Very few Finnish companies are 140 years old, and even fewer have maintained their success with the same products for more than a century. This family gas business is a rare exception. Woikoski supplies gases for use in, for example, industry and healthcare. During the coronavirus pandemic, Woikoski has been one of Finland’s key security of supply companies, as it has been handling the vast growth in demand for medical oxygen. Woikoski’s net sales are approximately EUR 60 million, and it employs about 200 people. The company also sells products to many EU countries.
“This sector is dominated by major multinationals, which are becoming fewer and fewer in number. There aren’t very many independent gas companies like ours left in the world,” says Clas Palmberg, Woikoski’s owner and CEO. He is already the fourth generation of the family to run the company. Palmberg has also been president of the International Oxygen Manufacturers Association (IOMA), a global umbrella organisation for gas producers.
Five years ago, Woikoski realised that the company needed to completely restructure itself. Palmberg says that Woikoski’s operations had become stuck in a rut over the years and some inefficiency had crept in. Old systems – such as the twenty-year-old SAP – could no longer handle the company’s business in a smart way.
Woikoski decided to completely rebuild its business on a new digital platform. This posed an enormous challenge and was the biggest development project in the company’s history. “Building production facilities is child’s play compared to this,” says Woikoski’s Deputy CEO Sari Palmberg.
A major project with Digia to renew Woikoski’s entire business
Woikoski began building a new digital platform with Digia. Together, they went through virtually all of Woikoski’s operations and processes. “You won’t find many corners of Woikoski that haven’t been renewed,” says Teija Hölttä, who led the project for Woikoski.
The renewal project was also a massive operation from a technical perspective. The core of the project was to replace the old SAP system with a Microsoft Dynamics 365 ERP. This would help to steer and boost the efficiency of Woikoski’s various operations, such as production, deliveries, inventories and financial management.
Woikoski also built a large number of other systems, including a new customer portal and webstore using Magento software. Messaging was redesigned using an OWS solution, and reporting with Microsoft PowerBI. The efficiency of logistics and transport management received a boost from a new Unifaun system and Microsoft Power Apps.
Digitalisation increases both efficiency and quality
Palmberg says that operational efficiency is vital for Woikoski, as the company’s net sales are generated by a vast number of gas deliveries that are often worth only a few dozen euros each. This requirement for efficiency applies to logistics in particular. The company has hundreds of thousands of gas bottles and tanks that are bought or rented by customers, although the majority are owned by the company.
The new solutions significantly boosted the efficiency of Woikoski’s various operations. For example, Digia created an open-source IoT solution to automate the order process.
“Gas tank levels are now measured using IoT sensors, and this information is sent directly as sales orders and to logistics. Deliveries and tank refills are now organised automatically,” says Hölttä. This solution significantly reduces the amount of manual labour required and improves reliability.
It is also very important for both Woikoski and its customers that gas is delivered reliably and exactly as per the order. In the new system, this is ensured using RFID tags and QR codes, which can be read on mobile devices using the Dynamics 365 Finance and Operations app. If there are any inconsistencies between the order and the delivery, the system will not let the shipment go out. Other mobile functions to boost efficiency and improve quality were also created for Woikoski.
The systems do not operate in their own silos – they are all connected with modern integrations using Microsoft Logic Apps. This provides Woikoski with more opportunities to harness tools such as modern data analytics. Hölttä says that Woikoski intends to collect about a year of data, before analysing it to help improve things such as production control.
Woikoski’s new systems will mainly be run on cloud platforms, such as Microsoft Azure, and will be monitored by Digia Iiris.
Woikoski takes efficiency to a new level
The Palmbergs report that Woikoski obtained greater-than-expected benefits from the multiyear project. In their opinion, the two most important benefits generated by the project and new systems have been the elimination of unnecessary work and a significant boost to efficiency right across the board.
“We’ve gone through the company’s processes and renewed them. For some things, we’ve even created a process for the first time. Up-to-date reporting has been another important benefit for management. It’s hard to assess your business without proper indicators,” says Sari Palmberg. Woikoski is expecting substantial savings from the revamp, as operations are now more efficient and of a higher standard.
The Palmbergs are grateful to Digia, both for the assistance and how the project was carried out, that is, on the basis of a solid partnership between customer and supplier. Woikoski and Digia’s professionals sat around the same table throughout the project, and everyone had a strong desire to create a good overall package.
Clas Palmberg says that this was exactly the kind of team spirit that was required, as Woikoski did not always have a clear picture of how to implement certain processes in the most effective way. The best alternatives were not usually identified until the testing phase, which meant that many changes occurred along the way.
“Digia’s people did very well in this area. They were very flexible and adapted to the changes,” says Palmberg gratefully.
The deployment of the new system was a critical phase in the project. Palmberg reminds us that, although gas products themselves are affordable, they play a key role in industrial processes worth hundreds of millions of euros. A centre of operations was therefore established to deploy the systems. Specialists from both Woikoski and Digia monitored the deployment around the clock to ensure that everything went according to plan.
New digital platform creates a foundation for the future
Clas Palmberg says that the major successes in Woikoski’s 140-year history have generally arisen from the greatest difficulties. He himself had to renew Woikoski’s entire business at the turn of the 1970s and 80s, as their operations had practically ended up in the hands of their partner. The company’s quest for independence sparked off a ‘gas war’ that initially threatened Woikoski’s very existence, but eventually laid the foundations for many more decades of success.
The Palmbergs predict that this project with Digia will constitute another key moment in Woikoski’s history, and be absolutely necessary for the company’s continued success.
“If we hadn’t implemented this project, the company wouldn’t have had much time left,” says Clas Palmberg.
“We will now continue to develop both the company and its systems. Several crystal-clear development ideas have emerged during the project, and these will now be implemented,” he says.
With the aid of its new digital platform, Woikoski intends to keep Finland ‘breathing easily’, as per its mission.