Delivering Real-Time Business Value for Automotive

July 2013

Delivering Real-Time Business Value

for Automotive SAP Business Suite Powered by SAP HANA

Public

© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2 Public

The real-time opportunity

Customer individualization, new mobile trends, new technology

developments, and increasing regulatory requirements

necessitate faster reaction times from automotive companies

and lead to products with more and more variations, higher

technical complexity, and larger data volume. This leads in turn

to greater operational risk that must be managed.

Follow new customer behaviors and trends

Manage overcapacities

Move to emerging markets


Becoming an innovation-driven enterprise Align business operations with customer needs

Drive profitable

growth with flexible

sales and revenue

models

Advanced prediction

Customer-specific promotions

Increased market share

Bring enticing and

relevant products

to market rapidly

Increased manufacturing efficiency

Reduced cost of operations

Simplified planning of maintenance activities

Respond to market

dynamics in real

time

Faster reaction to changes

Optimized inventory levels

Minimized out-of-stocks


SAP Business Suite powered by SAP HANA The next-generation business platform

Real-time business

In-memory

Business

transactions

Digital

connections

Collaborative

business

Cloud Social

Big Data Mobile

One platform bringing it all together

Advanced

analytics


Back

Industry value map for automotive The innovation-driven enterprise

Technology

Solutions

Marketing, Sales and

Aftermarket

Dealer Business Management

Vehicle Sales Management

Customer Service, Support,

and Warranty Management

Application Develop-

ment and Integration

SAP HANA Platform

Collaborative Product

Innovation

Continuous Product and

Service Innovation

Integrated Product Development

for Discrete Industries

Embedded Product

Compliance

Manufacturing and Logistics

Operational Procurement and

Inbound Logistics for Direct

Material

Lean Manufacturing

Make to Order

Outbound Logistics

Responsive Supply Networks

Service Parts Management

Transportation Management

Supply Chain Execution

People and

Talent Core Human Resources

and Payroll Talent Management

Time and Attendance

Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management

Strategic Sourcing and

Contracting

Procurement and Order

Collaboration

Collaborative Invoice

to Pay Commodity Management

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and Project

Management IT Service Management

IT Strategy and

Governance

Multichannel Marketing

Management

Enterprise Mobility Consumer

Experience Data Management Analytics

3D Business

Visualization


Back

Industry value map for automotive Real-time value for key end-to-end processes

Technology

Solutions

Marketing, Sales and

Aftermarket

Dealer Business Management

Vehicle Sales Management

Customer Service, Support,

and Warranty Management

Application Develop-

ment and Integration

SAP HANA Platform

Collaborative Product

Innovation

Continuous Product and

Service Innovation

Integrated Product Development

for Discrete Industries

Embedded Product

Compliance

Manufacturing and Logistics

Operational Procurement and

Inbound Logistics for Direct Material

Lean Manufacturing

Make to Order*

Outbound Logistics

Responsive Supply Networks

Service Parts Management

Transportation Management

Supply Chain Execution

People and

Talent Core Human Resources

and Payroll Talent Management

Time and Attendance

Management

Workforce Planning and

Analytics

Finance Financial Performance

Management

Accounting and

Financial Close

Treasury and Financial

Risk Management

Collaborative Finance

Operations

Enterprise Risk and

Compliance Management

Procurement Supplier Discovery and

Lifecycle Management

Strategic Sourcing and

Contracting

Procurement and Order

Collaboration

Collaborative Invoice

to Pay Commodity Management

IT Management Application Lifecycle

Management

IT Infrastructure

Management

IT Portfolio and Project

Management IT Service Management

IT Strategy and

Governance

Multichannel Marketing

Management

Enterprise Mobility Consumer

Experience Data Management Analytics

3D Business

Visualization

Highest value

for automotive

2 2

3

2

2

3 2

3

1

* For component manufacturers


Today

Manage financial performance Business value for financial and managerial reporting

Risk of noncompliance due to

unfulfilled (overruns in) audits

A lot of data; decision-relevant

information not readily available

Data analysis not supported or

automated

Long-running batch jobs/reports

Time-intensive data analysis

Large number of time-consuming,

and non-value-added processes

required to provide access to

accurate, up-to-date information

Timely execution of compliance-

relevant validation tasks

Increased end-user satisfaction

(accurate, detailed, visualized, timely,

and actionable information)

Acceleration of key critical-path

processes and reports

Instant response time on most data

analysis queries

Workarounds and data latencies

eliminated

End-user data analysis through self-

service means (via SAP

BusinessObjects business

intelligence solutions)

Improve service level

performance

10%

Reduce

Minimize

month-end

closing time

33%

operating costs

25%

Key performance indicator (KPI) improvements to be validated by SAP Value Engineering

With SAP Business Suite on SAP HANA


Today

Continuous product and service innovation Business value for project management (SAP Portfolio and Project Management)

Project members experience long

waiting times when starting the

project and task dashboards. This

reduces user productivity when

working on several projects and tasks

across projects

Updates on multiple tasks are

inefficient and time-consuming as

project team members confirm tasks

one by one to reduce waiting times

Searching for documents across

projects takes a very long time for

large portfolio of projects.

The process of finding projects,

tasks and phases by responsible

project member is slow

Faster access to my tasks, my

projects

Accelerated access to project, task,

and checklist items dashboards

Project team members enabled to

confirm times, status, and dates and

attach documents for several tasks at

once

Increased user productivity

Accelerated search for documents

Faster ability to find projects or tasks

by responsible project member

Increase user productivity

20%

Reduce

Improve

time for task

confirmation

35%

Search for documents

and project elements

35%

KPI improvements are high-level estimates and will have to be validated for each customer situation.

With SAP Portfolio and Project

Management on SAP HANA


Today

Continuous product and service innovation Business value for project management (project system)

Long wait and locking times along

business processes hinder project

execution and impact flexibility to

react on deviations

User acceptance is reduced due to

affected usability in handling large

project data

Reduced waiting and locking times of

critical transactions along the end-to-

end process, resulting into higher

process efficiency and improved

employee productivity

Increase user productivity

and end-to-end

process efficiency

10%

Improve transparency and

decision support to

take appropriate

corrective measures

in time

10%

Real-time analysis of high volumes

of data for complex, long-lasting

projects or cross-project monitoring

is challenging due to high data

volumes

Due to missing 360-degree real-time

transparency across applications

deviations in costs, time, resources,

or quality are seen too late in the

process

Acceleration of project info system reporting and new project line-item reporting delivering faster insights

Early insight in deviations and risks enabling timely corrective measures by highlighting deviations in real time

Planned: Project execution cockpit enabling project managers as well as project employees to analyze status and progress of one or multiple projects in execution from an end-to-end perspective at maximum speed with real-time data, and to derive and execute actions wherever applicable




Today

Operational procurement/inbound logistics (for direct material) Business value for warehouse management

No up-to-date view of the inventory

situation

Need for accurate display of actual

stock to react quickly to stock

shortfall

Time-consuming inventory

management reporting

Real-time access to complex

inventory management data

Real-time stock insight and inventory

monitoring

High-performance inventory

management with large volumes of

documents

Higher process efficiency in adjacent

procurement processes

Reduce inventory levels

10%

Minimize

Optimize

out-of-stocks

5%

working capital

5%

KPI improvements to be validated by SAP Value Engineering



Today

Lean manufacturing Business value for supply chain monitoring

Lack of near real-time information

Batch jobs to extract data from

planning system to central reporting

typically on weekly basis

No ad hoc operational reporting

Reporting, queries, and dashboards

required to be created by each

customer individually

Not possible to run sub-daily planning jobs and analyze results due to long data preparation times in SAP NetWeaver Business Warehouse (SAP NetWeaver BW)

Inability to respond quickly to ad hoc queries from customer, which may result in lost sales

Decision support based on near real-

time information

Information updated via delta

capabilities

Built-in analytical reporting scenarios

provided with streamlined data load.

Planned ability for customers to add

their own KPIs and dashboards

Advanced data retrieving and

computing functionality of SAP HANA

used to optimize the reporting of

supply chain planning data

Reduce time spent compiling,

generating, and

waiting for reports

5% Increase

Optimize

visibility into key supply

chain data in an easy,

consumable way

8%

analysis capabilities with multiple levels of aggregation and drill-down techniques

15% KPI improvements are high-level estimates and will have to be validated for each customer situation.



Today

Make to order* Business value for material requirements planning (MRP)

Decisions are often based on

periodic MRP runs and outdated

information; process done in batch

It is not possible to replan quickly if

conditions change due to long run

times. Prediction of inventory

coverage for critical parts is difficult

It is not possible to replan if

conditions change during the

planning horizon due to long runtimes

Faster replanning allowing more

frequent MRP runs in shorter cycles

Instant reaction to demand changes

and updates to the supplier

Demand information propagated

faster through the supply chain

More frequent MRP runs

Allowing reduction in inventory and

safety stock levels

Speeding information flow toward

suppliers, enabling them to react

faster to changed planning conditions

Better synchronized material demand

and supply planning with reduced

bullwhip effect

Reduce out-of-stocks by

5%

Decrease

Limit

inventory and

safety stocks by

5%

bullwhip effect


* For component manufacturers



Today

Make to order Business value for global plant performance management

Inability to gather and visualize data

from production in real time to

improve the status of manufacturing

performance both within and across

multiple sites

Inability to understand where

machine maintenance issues and

bottlenecks exist in production

Need to capture the root causes for

downtime, efficiency loss, and poor

quality

Unplanned downtime, suboptimal

performance and poor product quality

all contributing to decreased asset

utilization, poor product yields,

increased costs, and reduced

customer responsiveness

Combines quantitative performance

measures with qualitative context and

reasons for performance issues

Combines plant performance with

business context

Facilitates corrective action at the

plant level and across plants

Enables broader supply chain,

sustainability, financial and enterprise

performance improvements

Enterprise-level overall equipment

effectiveness (OEE) that rolls up

plant-level OEE for enterprise

analytics and comparing assets and

performance across multiple sites

Improve return on assets,

costs of goods sold,

and product quality

5% Increase

Reduce

resource utilization

and asset uptime

8%

unplanned downtime,

changeover, and

waste

20% KPI improvements are high-level estimates and will have to be validated for each customer situation.



Today

Outbound logistics Business value for warehouse management (outbound logistics)

No up-to-date view of the inventory

situation

Need for accurate display of actual

stock to react quickly to stock

shortfall

Time-consuming inventory

management reporting

Real-time access to complex

inventory management data

Real-time stock insight and inventory

monitoring

High-performance inventory

management with large volumes of

documents

Higher process efficiency in adjacent

procurement processes

Reduce inventory levels

10%

Minimize

Opitmize

out-of-stocks

5%

working capital

5%

KPI improvements to be validated by SAP Value Engineering



Today

Supply chain execution Business value for demand-driven supply chain

More and more difficult to access and

effectively use timely demand

information from the supply network

Decisions often based on incomplete,

inaccurate, and outdated information

Hardware and system landscapes

that are challenging to administrate

Increased business/expert user

productivity with faster planning

processes and improved user

experience and by driving rapid

consensus across the supply chain

network

Near real-time reporting with

increased speed of information

analysis leading to better supply

chain visibility and decision

making

Improved production and cost

efficiency by simplified system setup

and administration and by providing a

more robust planning foundation

Reduce planning cycle

times

36%

Increase

Reduce

supply chain

performance

18%

total cost of

ownership (TCO)

24%




Today

Customer service, support, and warranty management Business value for contact management with interaction center

To successfully resolve customer

issues, companies must be able to

quickly locate the right experts or

resources within the organization,

whether those experts reside inside

the contact center or elsewhere

Managers and supervisors lack

actionable reporting and visibility into

the workload of their teams

High volume of customer records and

interactions results in increased

search times and greater difficulty

locating specific customer records

With the new agent inbox based on SAP HANA, users can more easily search for relevant experts – whether in their own team or elsewhere in the organization – to dispatch/escalate issues to the best-suited employee roles

A new interactive work distribution

dashboard provides supervisors with

actionable insights into the workload

of their teams and employees

Searches in the interaction center are

significantly faster, including account

searches, interaction history, and the

customer fact sheet

Decrease average handling

time by

36%

Improve

Reduce

service-level

agreement (SLA)

compliance

5%

service cost

10%




Today

Multichannel marketing management Business value for marketing

Missed market opportunities due to

lack of visibility and inefficient

processes

Data explosion, driven by new level

of connectivity of consumers via

mobile devices and social networks

Data in disparate data sources, which

prevents true 360-degree view of the

customer

Agile marketing to respond faster to

changing market dynamics and

opportunities

New analytical, data mining

functionality for Big Data (social

media, predictive)

Near real-time monitoring and

reporting on marketing performance

One central place for collecting all

customer data, leading to 360-degree

view of customers in real time

Precision marketing to personalize

every interaction with the customer

Improve profitability by

0.5%

Optimize

Increase

return on

marketing

investments by

15%

customer

satisfaction by

40%




Next step Business scenario recommendation and value discovery workshop

SAP offers a proven methodology and approach to

discover the customer-specific business

improvement areas and quantify value potential.

We suggest such a workshop with your

line-of-business and IT experts.

As starting point, we recommend a performance

and usage analysis of your current system.

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Thank you

© 2013 SAP AG or an SAP affiliate company. All rights reserved.

Appendix with detailed customer cases

21 © 2013 SAP AG or an SAP affiliate company. All rights reserved.

Real customer cases

(based on SAP Value Engineering)


Reference automotive Summary of validated scenarios (combined findings)

Feasibility

Bu

sin

ess v

alu

e

Legend

Lo

w

Hig

h

Low High

Real-time material

coverage and

dynamic planning

SAP Business

Suite on SAP

HANA

SAP HANA

products

SAP HANA

Platform

Real-time project

management

reporting

Detailed claim level

analysis for

warranty cost and

incidence

Equipment

reliability analysis

and prevention

failure

SAP HANA Platform: customer-specific

SAP HANA products: SAP NetWeaver BW on SAP HANA,

high-performance applications (HPAs), apps powered by

SAP HANA

SAP Business Suite on SAP HANA

Real-time quality

assurance

Parts management

Real-time

processing quality

management

notifications

Costing and

financials

Phase – deployment road map

1 Short term

CRM: Detailed claim level analysis (ability to carry to

warranty analysis at detailed claim level for

better analysis of failure)

Production:

Real-time quality assurance (free test capacity

by reduced test times; TCO reduction via

reduced long time test; time-to-market

improvement; reduction of lead times)

Financials and costing:

Profitability analysis, faster financial close,

optimized cost management / controlling

2 Medium term

SCM: Real-time material coverage and dynamic

planning (real-time inventory analysis and

ability to simulate alternate production plan and

optimize production mix)

SCM: Parts management (reduction of material costs

due to demand bundling; reduction of planning

costs; increase revenue due to price

optimization; reduction of warranty claims)

PLM: Real-time project management reporting

(optimized project reporting and decision

making)

SAP HANA

use case

SAP HANA use cases mapped to industry value map end-to-end solutions



7,3

21,3 21,3 8,3

8,3

20,6

1,7

5

25

0

10

20

30

40

50

60

70

80

2013 Phase 1 Phase 2 Phase 3

Costs SoH Applications Platform

$

Based on actual SAP

customer engagements

Annual benefits, SAP HANA

Platform: US$25 million

Annual benefits, applications powered

by SAP HANA: US$21 million

Annual benefits, SAP Business Suite

on SAP HANA: US$21 million

Estimated deployment costs

Total transition cost: to be determined

SAP HANA Platform: Anything built on the platform that is customer-specific – new business processes and business models

SAP HANA products: SAP NetWeaver BW powered by SAP HANA; high-performance apps (HPAs); applications – mapped to

inventory value map (IVM) end-to-end (E2E) solutions

Currently available functionality (SP0, 1, 2) – 23 scenarios mapped to IVM E2E solutions, and planned functionality(all of the

E2E solutions on the IVM are in scope)

SAP HANA Platform

SAP HANA products

SoH = SAP Business Suite on SAP HANA

In millions of US$

More information: Indranil Som; Ben Gruber; John Kohlmeyer

Annual revenue: US$50 billion

Reference automotive OEM SAP HANA Platform


Note: Use cases in the global use case repository are captured directly from customers and internal SAP innovation

sessions and may not be completely validated.

Spare parts visibility and planning Automotive

Business context and goals

Ability to scan and analyze 8 million SKUs to improve and optimize spare part availability at the

lowest cost to ensure customer satisfaction and increase spare parts sale

Business challenges

Huge volume of spare parts SKUs to manage; low customer satisfaction due to unavailability of

spare parts at the time of need by the customer

Process innovations

Ability to scan and analyze 8 million SKUs across the whole supply chain and visualize all

related factors (current inventory, location, statistical forecast, reservations, and more)

Contribution of SAP HANA

Ability to forecast, plan, and optimize replenishment of spare parts taking into account multiple

parameters (such as current inventory, predictive demand from existing car fleet in the market,

customer appointments)

Value drivers/KPIs

Customer satisfaction index, spare parts sales, spare parts inventory

Innovation scope

SAP HANA products (HPAs, Apps)

End-to-end (E2E) solution

Automotive – service parts management

Value potential 5

Feasibility 3

Low High

1 5

Low High

1 5




Fast financial closing Automotive

Innovation scope

SAP HANA products (HPAs, Apps)


Automotive – financial performance

management

Value potential 3

Feasibility 4

Low High

1 5

Low High

1 5


Reduce data to be loaded on SAP NetWeaver BW using in-memory database

Avoid system overwork during critical period

Improve data quality

Simplify system management during critical closing period

Reduce effort auditors spend on reviewing data

Improve analysis and reporting productivity (using SAP HANA also during nonclosing period)

Reduce IT and finance overtime working cost during weekend

Improve IT efficiency writing report with SAP BusinessObjects Web Intelligence software

Business challenges

Reduce time to close financial books

React quickly at business needs to post and check books during critical month-end closing period

Improve efficiency and effectiveness of financial process

Process innovations

Check posting correction in near real time, eliminating wait time to upload to SAP NetWeaver BW

Help ensure real-time visibility and reporting of all GL posting in ERP system

Improve speed and quality of report generation

Reduce data to be loaded in SAP NetWeaver BW


Reduce resident data on SAP NetWeaver BW (FI,AP,AR,CP-PA no longer loaded)

Avoid SAP NetWeaver BW project cost (archiving and optimization)

Value drivers/KPIs

Finance FTE productivity

SAP NetWeaver BW hardware cost

SAP NetWeaver BW project cost for

optimization and archiving




Motor engine test bench: Real-time quality assurance Automotive


The engine test bench processes are substantial for all automotive and engine OEMs because

they affect one of the core products/components

Business challenges

Besides the efforts and expenses for test runs, the growing data volumes must be handled and

stored. These data is expected to build the foundation for pattern deduction and provide an

information source for new high-value services (prediction and so forth)

Process innovations

Analysis of engine test data from machine data, production process data, and quality

management data; connection to vehicles for telemetric data, creation of special pattern,

knowledge basis for service partners


Analysis and prediction of data sets out of engine, enterprise resource planning (ERP), quality

management (QM), predictive analytics; reduction of test times by over 10x

Value drivers/KPIs

Free test capacity by reduced test times; TCO reduction via reduced long-time test; time-to-

market improvement; reduction of lead times

Innovation scope


(now and future)


Automotive – make to order

Value potential 5

Feasibility 2

Low High

1 5

Low High

1 5




Equipment reliability analysis and prevention failure Automotive


Based on equipment performance characteristics provided by telematics, alerts are sent to

operators/owners and local dealers when equipment diagnostics detect failure, potential failure,

or other critical issues

Business challenges

The amount of data generated and available for analysis is enormous, and tools required for

effectively analyzing and using the data have not previously existed

Process innovations

Gain insight and knowledge out of Big Data


Store telematics data in SAP HANA and perform ad hoc analysis of data to identify performance

characteristics in real time to predict machine failures and trigger alerts

Value drivers/KPIs

Reduce warranty cost; optimize vehicle part durability; reduce recall liability costs

Innovation scope


(now and future)


Automotive – embedded product compliance

Value potential 2

Feasibility 3

Low High

1 5

Low High

1 5




Real-time processing of quality management notifications Automotive


Quality management notifications are created and processed in QM systems or other

applications based on which specific problem is described; actions and root cause analysis are

initiated

Business challenges

Enormous amounts of data from various production sites, facilities, and lines must be collected

and consolidated; optimal analysis and graphical display of results must be available in real

time

Process innovations

Linkage of all relevant data sources to one common data pool; retrieval of real-time data from

QM systems; fast generation of reporting and analysis


Prompt analysis of the vast information from the QM notifications in a consolidated manner

could be the basis for faster decisions within the production process to assure high quality

requirements

Value drivers/KPIs

Reduction of re-work; increase of transparency in QM and assurance of high QM standards;

reduce scrap

Innovation scope


(now and future)


Automotive – embedded product compliance

Value potential 2

Feasibility 3

Low High

1 5

Low High

1 5




Detailed claim-level analysis for warranty cost and incidence Automotive


Detailed claim level analysis can help reduce warranty claims

Business challenges

There are performance issues in calculation of IPTV (incidents per thousand vehicles); root

cause analysis by claim type and by individual claim is not possible due to high volume of data

Process innovations

Warranty claim analysis by individual, vehicle, and claim type will be possible


Ability to drill down and analyze data at claims level, which can then be linked to root causes of

failure, can lead to better analysis of failures and thus identification of corrective measures to

be taken

Value drivers/KPIs

Warranty claims/expenses

Innovation scope


(now and future)



Value potential 2

Feasibility 3

Low High

1 5

Low High

1 5




Real-time material coverage and dynamic planning Automotive


An inventory dashboard is available to buyers to check gaps in inventory availability at the start

of a day to plan for stock-out situations, but it does not support planning based on available

inventory

Business challenges

There is no capability to carry out dynamic planning based on available inventory and

production plans, as system does not support processing of such huge amount of data (takes

more than 6 hours)

Process innovations

Ability to simulate alternate production plan quickly at the beginning of a day/shift will enable

optimization of production capacity and material available


Simulate alternate production plans on the fly; drill down to Nth level of bill of materials, on the

fly, and get more accurate insight into inventory; ability to optimize production mix based on

product profitability and market demands

Value drivers/KPIs

Production/revenue, inventory level (raw materials, components)

Innovation scope


(now and future)


Automotive – supply chain execution

Value potential 5

Feasibility 2

Low High

1 5

Low High

1 5




Original parts management Automotive


Company needs the ability to reduce investment in original parts and have the right parts at the

right time and place

Business challenges

Matching of original parts requirements and current inventory is not visible on a global and

regional level; simulation of plan data cannot be executed due to large data volumes; complex

analysis requests takes several hours

Process innovations

Worldwide original parts requirements vs. inventory matching with early alerting; global planning

and simulation of original parts per company brand; predictive maintenance through automatic

defect detection


Insight into current original parts requirements vs. inventory matching in real time; central data

platform for prediction and simulations

Value drivers/KPIs

Reduction of material costs due to demand bundling; reduction of planning costs; increase

revenue due to price optimization; reduction of warranty claims

Innovation scope


(now and future)



Value potential 4

Feasibility 4

Low High

1 5

Low High

1 5

Delivering Real-Time Business Value for Automotive

Technology

Transcript of Delivering Real-Time Business Value for Automotive