Suppliers of automotive components and assemblies need to do more than just supply products at the right price if they want to stand out from their competitors. They also need to assume responsibility for procurement and logistics in their dealings with automobile manufacturers and to assume the role of a global partner. Eberspächer is therefore responsible for ensuring that parts for the exhaust gas technology are supplied to its contractual partners smoothly, on time and in an orderly sequence (just-in-sequence) – and to do so while maintaining minimum inventory levels. A specialist in exhaust gas technology, Eberspächer also controls the entire logistics and production processes for supplying these products to large automotive concerns such as DaimlerChrysler, BMW and Volkswagen.
Eberspächer must be able to respond flexibly to orders from automobile manufacturers. For example, it provides catalytic converters with precious-metal coatings in large numbers. It also supplies small quantities for the commercial vehicle sector and, as part of its product development work, also has its own prototype development facilities for spare-part procurement and customized production. These production operations, involving flexibility in the material flow from start to finish, are customer-focussed and require a new software package designed to deliver greater transparency.
Just-in-sequence delivery mapped in detail
“We need a just-in-sequence solution that is integrated into the procurement and logistics systems. With more than 1,000 requisitions from customers every day and more than 2,000 requisitions to suppliers every day, the new software must also be able to process high volumes of data quickly and reliably. We can handle both aspects very effectively with the SAP for Automotive solution”, explains Tobias Diepold, Head of the SAP Competence Center at Eberspächer. “SAP for Automotive includes all the functions needed for just-in-sequence delivery and is open for customized expansion”.
With the just-in-sequence process, manufacturers send sequence instructions to Eberspächer and thus ensure that the material will arrive at its destination in the required sequence and ready for installation when it is needed. The material flow is mapped using SAP’s just-in-sequence functions that intermesh directly with an assembly plant control system developed by Eberspächer. Using interfaces between SAP and the local system, scanner-based merchandise movements are recorded and the robots send instructions to SAP to map the production process directly. Emergency systems ensure that information cannot be lost, even in the event of a system failure.
Working closely with several automobile manufacturers, the credit note procedure for delivered products has now also been mapped effectively. In addition, Eberspächer utilizes most of the functions included in the SAP R/3 core system, such as materials planning, inventory management, production control for series and one-off production, and the graphics chart for sequence planning on bottleneck machines.
Consistent data through integrated systems
The objective of the project was to use standard software to replace the existing heterogeneous system landscape, consisting of SAP R/2 and applications developed in-house for logistics, stock management and on-site installation. The high degree of interfacing should be eliminated. It has not been possible in the past to reconcile data due to the fact that storage has been duplicated. This has meant that stocks in the logistics chain – e.g. stocks of critical parts such as catalytic converters – can only be identified with considerable effort. Planners had no access to the latest data about plants that they needed to control and monitor the processes effectively. This meant they did not have a sound information base in place for making fast, reliable decisions. Since the bookkeeping functions in SAP R/2 were not integrated with the logistics system, it was not possible to carry out effective controlling procedures.
Eberspächer opted for ORBIS AG as its consultancy partner and technology supplier. With its SAP for Automotive solutions, Eberspächer is particularly focussed on the automotive supply industry. “In addition to know-how, experience and flexibility in actual project work, we were won over by the proposed minimization of risk that this solution offered. The implementation was performed in several phases in order to maximize security while this process was ongoing. What we had to do was to switch other live operations to just-in-sequence delivery without interrupting production,” states Diepold, outlining the special challenge facing the company.
Before the project got underway, Eberspächer and ORBIS took part in a joint workshop in order to analyze and detail the requirements that future architecture would have to satisfy. ORBIS’ task was to adapt SAP for Automotive and the just-in-sequence workflow to Eberspächer’s requirements and to implement the solution in conjunction with SAP R/3. ORBIS also developed special add-on solutions and interfaces.
Logistics linked to ERP system
In the first phase ending in August 2000, Eberspächer worked together with ORBIS to switch SAP R/2 to SAP R/3 and implement SAP R/3 for aftersales, finance, controlling, asset management, maintenance and materials management. Production planning, the entire series production process and sales/dispatch management followed. A complex interface to the proprietary inventory management system was developed jointly with ORBIS in the project team. The logistics software developed in-house was retained for the time being.
The following phase, which extended up to August 2001, replaced the existing logistics software with SAP for Automotive and in doing so mapped the logistics for supplying OEM (Original Equipment Manufacturer) customers in SAP R/3.
Standard yet flexible
ORBIS’ task with the add-on solutions was to develop interfaces for printing out goods travelers, to requisition material from the fully automatic high-bay warehouse, and to generate transport assignments. The add-on solution developed by ORBIS for simulating transport processing – known as the loading list – relieves the workload of staff in the dispatch department. The relatively time-consuming process of changing packaging and quantity requirements can be accelerated quite significantly as a result.
The phase that ran till mid-2002 was focussed on stabilizing and optimizing the current system. Following this, Eberspächer began mapping production-accompanying processes in SAP, e.g. scheduled maintenance and quality management, in order to switch the international subsidiaries to SAP and to establish Controlling as a control unit.
“All in all, the greater integration depth of the business processes has resulted in greater transparency worldwide. This means our business processes are easier to manage and optimize and errors can be remedied faster”, says Diepold, explaining the key benefits. “This has taken us a big step closer to achieving our goal of establishing a globally integrated production network. Manufacturers expect suppliers such as us to have a standardized structure in order that they have a complete overview of the procurement and logistics processes at all times”.
The mammoth program is in place
Looking back, Eberspächer has put a streamlined program in place. The ERP software switchover has been accompanied by the Y2K and Euro changeovers and a new human resources solution from SAP. The investment has paid dividends – Eberspächer’s employees today have more information at their disposal and quickly came to grips with the new software. “The tremendous effort that has been made has resulted in greater flexibility for everyone and fewer errors in day to day operations. This ensures greater process reliability and, ultimately, increased customer satisfaction”, explains Tobias Diepold.
The introduction of SAP R/3 and SAP for Automotive in series production and commerce at various sites in Germany provides a platform for further rollouts in the USA, France and the Czech Republic. “SAP software can be scaled up easily in response to our planned global production network – a further reason why we chose SAP”, states Diepold.