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September 26, 2023

Northvolt powers the energy revolution with Dynamics 365

Northvolt’s mission—manufacture the greenest battery in the world with a minimal carbon footprint—is much like its product: simple, clean, transformative. The young Swedish changemaker is leading the way for Europe to establish a new battery industry, with a bold, sustainable model centered around ethical sourcing, renewable energy, and recycling. 

Northvolt’s first battery gigafactory is already powered with clean and locally sourced renewable energy, and the company is rapidly establishing recycling capacity to enable a significant reduction in consumption of fresh raw materials.

Northvolt

Though their business is batteries, their vision is a decarbonized future. Northvolt’s lithium-ion cells are designed to be highly recyclable to reduce the overall impact of the battery lifecycle. Northvolt is set on a path to change the world for the better—and they’re using Microsoft Dynamics 365 to make it happen.

With plants in various stages of development across northern Europe and billion-dollar contracts to fulfill, it might be hard to believe that Northvolt is in its start-up phase. Rapid growth, fluctuating priorities, warp-speed factory construction, and start-up financial considerations set the scene for daily life at Northvolt. With such an extreme business reality, their strategy rests on four principles: Be extremely adaptable, highly scalable, immensely repeatable, and extremely cost efficient.

“With Dynamics 365 we have blueprinted an ERP solution that we can roll out in three months to new factories. That is something I have never seen before—that is really amazing.”

Fredrik Ohlsson, CIO, Northvolt

Focusing on the future

The Northvolt team’s main objectives in turning to Dynamics 365 were to support exponential growth, quickly and reliably adapt to cost-effective and necessary changes at all levels, and reliably support fully automated facilities. The outstanding flexibility and agility that Dynamics 365 offers was the perfect solution to deliver a scalable foundation that can successfully manage the company’s rapid growth trajectory. Dardan Imeri, ERP Lead, explains that their “ambition was to have a system that can support start-up to scale-up with all supply chain processes in place.”  

Northvolt’s singular focus is a greener, cleaner future. Since their founding in 2016, they have established several production facilities. One, in Gdansk, Poland, is designed for the industrialization and assembly of battery modules and solutions. It has been running Dynamics 365 since June 2019. Northvolt Labs, in Vasteras, Sweden, went live in early 2020. It’s an R&D facility where they design and produce battery cell products. Northvolt Ett, in Skelleftea, Sweden, is Europe’s first gigafactory. Northvolt Ett has already secured a permit for expansion to 60 GWh, a supply of cells sufficient to power a million electric vehicles per year, to fulfill more than $55 billion worth of contracts from key customers, including BMW, Fluence, Scania, Volkswagen, Volvo Cars and Polestar. 

The solution

Northvolt uses Dynamics 365 Finance and Supply Chain Management for financials, procurement, material requirements planning, warehouse management, and production in conjunction with their homegrown battery manufacturing execution system, Northcloud. Seamless and reliable integration with Northcloud was crucial to optimize production and drive a fully automated, robotics-driven gigafactory.

Northvolt Ett is notable in that it’s powered with 100% fossil-free energy. As construction continues to expand the facility's footprint to a whopping 1.5 million square meters, the enormity of the facility requires superior automation. Thanks to the swift integration with Northvolt’s Automated Storage Retrieval System (ASRS), Dynamics 365 enables speed and accuracy that would simply be impossible without automation.

From blending chemicals to creating the batteries to charging and discharging them, each step of production goes through Dynamics 365. Northcloud keeps track of every piece of material and its movement in the factory. The Dynamics 365 material handling equipment interface (MHAX) allows Dynamics 365 to interact with Northcloud traffic control and speak to the Automated Guided Vehicles (AGVs) and the ASRS efficiently, expediently, and accurately. Dynamics 365 Supply Chain Management provides an enhanced view of stock. Dynamics 365 easily integrated with Northvolt’s MES, ASRS, and AGVs, saving the quickly growing company months of planning and implementation time.

“Dynamics 365 allows us to flexibly integrate new use cases and automate our end-to-end processes allowing us to scale without the proportional need of adding people.”

Alexander Steif, VP Supply Chain Management, Northvolt

Agile from the beginning

As a greenfield company, Northvolt wasn’t coming off a legacy system. That meant they were defining their business processes during implementation. And looking through a sustainability lens applies to everything they do, including adopting an ERP. As any good steward of the environment would tell you, the goal is to leave no waste. Northvolt applied that ethos with a pure buy-not-build approach. The “no customizations” policy—to only use what’s standard in Dynamics 365—means the company can stay nimble and replicate easily, all while enjoying the most up-to-date features. If a deviation requiring customization is discovered, Northvolt uses the no code/low code Power Platform to extend the solution.

Using Power Apps for tailored workflow tracking and monitoring, and Power Automate for seamless notification and processing, Northvolt enjoys high visibility for quick collaboration. Important controls like segregation of duties are secured. Approval processes move swiftly through an automated workflow where users can easily respond in Teams or email.

Some parts of the company’s procurement processes are too short-term for optimal tracking in Dynamics 365. When a purchase order is created for equipment that requires assembly, individual pieces are tracked and accounted for with a Power App, which Northvolt refers to as “WMS Lite,” to manage the assembly process. Then the whole machine is fed into Dynamics 365 as a fixed asset.

ERP Lead Imeri credits this approach as key to their success. The agility and flexibility of Dynamics 365 allows for a range of business models to accommodate R&D, labs, production, and even the construction of their facilities. It makes repeatability and scaling up second nature. Northvolt can focus on business operations and activities without having to worry about processes.

The perfect engine

Frequent and fast Microsoft updates are critical for the sustainability leader’s success as well. That includes the recently activated trickle feed for export to Azure Data Lake, which supplies near-real-time data from Dynamics 365 to the business. Status of production orders, purchase orders, and other crucial supply data is updated every minute, a pivotal productivity indicator, now update-to-date and visible across the board. Speed is imperative at Northvolt. Adding to their efficiency and time savings is their adoption of priority-based scheduling, a feature that ensures system updates with near-zero downtime. With this feature, relative scheduling priorities, based on business requirements, are used to determine the order in which tasks are run across available servers. This orchestration means the business runs along with system maintenance.

Central to Northvolt’s business strategy is rapid growth. Together, Dynamics 365 Finance and Supply Chain Management are the perfect engines to power their need to scale. 

And with those quickly multiplying legal entities, Northvolt relies on the transparency and agility of Dynamics 365 Finance intercompany transactions. Information is entered once and updates system-wide automatically. A purchase order from Sweden automatically becomes a sales order in Poland, balancing the books in each location.

“At Northvolt, we use Dynamics 365 to support our end-to-end business processes, accelerate our Gigafactory implementations, be cost efficient and also to have the user experience that the end users need.”

Dardan Imeri, Sr. ERP Manager, Northvolt

Doing more with less

Automating business processes is only efficient if users say it is. Northvolt’s business users have really appreciated the streamlined, actionable activities powered by Dynamics 365. For example, to enhance collaboration, Northvolt used Power Automate to optimize the purchase requisition approval process. This workflow uses the rules set in Dynamics 365 to direct spending approvals through Teams and email, where users can easily review, approve, and reject purchase requests. With an automatic update reflected in Dynamics 365, the order is on its way with no delays.

As a young, entrepreneurial company, Northvolt seizes opportunities to take advantage of optimization and efficiencies. Of over 5,000 employees, only a small proportion of employees are in warehouses. Tools to keep the lean team focused on value-adding activities are essential. The query feature in the Warehouse Management application saves time and reduces the fatigue associated with manual tasks. Using a flexible data inquiry process, workers can easily look up information as part of embedded Warehouse Management Mobile app flows and apply filtering options so that only relevant data is shown. Not only does this increase productivity and motivation, but it can be done entirely on the handheld scanner, literally putting agility and flexibility in users’ hands.

Charging ahead

Northvolt is leading a revolution by using its circular production and recycling economy to achieve its goal of 150 GWh by 2030, even as they ramp up to meet increased demand from a growing number of customers. Microsoft is proud to power their renewable energy revolution, driving sustainability and efficiency for Northvolt—and the planet.  

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