Making the most of digital procurement to deliver
next generation automotive solutions
Automotive:With Change Accelerating, Procurement Must Stay Ahead
The automotive industry has been facing unprecedented changes. There have been fundamental shifts in customer demand coupled with rapid technological advances and innovations. Add in new market entrants, and automotive manufacturers are now searching for opportunities that will give them a competitive edge.
Autonomous vehicles, electric cars, mobility as a service, and hyperconnected consumption are just some of the cutting-edge innovations that will help achieve this competitiveness. Ever-increasing complexity and choice across the supply chain will necessitate highly efficient, integrated, and future-proof product sourcing and procurement to make them a cost-effective reality.
The Key Trends Driving Automotive
Delivering digital experiences
From the sales process to the driving experience and aftercare, digital must be built into every interaction.
Satisfying new ownership models and preferences
Mobility as a service will give consumers choice, from subscriptions to on-demand access.
Ensuring sustainable choices
This involves more than electric vehicles. It means building in sustainability throughout the supply chain and the credentials to prove it.
Of organizations experience low adoption of new procurement1
Of supply chain leaders say their organization regularly collaborates with direct materials suppliers on product development2
Of supply chain leaders say low adoption of new processes and technologies within procurement is a barrier to digital transformation3
Four Key Focus Areas
Supplier and Risk Management, Sourcing, and Contract
Reduce exposure across the automotive supply chain by managing supply chain risk and rising material costs, securing alternate sources of supply, and monitoring supplier performance and product quality.
Planning and Forecasting
Ensure that procurement is agile, flexible, and constantly improving by increasing supply chain visibility, balancing supply and demand, and understanding supplier capacity.
Buying and Delivering
Boost efficiency across the entire buying and delivery process by automating indirect procurement processes, managing the external workforce, and optimizing inventory.
Invoice and Paying
Improve invoicing efficiency and optimize cash flow to ensure the business pays and gets paid the right amounts at the right time.
Key Business Outcomes
In a highly inflationary operating environment with heightened geopolitical risk, it is vital to ensure an adequate supply of materials to support production needs.
- Accurate, real-time visibility into supply chain constraints
- Cost transparency to control costs of purchased materials
- Reduced exposure to sole sourced parts
- Increased supply chain resiliency, with new sourcing strategies to ensure alternate sources of supply
- Management of supplier performance and compliance
With fast-changing events able to affect the supply chain in days, accurate and agile forecasting and planning will help ensure that production is adjusted to maintain efficiency. Integrated, transparent, and real-time data collection and analysis give your business:
- Better visibility into supplier’s ability to deliver on time despite disruption at ports of entry
- Better balance of supply and demand, ensuring resilient planning and management of supply chain mismatches
- An agile and flexible supply network with better visibility empowering improved supplier capacity
Leverage digital transformation to gain better visibility, control, compliance, and collaboration across all spend-related processes, from procurement to personnel and inventory.
- Reduce manual and inefficient indirect procurement processes and drive more compliance across all buying channels.
- Improve visibility of the external workforce and better manage and control related services spend.
- Reduce supplier delivery variability to drive lower safety stocks.
- Deploy inventory processes for MRO spare parts, such as vendor-managed inventory and consignment, to improve working capital efficiency.
Maintain margins and increase profitability in times of high inflation by driving more efficient invoicing and optimizing cash flow management and planning.
- Reduce manual paper-based accounts payable invoice processes and automate invoice workflow exception handling.
- Make sure suppliers have sufficient working capital by offering supply chain financing and dynamic discounting.
- Accurately predict cash flow over extended periods to facilitate better decision-making and planning.
- Create plans to access liquidity from within your supply chain.
- Offer an expanded choice of payment methods and follow up on invoices quickly.
- Convert short-term debt to long-term debt, eliminate unnecessary expenses, and renegotiate supplier terms to minimize cash outflow.
Procurement Software and Solutions From SAP
Automobiles are manufactured each day by SAP customers4
Automobiles companies in 106 countries innovate with SAP solutions5
Of the top 100 automotive OEM suppliers in the world run SAP solutions6
automotive infotainment suppliers in the world run SAP solutions7
most innovative automotive companies in the world run SAP solutions8
automotive franchises in the world run SAP solutions9
Learn more about how SAP procurement software and solutions can help you
- “The Imperative for Procurement Digital Transformation for Automotive,” SAP in collaboration with Oxford Economics, 2021.
- “Close Collaboration That Goes Beyond Transactions: Direct Spend Leaders Engage with Essential Suppliers to Improve Performance,” agile procurement insights research, SAP SE in collaboration with Oxford Economics, 2021.
- SAP Point of View: Public | The Intelligent Automotive Business |The Future of Procurement | SAP Internal Data