Efficient Supply Chains with e-SCM for Automotive

The challenge for mid-size suppliers to the automotive industry lies in guaranteeing adherence to delivery deadlines while avoiding the need for capital-intensive storage. “It is also necessary to remember”, says Detlef Mehlmann, Managing Director of SAP Business Partner BSI Unternehmensberatung GmbH, “that companies must adopt flexible production processes in order to make efficient use of their injection molding machines and their foaming and laminating equipment.” Suppliers can only achieve flexibility, quality and reliability if they map all business processes from goods inward to shipment in a supply chain management (SCM) solution, continues Detlef Mehlmann.

Organizing relationships

Small and mid-size suppliers to the automotive industry have to maintain a network of business relationships with suppliers, customers and forwarding agents. It is vital to retain an overview. The key requirements of the suppliers must thus be outlined in the software used. “An SCM solution must be flexible, compatible with third party applications and inexpensive”, states Mehlmann when describing the product profile. According to the Hilden-based consultants, the qualified mySAP All-in-One solution “e-SCM for automotive” is precisely tailored to meet these demands. “Our pre-configured solution is specifically designed for small and mid-size suppliers to the automotive industry that have not yet used an IT solution or have a heterogeneous IT environment”, says Dieter Raspe, Consultancy Manager at BSI, when describing the target group. In its smallest form, the solution is available for only two users. The consultancy firm views its product as an “entry-level package” which can “grow” with the company.
“Although e-SCM for automotive is a pre-configured solution, it contains the whole range of features of mySAP Business Suite”, adds Jörn Flüshöh, Product Manager at BSI. Companies which buy the solution can start with the entry-level version and activate additional functions and processes such as a quality management system at a later point in time.

Integrating business processes

According to BSI, “e-SCM for automotive” is based on the current SAP Release 4.6C and contains all the business processes necessary for financial accounting, cost unit accounting, purchases and sales. The key feature of the solution is that it gathers together all the production requirements at a single interface (Excel table) and processes them in a time matrix while taking existing stock levels into consideration.
In addition to the traditional ordering process via letter, fax or e-mail, all authorized suppliers can use EDI (Electronic Data Interchange) via the Internet to call up the orders that relate to them, confirm the delivery date or even advise of deliveries. In conjunction with a consolidated database, the SCM solution forms an efficient basis for all business processes. Detlef Mehlmann uses a concrete example to explain what this means. “As soon as there is demand in the system, a reconciliation is performed with a corresponding parts list stored in the company software”, explains Mehlmann. Any parts that are out of stock are displayed and can be ordered from suppliers.

SCM solution at a fixed price

“Anyone who thinks that e-SCM for automotive is an expensive business is wrong”, adds Consultancy Manager Dieter Raspe. “We are offering the solution at a fixed price of Euro 99,000 for hardware and software including consultancy fees”, he explains. According to BSI, a range of service and support features are also included in the fixed price. In the introductory phase of the solution, the package includes essential customer-specific settings relating to e.g. cost units, banking details, payment conditions and training of end users at their workstations. Customers can call on “going live” support whenever required, for example, in the initial days of operation or during the first monthly accounting process. According to BSI, this comprehensive package enables operational launch to take place between six and eight weeks after placing the order. The hardware requirements are also not excessive. Using a free SAP database, 1 CPU, 7 hard drives (4 x 18 GB and 3 x 36 GB) for Raid 5 and 2 GB RAM are sufficient for up to 10 users. The English version of Windows 2000 is installed as the operating system. According to BSI, the price of the hardware is around Euro 8000 or even less.
In addition to the fixed price model, the SAP Business Partner also offers the solution, which can now run under SAP R/3 4.7, in two other versions – as a leasing model or as an ASP model. The leasing model includes all components such as hardware, software licenses and launch costs. The BSI consultants estimate the monthly cost of the leasing option to be under Euro 4000 for a system with ten users. With the ASP option, a single workstation license for the mySAP All-in-One solution costs Euro 350 per user a month. “e-SCM for automotive is not only precisely tailored to the requirements of small and mid-size suppliers to the automotive industry, we also sell the solution in truly inexpensive price models”, concludes Detlef Mehlmann.

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Dr. Andreas Schaffry
Dr. Andreas Schaffry