The automotive industry is undergoing sweeping changes. In a competitive environment marked by mergers and acquisitions, with rival companies and new car models entering established markets, manufacturers compete globally to maintain and expand market share and customer loyalty. Against this backdrop, they face continuing cost pressures to streamline production processes as well as a manufacturing trend that departs from traditional make-to-stock processes toward make-to-order production to fulfill individual customer requirements. To maintain long-term customer loyalty and competitive edge, automotive companies need to react even more quickly, flexibly and specifically to customer demands. Success depends on speed in product development, assembly and delivery to customers.

These market pressures and ever-growing environmental and safety regulations have put new demands on automotive manufacturers, suppliers, importers and dealers. The global automotive network is more complex than ever. Collaboration among all industry players is essential. Original equipment manufacturers (OEMs) are outsourcing more responsibility to their suppliers and building flatter hierarchies and agile global structures across distant, interconnected value chains. The right components must be delivered when and where they are needed, requiring a highly interlinked network of OEMs, system and parts suppliers, development partners, dealers, customers and business partners that must be organized and optimized globally.

SAP offers targeted support for the specific business processes within all types of automotive companies, including OEMs, suppliers, importers and sales and service organizations. With SAP for Automotive, SAP combines SAP Business Suite applications with industry-specific functionality, helping automotive companies gain a competitive advantage by integrating the entire engineering, manufacturing, supply, sales and service business chain.

Business benefits of SAP for Automotive

SAP for Automotive is a comprehensive, integrated solution that helps companies achieve:

• Improved efficiency – SAP for Automotive allows companies to maximize revenue opportunities, manage and control costs, improve quality, and accelerate time to delivery.
• Reduced risk – Real-time information about projects, processes, operational performance, and markets gives companies early warning of shifts in demand, customer requirements, and economic conditions.
• Increased visibility and control – Advanced analytics allow companies to identify precisely where they're incurring product and production costs, enabling them to increase efficiencies across all assets.
• Faster time to market – SAP solutions accelerate time to market by enhancing communication, improving collaboration, and maintaining consistent data across engineering, manufacturing, and distribution processes.
• Expanded reach – With SAP solutions, companies can manage their entire automotive eco-system, communicating through enterprise portals, enabling global collaboration among employees, partners, and customers.
• Higher sales – SAP solutions enable companies to anticipate and adapt to market needs, identify new business opportunities, and explore new ways to grow market share, revenues, and profits.
• Improved supply chain management – State-of-the-art supply chain management and locate-to-order, make-to-order, and make-to-stock processes provide insights into demand, inventory, and capacity – enabling companies to respond to customer needs.
• Enhanced aftermarket service – With SAP solutions, companies can understand customer needs, enhance customer service, and provide superior support to maximize revenues in the high-margin aftermarket business.
• Lower total cost of ownership – SAP for Automotive reduces total cost of ownership by providing best-of-breed functionality and eliminating the need for the costly interfaces required by point solutions.
• Seamless integration – SAP solutions seamlessly integrate key areas of the enterprise, including supply chain management, customer relationship management, product life-cycle management, enterprise resource planning, and business intelligence.

Key Statistics for SAP for Automotive

There are more than 1,600 customers of SAP for Automotive worldwide, including Bosch, DaimlerChrysler, Delphi, Iveco, Nissan, Tenneco Automotive, Volkswagen and ZF.

Industry-specific capabilities of SAP for Automotive

Original Equipment Manufacturers (OEMs)

• Integrated product and process engineering supports product and process engineering from the early planning phase to the product launch, providing consistent master data throughout the entire product life cycle. The solution also provides tight integration of engineering and manufacturing processes, including engineering change management, for highly configurable products.
  
• Collaborative engineering provides complete visibility into changes made by any internal or external partner at ulany time in the vehicle development process.
  
• Model-mix planning enables model-mix planning and sequencing for different models, types and configurations on a network of production lines, resulting in an optimized sequence, minimal restriction violations and maximum on-time delivery.
  
• Rapid requirements planning supports high-volume, rapid planning of component requirements for make-to-order/make-to-stock processes, enabling fast response to engineering changes and fully synchronized assembly planning and execution.
  
• Supply to line supports the just-in-time material supply to the assembly line, taking into account planned and actual stock situations and monitoring line-side stock synchronous to production. It also supports material flow and replenishment via KANBAN or a pull list.
  
• Manufacturing execution provides comprehensive order assembly management and tracking, with complete integration down to the assembly control level and full integration with financial control systems.
  
• Logistics execution synchronizes warehouse and transportation management systems into a single, integrated process.
  
• Inbound transportation planning and execution enables the planning of inbound transports from the OEM's suppliers, increases load rates for trucks, accelerates goods-receipt processes and increases process security and quality of information.
  
• Collaborative demand and supply planning allows OEMs to create joint plans with supply chain partners to guide their own business planning activities, providing partners with access to pertinent OEM production plans.
  
• Completely knocked-down assembly operations for plants importing parts for local assembly, meeting financial needs of the respective country of operations.
  

Automotive Suppliers

• Customer relationship management for suppliers through SAP Customer Relationship Management (SAP CRM) enables automotive suppliers to manage complex, business-to-business relationships with OEM and system-integrator customers, making a wealth of customer information available and reusable throughout an organization. By streamlining and automating quoting, bidding and contracting processes, SAP CRM reduces response times from weeks down to days or hours, enabling suppliers to be responsive to ever-increasing customer demands while removing waste, costly errors and rework from the process. Most importantly, key account management and opportunity management capabilities enable suppliers to take a strategic, lifetime-value approach to OEM and integrator customers, identifying critical, must-win business opportunities that support long-term customer profitability and satisfaction goals.
  
• Enterprise portal for suppliers simplifies the exchange of documents between a manufacturer and its suppliers, and gives suppliers access to information on manufacturers' systems. A standard Internet browser connects suppliers to their customer systems to track orders, deliveries and settlements, and to produce shipping notices. In this way, the Internet is a low-cost alternative or enhancement to the electronic document interchange (EDI) widely used in the automotive industry.
  
• Inventory Collaboration supports collaborative replenishment business processes between multiple business partners (supplier and customer). Through SAP Inventory Collaboration Hub, an easy to use, scalable, innovative Web-based collaboration tool built on the SAP NetWeaver technology platform, companies can implement out-of-the-box, standard replenishment processes - a critical component in improving inventory turns. Suppliers can communicate manually on the collaboration hub via a Web browser or mobile devices, or automatically, via Web services and XML. Companies can assemble suppliers into this managed environment that protects confidential data and helps ensure the sharing of up-to-date, accurate information, resulting in increased supply chain velocity and accuracy.
  
• Collaborative procurement takes into account all constraints, such as capacities and materials, to enable procurement, production and distribution planning across the entire supply chain.
  
• Collaborative engineering instantly notifies suppliers of design changes in parts and components.
  
• Sequenced just-in-time (JIT) calls enables companies to handle the logistics processes of just-in-time and just-in-sequence delivery of components for individual vehicles to the production line at the moment they are needed.
  
• Handling units and returnables management enables returns of an OEM's reusable packaging for transporting goods from its business partners. Special logistics functions track the movements of the returnable units, empty to the supplier and full to the OEM, and posts them to a returnable packaging account.
  
• Collaborative management of delivery schedules (CMDS) establishes communication between customer and supplier for tolerance check, feasibility check and confirmation of quantities and dates. This includes enhancement for the standard delivery schedules and release procedures and enables an optimized, stable process.
  
• Evaluated receipt settlement (ERS) fully automates the processing of incoming credit or payment advice notifications. It also checks differences in quantities and amounts, creates postings for financial accounts and reduces the maintenance overhead in manual invoice checking.
  

Sales and Service Organizations

• Vehicle configuration and pricing on the Web through a dealer portal on an OEM or importer system over the Internet is the fastest and most accurate method of configuring and pricing a vehicle for a customer.
  
• Vehicle search and location provides a database that stores millions of differently configured individual vehicles and can search for hundreds of dealers over wide areas.
  
• Due-date confirmation allows a company to confirm a delivery date when a vehicle matching a customer's order or a similar vehicle can be located. If no suitable product can be found in inventory, the vehicle can be ordered online and the delivery date confirmed.
  
• Service parts sales and distribution automatically identifies and tracks service parts and substitutions. SAP for Automotive also supports back-order processing of service parts; provides warehouse management that is tightly integrated with distribution and transportation; manages multisite distribution requirements and expedites the documentation necessary for export.
  
• Warranty processing enables dealers, importers, OEMs, and suppliers to manage and automate warranty claims processing for increased efficiency. They can process claims for several brands and multiple-warranty programs as well as track returned parts and recover costs seamlessly and automatically. Companies can combine warranty information with other compliance-related data for comprehensive analysis and defect reporting. And they can analyze campaigns, components, dealerships, and vehicles to drive strategies based on an understanding of factors such as parts failures, returned parts, fraud patterns, and participation levels for a given recall campaign.
  

Dealer Business Management
SAP for Automotive enables comprehensive management of all business processes for dealerships, whether independent, part of a dealer group, or OEM-owned. SAP integrates dealer-specific processes such as vehicle sales, vehicle service, service-parts management, marketing, and finance.

• New and used vehicle sales – SAP offers capabilities to minimize the administration, finance, and daily operation of vehicle sales by linking customer requests and vehicle orders with existing stock at the dealer, within the enterprise, and in the pipeline.
  
• Vehicle-service management – SAP gives dealers control over day-to-day operations such as appointment scheduling, work-order management, service reminders, service marketing and reporting, and service-cycle management.
  
• Parts and accessories sales – SAP optimizes inventory investment to support counter sales and repair and installation activities. The process is integrated with service, marketing, and finance. The dealer has complete control over the movement of both new and returned parts, as well as inventory and parts-procurement processes.
  
• Marketing – With SAP, companies can target new-business prospects while improving customer contact and retention. Capabilities include data management of prospects and customers, as well as automated follow-up for vehicle and service campaigns.
  
• Finance – SAP offers an integrated suite of ledgers that increases insight for more assured decision-making. It also provides integrated reporting, analysis, and compliance with business process and transaction systems, helping with business planning, forecasting, and cost and profitability management.
  

Technology of SAP for Automotive

SAP for Automotive leverages the capabilities of the SAP NetWeaver open integration and application platform to enable flexible business strategies, drive innovation into business processes and make change sustainable through contained cost and reduced risk. SAP NetWeaver enables SAP for Automotive to operate on an open, flexible, collaborative services architecture while providing information from different sources to users in a single interactive format. The platform supports SAP and non-SAP systems as well as common industry standards. By delivering preconfigured, industry-oriented business content, SAP NetWeaver solves companies challenges of integration and reduces the need for extensive custom implementations, making solutions such as SAP for Automotive simpler to implement, quicker to deploy, less expensive to own and more agile for future business growth and innovation.

Additional information about SAP for Automotive can be found at:

http://www.sap.com/industries/automotive/

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