“Our supply chain must have the ability to respond instantly to our customers’ needs,” explains Christian Stanisch, Manager OE-Logistics for the tyre maker YOKOHAMA Europe. That’s because car manufacturers, whose thin margins have led them to adopt lean, just-in-time manufacturing techniques, look to their suppliers to help them build a car in just 18 to 20 hours. A car’s 10,000 parts must be delivered – sometimes as often as three times a day – to plant assembly lines where they will be put together to create a product worth many times more than their individual value. Suppliers like YOKOHAMA play a vital role in supporting these complex supply chains.
Second, tyre retailers, the main sales channel for the world’s lucrative tyre replacement market, offer consumers a wide selection of brand names at every-day low prices. Faced with the high overhead costs of traditional brick and mortar stores, retailers favour reliable suppliers with products that pull customers into showrooms; and with processes that keep shelves well stocked.
Although there’s fierce competition, the YOKOHAMA RUBBER Co., Ltd has been a global producer and distributor of premium tyres for more than 90 years. Nevertheless, as a key player in a mature, global commodity industry, the tyre maker faces frequent price wars and thin margins. As a result, YOKOHAMA seeks to differentiate itself from its competition, both through product innovation and more efficient business processes, enabled by IT.
YOKOHAMA tyres roll beneath some of the biggest names in the car business, including Porsche, Daimler-Chrysler, Audi, Aston Martin, Lotus and Bentley. These OEM customers look to experienced first-tier suppliers like YOKOHAMA to help them achieve faster innovation, shorter product cycles and greater cost savings. For YOKOHAMA, the ability to deeply collaborate with these customers is crucial in building customer relationships and creating new business opportunities.
Achieving the necessary IT integration, however, proved to be difficult – if not impossible – with YOKOHAMA’s previous IT landscape. The tyre maker’s OEM customers use a variety of different software platforms, many of which were incompatible with its own home-grown solutions. To manage orders in the past, for example, YOKOHAMA employees had to manually download order information, reformat it, and then upload it into the company’s various business applications. This resulted in both lost time and data entry errors, as well as serious data bottlenecks. And it meant that managers could not rely on the system to confirm shipment deliveries.
YOKOHAMA faced similar challenges in its tyre replacement business. The tyre maker has traditionally sold to retail consumers through large store chains, many of whom require suppliers to follow specific order, delivery and invoicing procedures. Like their OEM counterparts, these large retailers have sophisticated ERP and supply chain management solutions based on different software standards. Here, too, YOKOHAMA’s old systems made compliance difficult.
After considering solutions from several different IT service providers, the tyre maker chose it.automotive supplier, the automotive industry solution from itelligence based on SAP All-in-One. The solution, which offers small and mediums size businesses the functionality found in SAP ERP 6.0 and SAP CRM, was implemented in 2006 in less than 90 days. As a result, today YOKOHAMA is integrating its business processes and supply chain with its manufacturing and retail customers.
With SAP All-in-One, YOKOHAMA is experiencing enhanced and streamlined stock planning, improved responsiveness to customer demands, better advanced planning and faster response times to new opportunities. The solution, which is built on the service-oriented architecture of the SAP NetWeaver platform, allows YOKOHAMA to integrate its SAP and non-SAP software. As a result, data is free to flow across the company’s older in-house applications and can be readily shared with its customers.
For OEM customers, YOKOHAMA’s supply chain has become much more transparent. From pre-production orders to electronic data interchange (EDI) sales orders, production planning and control, YOKOHAMA is now able to more closely align its business processes. Because the it.automotive solution recognizes all of the common EDI standards, for example, things like purchase orders, part specifications and design changes can now flow seamlessly between YOKOHAMA and its OEM customers. As a result, YOKOHAMA is better able to deepen its level of integration and collaboration with them.
YOKOHAMA’s retail business has reaped similar benefits. The solution is helping the company build stable IT interfaces with its customers, for example, to ensure that its products are never out of stock. Ordering processes have also been greatly streamlined. And for the tyre maker’s small and medium sized customers, many of whom lack full-scale enterprise ERP systems, YOKOHAMA is planning a new Internet sales channel portal. The SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI), a built-in component of SAP All-in-One, will allow YOKOHAMA to take full advantage of the same powerful Internet interfaces used by larger companies. And because the it.automotive solution is inherently scalable, it will also be able to handle higher sales volumes.
Down the road
YOKOHAMA expects its OEM and retail businesses to achieve strong growth over the coming decade. To do so, the company plans to pursue its vision of being the brand of choice in high-quality, high-performance tyres. With fierce competition and fluctuating raw material prices, however, YOKOHAMA will continue to seek business processes that help the company remain flexible and adaptable in the future. With the it.automotive solution, YOKOHAMA believes that it is well-positioned to tackle these challenges head-on. “No one knows what our industry will look like in 10 years,” says Stanisch. But with our new IT solution, we know we’ll have the resources to stay in the fast lane.”