Causal MRP: eliminating $55M of annual premium freight
Global agricultural equipment manufacturer
$55M annual reduction in premium freight costs, delivered alongside existing SAP MRP with no platform replacement
Challenge
Premium freight costs were running at $165M per year, driven by reactive ordering triggered by downstream supply shortages. Existing SAP MRP was optimized for steady-state conditions and could not distinguish supply events that required urgent action from those that would resolve without intervention.
Approach
A Causal MRP solution was built alongside the existing SAP deployment, adding a causal reasoning layer that identified the true drivers of stock-out risk and premium ordering events. The model separated genuine causal risks from correlated noise, so supply planners could intervene earlier and with greater precision.
Outcome
Premium freight costs reduced by $55M per year. Purchasing interventions became better targeted and better timed, and planners could justify every corrective action with a clear causal rationale rather than threshold-based alerts from an opaque system.