The SAP Value Proposition for Automotive Enterprises[1]

Shifting Gears with SAP Automotive

Russell Graham - SAP CanadaSAP Business ForumOctober 9th 2003

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 2

OEMSales,

Service & Distribution

Suppliers

Canadian / Global

Auto Industry

CUSTOMER SERVICE

ADAPTABILITY

TCO$


Agenda

SAP Automotive focus

Industry Challenges

Shifting Gears Adaptability

Customer Service Total Cost of Ownership

Final Assembly


SAP and the Automotive Industry

IS-Automotive Industry Solution

$300M in R&D over the next 5 years

Variant Demand Management Resource Planning Supplier Information Cockpit

Strategic Purchasing

Operative Procurement

InboundLogistics

InventoryManagement Billing Vendor

Performance

Strategic EnterpriseManagement

Business Intelligence & Data Warehousing

Managerial Accounting

FinancialAccounting

Enterprise Management

Customer RelationshipManagement

Engineering Supplier

Supply Chain Planning & Monitoring Supplier

Procurement Supplier

Manufacturing Supplier

Sales Supplier

Spare Parts Business Supplier

Business Support

EngineeringProjects

ProductEngineering

Process Engineering

TargetCosting

Product DataManagement

DemandManagement Sales & Delivery Backorders Supply Network Warranty

Human ResourceManagement Procurement Treasury Fixed Asset

Management

Supply to Line Manufacturing Execution

Quality Management

Manufacturing Confirmation & Monitoring

CustomerService

Market Research & Analysis

Product/ Brand Marketing Sales

Management

Sales CycleManagement

SalesChannels

Sales Planning Sales Execution Billing WarrantySupplierSupplier

Enterprise Management

Customer Relationship Management

Vehicle Business

Technical Services/Workshop Management

Spare Parts

Financial/Rental/Insurance Services

Warranty & Claims Management

Business Support


Business Intelligence & Data Warehousing


FinancialAccounting

DealerBenchmarking

Sales Management

Sales Cycle Management

SalesChannels

Dealer-Independent Vehicle Mgmt

ServiceAgreements

ServiceFulfillment

CustomerService

Vehicle Procurement

Configuration & Pricing

VehicleAllocation

New & Used Car Sale

Vehicle Distribution & Transportation

InvoicingVehiclePlanning

Contact/CallManagement

Repair, Maintenance, Inspection

Service Campaigns, Recall Management Workshop Efficiency

Demand Management Sales & Delivery Backorders Supply Network

Finance/Leasing Insurance Rental Business

Claims Claim Submission Approval & Reimbursement Inverse

Logistics

Human Resource Management Procurement Treasury Fixed Asset

Management

O.E.M.O.E.M.

Sales Planning Direct Sales Sales Execution VehicleDistribution Billing After-Sales

Tracking

Strategic Purchasing

Operative Procurement

InboundLogistics

InventoryManagement Billing Vendor

Performance

Product/ Brand

Marketing

Marketing Program

ManagementSales

Management

Sales CycleManagement

SalesChannels

Installation Management

Market Research &

Analysis


Business Intelligence & Data W arehousing


FinancialAccounting

Enterprise Managem ent

Custom er RelationshipManagem ent

Engineering OEM

Supply Chain Planning &Monitoring OEM

Procurement OEM

Manufacturing OEM

Sales OEM

Completely Knocked-Down Kits (CKD)

Business Support

Engineering Projects

Product Engineering

Process Engineering

Target Costing

Product DataManagement

Planning Packing & Shipping Kit Management Assembly ManufacturingConfirmation &

Monitoring

Human ResourceManagement Procurement Treasury Fixed Asset Management

Variant DemandManagement

ResourcePlanning

Order Scheduling & Sequencing

DistributionPlanning

Supply Chain Monitoring

Supply to Line Manufacturing Execution

Quality Management

Manufacturing Confirmation & Monitoring

Sales & Sales &

ServiceService


Industry-centric functionality > 1,200 Automotive Customers

Integrated Product & Process EngineeringModel-Mix-Planning, SequencingHigh Volume Backflush

OEM Solution

Supplier Solution Returnable packaging

Self billingSequenced JIT Calls

Sales & Service SolutionVehicle Management SystemService Parts Sales and DistributionWarranty Management


Agenda


Industry Challenges



Final Assembly


Product & Process Innovation Drives Profit & Partnerships

Industry Differentiator

CostCost QualityQuality ResponsivenessResponsiveness Scale/ScopeScale/Scope INNOVATION

1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006

Anti-Lock Brake SystemsElectric Cars

Integrated Systems

Internet Accessibility

Side Impact AirbagsDirect Injection (Gasoline)

Alternative FuelsVoice Recognition

42V System,Field Of Vision

Others..

ADAPTABILITY

Unleaded GasAirbags

Emissions ControlClimate ControlRear Seat Belt


Japanese OEMs are the Suppliers’ “Growth Market”

Source: Roland Berger

CUSTOMER SERVICE


TCO$Cost Reduction is Key!


Agenda


Industry Challenges



Final Assembly


ADAPTABILITY


Two levels of Adaptability

Macro• Respond to changing requirements

Shared servicesLegislationCustomer Expectations

Sarbanes OxleyTREAD ACT,

Recycling

Financial IT

Market Analysis by

Model

EDI 861,

862, 864 …


Two levels of Adaptability

Micro• Responsiveness to demand fluctuations

WIPDemand

Time

OEM Tier 1 Tier 2,3


Inventory Collaboration Hub


CUSTOMER SERVICE


A customer & vehicle centric solution

Vehicle Sales& DistributionManagement

Vehicle MarketPlanning

Vehicle Financials

After-SaleManagement

Customer &Vehicle

RelationshipManagement

Customer &Vehicle

RelationshipManagement

WarrantyManagement

&Reporting

After SaleFollow-Up

Vehicle Sales&

Leasing

Vehicle Importation,Distribution,

Upfitting

Vehicle Forecasting &Planning

Vehicle Marketing

Lead /Opportunity

1

2 3

4

5

6

7

8

Vehicle Billing


Audi Customer Care

Life cycle management for customers and motor vehicles

AdvantagesIncreased customer retentionUnderstanding customer needsIntegration of automobile salesand financial servicesTransparency and service quality

“Regardless of how our customers reach us, our internal processes run entirely electronically.”

Christoph WargitschManager CRM at AUDI


TOTAL COST OF OWNERSHIP$





Federal-Mogul Corporation

Woodward Avenue in Detroit, Michigan

Year Founded : 1899

Annual Revenues : $6.0 billion

Employees : 49,000

Locations : 150

Global Presence : 24 Countries

Markets Served : OEM and Aftermarket

Product Lines : Bearings, Pistons, Transmission products,Sealing Systems, Frictionproducts, lighting products


Our Solution

Consolidate 75 MRP systems to SAP R/3 to enable common process utilizing a Pre-Defined Federal Mogul Template

Establish common business processes facilitate intra-company transactions & personnel utilization & effectiveness

Establish Common data models (customers, vendors, materials) to enable:

Global Analytics Demand Aggregation, Global Sourcing,Engineering re-use, Quote process,Decision Support

Cost ReductionVisibility Standardization

Common Training, Call Center and User Support instead of multiple

Repeatable “fixed Fee” implementation approach

Supports aggressive M&A&D activity

Reduces costs to trading partners

Our solution was built upon the concept that standardization would yield visibilityand together, would be the catalyst to reduce costs

SAP Automotive SupplierBest Practice

SAP Automotive SupplierBest Practice

SAP 4.6c Pre-Configured Client

(PCC)

SAP 4.6c Pre-Configured Client

(PCC)

SAP Auto Industry

Solution 3.0

SAP Auto Industry

Solution 3.0

SAP Best Business Practices for

Automotive 3.0

SAP Best Business Practices for

Automotive 3.0

Automotive Industry ExperienceAutomotive Industry Experience

ValueSAP - ASAP Implementation

Methodology

ValueSAP - ASAP Implementation

Methodology


Agenda


Industry Challenges



Final Assembly


Shifting gears with SAP Automotive

ADAPTABILITY

CUSTOMER SERVICE

$ TCO


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Documents

The SAP Value Proposition for Automotive Enterprises[1]