America for the initial rollout. "Even the decision of which region we wanted to start the project with was: where will we get the most value from? And that was North America… we're already planning eight thousand items there,” he noted.

Path to Value Realization

Ricardo shared how an unexpected outage of a kiln in their York, Pennsylvania plant brought into focus the need for the o9 platform. "All of a sudden, we lost half of our manufacturing capacity at that plant," he recounted. "The supply chain planners had no idea which customers' orders were impacted by this."

"o9 will help us with situations like this," he continued. “When I talk about o9 internally, this is what captures people's attention. Because you can go from a tactical level and double-click until you get to an order level, and you can tell how your supply plan is, let's say, supporting your demand plan.”

Ricardo emphasized that while improving customer service levels is always a goal, tangible examples like this clarify the value proposition. “When I speak about this project to my colleagues inside the company, they all nod, but it doesn't touch their hearts, right?” he reflected. “But this specific example touches their heart.”

The o9 platform also enables the company to create a data-driven, unconstrained demand plan and convert it into a supply plan that factors in its production and delivery capabilities.

Currently, many organizations plan their demand with capacity limitations already in mind, which means they start with a constrained view. For example, in the past, RHI Magnesita’s sales teams would build forecasts based on historical data, creating a bottom-up approach that did not always reflect the unconstrained demand.

The o9 platform, however, enables the company to understand true customer demand—what customers are really asking for—without immediate restrictions. With o9, we start with a statistical forecast, which the sales team can review and try to improve based on their customer knowledge. The sales teams can focus on areas where they can truly add value, while o9 helps validate whether the forecast adjustments are accurate and beneficial. 

"We want to help the sales teams focus only on where they will add value. Later, o9 allows us to understand whether the forecast [adjustments] people are [making] add value. I think that’s brilliant.”

Lessons Learned

Reflecting on the journey, Ricardo shared his key lessons learned for companies considering a similar journey:

1. Emphasize Standards: The solution was built around aligning 80-90% with industry best practices. Deviations were only allowed if they offered a significant competitive advantage.
2. Leverage a Data Platform: Implementing a data platform between o9 and the source system simplified S/4 HANA transformations and helped streamline mergers and acquisitions by managing fragmented ERP systems.
3. Manage Change Closely: Change management was a top priority, ensuring that everyone involved in the project played an active role in managing the transition.
4. Build Strong Partnerships: A unified approach between RHI Magnesita, AIONEERS EFESO, and o9 ensured that all parties worked closely as a single, experienced team, driving the project forward.
5. Focus on Fast Value Delivery: The initial go-live was achieved in 4-5 months, quickly digitizing processes and enabling users to familiarize themselves with the system, supporting early adoption and change management.

RHI Magnesita’s digital planning transformation, in partnership with o9 Solutions, serves as a powerful example of how strategic collaboration and a clear focus on value delivery can drive meaningful change in complex, global supply chains. Through the "Everest" project, RHI Magnesita is striving to achieve unified processes across its diverse operations, shifting from manual, Excel-based systems to a real-time integrated platform. Ultimately, RHI Magnesita’s story underscores the potential of AI-driven solutions like o9 to improve the speed and quality of decision-making at scale and unlock significant business value in today’s volatile and complex landscape.

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