Supplier Uses Paperless Order Process

The international company Automotive Lighting, headquartered in Reutlingen with 8,200 employees in 22 branches worldwide, makes headlights, turn signal lights and tail lights for almost all the major automotive brands. To give a distinctive face to the vehicle with unmistakable ‘eyes’, approximately five percent of staff work in R&D. They continually bring out new products that combine technological progress with performance and design.
For many years Automotive Lighting has also been a key supplier to the Mercedes Benz Technology Center (MTC) in Sindelfingen, where 9,000 developers are developing the Mercedes-Benz generations of the future. The MTC Center requests its suppliers to provide samples by fixed dates with a view to developing new car models. This results in Automotive Lighting receiving around 20 ‘individual orders’ each week. Numerous order and deadline changes are an everyday occurrence for the lighting specialist.

Orders in electronic form

Until the end of 2004, the Sindelfinger development center’s sent orders to its suppliers on paper. Processing the order data was laborious and, above all, prone to errors. “Given the amount of orders and alterations, an order was sometimes not processed in time or an e-mail not forwarded because the member of staff was on vacation”, says Eberhard Spahlinger, Automotive Lighting’s head of IT, looking back.
This prompted the Swabian automotive manufacturer to take action last year. To simplify and largely automate its order process with all its suppliers, DaimlerChrysler launched electronic ordering (BeFo). The aim for the Mercedes-Benz Technology Center (MTC) is to send all orders to suppliers in electronic form by a remote data link or Internet portal. With electronic data interchange (EDI), significantly more project-specific data can be taken into account when processing samples – such as the vehicle number or the FINAS number, an identification number assigned by Daimler Chrysler AG to individual parts – thus resulting in fewer errors.
BeFo, the solution offered by DaimlerChrysler, specifies procedures and organizational rules for executing MTC orders. Orders and any changes affecting them are communicated by special accompanying documents designed specifically for the BeFo process. The supplier then has to confirm delivery to the customer via EDI. Orders are no longer sent on paper.

Suppliers need to adapt

Automotive Lighting found its procedures were no longer efficient enough to deal with the high number of orders and to process these manually via the Internet portal. So the company felt it necessary to look around for an automated solution. “We live from customer orders and can’t afford to lose even one or miss a deadline because of delay in data input,” says Eberhard Spahlinger, pinpointing the problem. The challenge facing suppliers is that they now need to exchange data with the Mercedes-Benz Technology Center via the MTC portal or EDI. Although Automotive Lighting used the industry solution SAP for Automotive, which supports cross-company data exchange, it required an add-on specially tailored to MTC’s needs. The head of IT found the solution at BTC AG, headquartered in Oldenburg. Spahlinger adds: “BTC AG had already proved itself in similar projects. We soon agreed on devising a joint solution.”
The project started in October 2004 and within just three months the team came up with a solution that could be mapped in SAP 4.6 c without modification. Arno Holzwarth, development team coordinator at BTC, explains: “Automotive Lighting feels the SAP add-on BTC BeFo ensures complete integration of the DaimlerChrysler BeFo process in the industry-specific processes of the SAP for Automotive industry solution.”

Transparent order process

The order process today is more transparent and reliable. First, the order is created at MTC in SAP. After electronic approval the order data is sent to the supplier in electronic form via remote data transfer or EDI (EDIFACT format). The supplier Automotive Lighting now processes the order data in its SAP ERP system. “It’s definitely a challenge to map so many different items of data, such as quantity, material or deadlines, via the IDoc in one order,” explains Jürgen Sonnen, senior developer at BTC. The IDoc interface (Immediate Document) is an SAP format for transferring business correspondence. Every order or amendment is automatically given a plausibility check and validated before being confirmed by Automotive Lighting. The system also checks if an earlier order or any amendments have already been confirmed.
Confirmation is highly important for both contractual partners as it shows the current position regarding quantity, price and deadline. As the original order in SAP R/3 is always overwritten if there is a change, leaving it impossible to follow what changes have been made, the Automotive Lighting employee first has to confirm the original order from MTC and then, in chronological order, each subsequent change on the cockpit. If he mistakenly clicks first on the change, integration is interrupted and a message appears warning that the order has not been confirmed yet. Here, BTC provides a clear overview of things: When orders and changes are received, they are grouped together with the corresponding order numbers and ordered chronologically in different colors.
The ‘BTC EDI Cockpit ORDERS’ is the central terminal for monitoring orders, order changes and their current IDoc processing status. Order confirmation is generated either automatically through the message control system or manually. Order confirmation checks and consultations of appropriate IDocs are also made via the cockpit.
Shipping documents and data are generated in Automotive Lighting’s SAP ERP system in accordance with the MTC specification and not manually in the ‘delivery note capture’ Internet application customized for MTC. The supplier’s ERP system sends the delivery note in digital form. In turn, the electronic delivery note is automatically checked by the customer’s goods inward system and saved. Invoices can also be sent digitally.
“Automation has substantially reduced outlay,” says Spahlinger, summarizing the impact of the new solution. “This means we save around two man-days per month.” This may also encourage other suppliers to fully automate the order process all the way from the customer to the supplier’s system. Arno Holzwarth emphasizes that: “The growing use of electronic procurement processes means MTC suppliers and suppliers in other sectors are all faced with the problem of integrating these new processes in their ERP systems.” BTC’s add-on offers a solution that avoids modifying the SAP configuration and can be adapted to the needs of other sectors and document types (credit and delivery notes, etc.) without much effort.

Arno Holzwarth
Arno Holzwarth