Many automobile manufacturers outsource much of their core business – the development and production of automobiles – to suppliers and concentrate their own efforts on marketing and coordination. Because of this development, suppliers in the automobile industry are increasingly responsible for the quality of a brand and have a vital interest in making sure that their components cause as few defects as possible. This situation creates tremendous effort for coordination between manufacturers and the suppliers of individual systems. But coordination often occurs too late in the development process. An IT platform that networks information across all systems helps uncover possible weaknesses even at an early stage of development.
Manufacturers used to order an exact number of parts from suppliers; actual development work occurred at the manufacturer. Today, suppliers develop and produce complete components – usually near the manufacturer’s location. Suppliers deliver as needed, just in time, for manufacturing. To guarantee this ability, manufacturers must integrate their suppliers into the development process earlier and more tightly. One international, premium auto manufacturer (called “Automobile AG” here) faced just this task. EDI interfaces for orders existed between the manufacturer and its suppliers, but at the level of project work and risk management, communication occurred via e-mail.
Suppliers also profit from tight integration; it gives them important information for their long-term planning. What models sell particularly well, and which ones don’t sell as well? Will there be more or less demand for my components in the future? What does planning for the model cycle look like? Can components be used in the next generation of a vehicle so that I can save development and testing costs?
Integration of all supplier relationships
Automobile AG wanted to pave the way for collaboration in the development of components by integrating all supplier relationships into a common system architecture. Suppliers would be responsible for quality assurance and issue management based upon joint market research and evaluation.
After a preliminary study, Automobile AG decided upon SAP NetWeaver as the implementation platform for its new system architecture. The main reasons for the decision included good integration with its existing ERP solution (SAP R/3 4.6C) and mySAP Customer Relationship Management (mySAP CRM), broad use of the SAP solution by suppliers, and the economical option to integrate dealers into the world of SAP solutions with SAP Business One, the SAP solution for midsize companies. For the current project, Automobile AG used components of the SAP NetWeaver platform –SAP NetWeaver Application Server (SAP NetWeaver AS) and SAP NetWeaver Portal – and the technology of the SAP xApps portfolio of composite applications. The knowledge management capabilities of SAP NetWeaver Portal serve as a common information platform that grants all those involved in a process access to the required documents. Preconfigured business packages from SAP NetWeaver Business Intelligence (SAP NetWeaver BI) shorten development times and cut costs. In the midterm, the company plans to integrate all its development partners with SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI), because it’s more economical than the individual solutions previously in use.
Development platform for joint projects
Suppliers are often divided into two groups. The first group, system suppliers (also called tier 1 suppliers), are tightly integrated into a manufacturer’s processes. The second group (tier n suppliers), includes suppliers of simple parts and subcontractors. Automobile AG wanted to use a portal that supports cross-company collaboration to elevate the independent development work of suppliers to a new level. The portal will be gradually expanded into an issue management portal. The underlying system used by the manufacturer and tier 1 suppliers must enable all authorized personnel access to functional specifications, requirements, drawings, calculations, and test results – all the information on the status of development. In the case of joint processes, it must also enable interactions like the follow-up tasks required after diagnosis of a defect. All the departments involved should also be linked to simultaneous engineering: development, purchasing, trial and material testing, cost accounting, marketing and sales, quality assurance, production planning, job preparation, and finances.
And that applies to more than just tier 1 suppliers. All those involved in processes – right down to the smallest subcontractor – can now obtain up-to-date information on the most recent state of development at any time. Subcontractors with the most varied kinds of systems are linked via tier 1 suppliers. Automobile AG now has a view of all development steps – even when it has completely entrusted development to tier 1 suppliers.
Joint evaluation of defects
Up to now, Automobile AG handled all information on the evaluation of defects centrally and then distributed it. Distribution of the information depended upon the appraisal and decision of each dealer or developer. Requirements for product quality were usually present in unstructured form and stored in various locations. Many suggestions and defect notifications from customers were received by letter and e-mail; dealers provided their own statistics on defective parts.
The new portal lets the company collect all quality assurance information centrally and trace the status of a solution to a reported defect. Suppliers use the portal to determine how problems have developed with their components. They can see if the problems involve quality or construction defects, and they can determine how they have been corrected. The portal also helps them present suggested solutions independently. Because tier 1 suppliers often deliver the same components to several manufacturers, they can profit from the solutions to defects that have appeared at other locations. The portal this offers such suppliers a competitive advantage.
The collaboration function of SAP Enterprise Portal can be used to set up central issue management and support for knowledge management with SAP NetWeaver Portal. Suppliers, dealers, and customers can display a defect. Based upon the data collected in the portal, users can integrate a structured search with key figures from SAP NetWeaver BI – by comparing the concrete case numbers of a dealer with the reference values of the manufacturer, for example. Users can also receive information on the defects that occur most often and determine how they have been corrected. These kinds of reports enable Automobile AG to answer questions about the quality of its products as quickly as possible.
The portal can format all the issues reported on a supplier’s components which the supplier is contractually obligated to resolve. If a supplier determines that its own components or those of a subcontractor were delivered incorrectly, it triggers a defect report. This information is transferred to Automobile AG, which compares the information with the data in its production system to determine which types of vehicles have been affected. The company can quickly trace defects and avoid and recalls involved that harm its image. Dealers can use the same approach to report unusual problems. An issue database based upon SAP knowledge management capabilities offers them an option to search for similar defects.
It’s also vitally important for customers to be involved in the process of correcting defects – via a dealer, via a call center, or directly via the customer portal. A reported defect is given a unique number and assigned to a component. If the problem is new, the appropriate experts and decision makers are informed of the problem immediately. Customers can use the portal at any time to access the defects they have reported and to follow the status of a defect until it is resolved. Automobile AG can use special collaboration tools in SAP NetWeaver Portal to realize a variety of solutions that add a great deal of value to quality management. Ultimately, manufacturers can establish the coveted direct line to their customers.