Working with Component Suppliers

January 7, 2003 by admin

ORBIS Company Portrait

ORBIS Company Portrait

mySAP Automotive comprises numerous solutions tailored to the specific requirements of the automobile industry. The software provides an Internet-ready platform for construction, planning, supply chain management (SCM), sourcing, and customer relationship management (CRM). It aims at continuously informing suppliers about manufacturers’ and dealers’ needs and giving the latter a sense of the capacities of their suppliers. This approach creates transparency for coordinated logistics planning.
The industry solution provides individual processes and functions for automobile manufacturers and automotive suppliers, sales companies, and service companies. mySAP Automotive for the supplier industry offers a range of components to support communication between suppliers and manufacturers in the three classic logistics processes: ERP (enterprise resource planning), SCM (supply chain management) and JIT (just-in-time).
The ERP process examines classic business processes such as purchasing, sales, production, sourcing, and scheduling. The industry-specific automotive functions are developed upon this basis. The SCM process optimizes logistics between partners. With the help of SAP Advanced Planner & Optimizer (SAP APO), SAP Customer Relationship Management (SAP CRM) and SAP Supplier Relationship Management (SAP SRM), original equipment manufacturers transparently integrate their suppliers into the supply chain. If a supply failure is imminent, the OEM is informed at an early stage and can react accordingly. In turn, the JIT process links the material flow to the appropriate assembly control systems. The OEM transmits information to the supplier, so that the material arrives at its destination — pre-finished and in the proper sequence — exactly when needed. Emergency systems ensure that information is not lost during a system outage.

Workshops for Individual Customization

mySAP Automotive is a standard product. Consulting providers, like SAP partner ORBIS GmbH (headquartered in Saarbrücken, Germany), ensure that a company’s individual requirements are also considered. Adapting individual modules and special add-ons creates customized solutions. Individual customization is achieved by sizing. In workshops, the consultants join with customers to develop the company’s logistics and assembly processes at the operative, tactical, and strategic levels. Together, they determine which modules will be used. If the standard version does not meet the requirements of company-specific processes, the project team makes individual customizations. The key to success lies in detailed analysis. The objective is to take a critical look at existing structures and to realize what the customer actually needs.

Typical processes in the supplier industry include the integration of external service agents and logistics service providers, third-party business transactions, and consignment stock processing. Depending on coordination in the project, these processes must be set up during implementation. mySAP Automotive can easily map the role of the supplier and supraregional cooperation between production and assembly. In addition, the solution’s SCM Manager provides a monitoring instrument for central tracking of warehouse inventory, goods received, and shipping.
Until now, many companies have implemented predominantly isolated applications optimized either for shipping or warehousing. However these applications don’t transparently map the entire process. As one example, consider ZF Getriebewerke Brandenburg, a company that complained of having individual systems without a uniform objective. This problem was remedied by the SAP industry solution, which was introduced in several small steps. After three years, ZF achieved transparency in scheduling and nationwide inventory. Situations in which parts were unavailable due to incorrect scheduling have been reduced by 90%. Since switching to mySAP Automotive, the company now works faster, with fewer errors, and can reduce inventory – thus saving warehousing costs. The Brandenburg project was so successful that company management used the result as an opportunity to introduce the solution at other ZF plants.

Going Beyond the Standard

For some companies, however, standard templates for planning and control are insufficient. Using only the standard functions, for example, companies with repetitive manufacturing cannot map cumulative quantities in production, or prevent overruns of series. Moreover, some standards do not permit planning shipments if no delivery has been generated. This is where add-ons are needed to extend the software’s capabilities. However, experts warn against ready-to-run solutions with completely pre-set process flows. “We know from experience that these types of solutions don’t work in practice,” explained Peter Lauer, director of consulting at the automotive business unit of ORBIS GmbH. “Consultants, departments, and internal IT must work closely to develop and implement the processes and the way they are mapped. At most, a ready-to-run solution can serve as a catalyst,” Lauer continued. ORBIS works closely with SAP in the area of add-ons, so that some solutions grow into the SAP standard and are included in future releases. This collaboration provides the customer with added investment security.
When the SAP core is introduced — without mySAP Automotive — 50% of supplier processes will work without individual customization. In the past, the remaining 50% were adapted to customer requirements during the course of the project. Today, pre-set example business processes, SAP Best Practices, assist with this process and have led to a 20% reduction of customization of the standard functions and add-ons performed by project teams during the course of the project. The Best Practices business processes have grown out of practical experience and simplify time-consuming coordination processes. This means that the software can be implemented more quickly and confidently, which in turn increases the ROI.

Seamless Integration

After development of a company-specific solution, the consulting company takes over the technical and organizational integration of the software. The goal is to create a consistent technology platform for the EAI (enterprise application integration) architecture, which serves to combine the different technical and logical infrastructures so that the data of business processes can be substituted at any time. The advantage of the SAP solution is that the software has internal interfaces but no technical restrictions. For instance, if a supplier and manufacturer use different ERP systems and different material numbers internally, the systems would normally be unable to communicate with one another. With SAP, companies have the ability to overcome these roadblocks.

Opportunities and Limits

One advantage of mySAP Automotive is its flexibility. Without requiring significant programming or investment, the program can map the three core processes: ERP, SCM, and JIT. For example, mySAP Automotive handles the transition from weekly processing to JIT delivery without the company needing to make additional investments in its IT infrastructure. Flexibility also means that automotive component suppliers can follow their customers to new and more distant markets. mySAP Automotive also covers additional requirements, such as a multilingual environment. Furthermore, the solution has proven itself in practice. When the supplier expands, the application grows along with the company. Specific add-ons provide small businesses with a flexible application that optimizes their logistics and meets company-specific requirements. And because mySAP Automotive is completely integrated into the standard version of mySAP.com, it also includes all business models, such as corporate group consolidation, standard costing, methods for cost object controlling and cost accounting across profit centers.

Udo Bungert

Udo Bungert

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