The client's company is a shining example of innovation and excellence in the automotive industry, facilitated by a state-of-the-art SAP S/4HANA system integrated by LeverX.
Client
The client is a large company with over 10,000 employees. Specializing in producing and distributing automotive spare parts, the company is known for its innovative approach to manufacturing processes.
Challenge
The company has recognized several necessary enhancements, which include:
- Streamlining the management of extensive production volumes
- Optimizing intricate business processes
- Integrating fragmented IT infrastructure with diverse systems
- Modernizing manual planning processes reliant on Excel spreadsheets as data sources
Implementing these flows opened up opportunities for digital transformation, reduced human errors, and contributed to overall business growth.
To attain these objectives and enhance overall efficiency, LeverX implemented a comprehensive solution that incorporated enhancements to various vital business processes, such as manufacturing, supply chain, logistics, distribution, financial accounting, tax, marketing, and customer service. The company had multiple assembly sites, including two sizable factories exclusively dedicated to automobile production. At the juncture of process flow and production planning, many paper reports were traditionally generated by linemen, operators, engineers, dispatchers, and other employees.
The paper-based system mandated logging, reporting in Excel spreadsheets, and printing schedule sheets from the process control system, which lead to continuous duplication and transfer of reports between offices, along with unintentional errors. To streamline and harmonize intricate processes, there was a need to provide an automated solution that facilitated real-time adjustments and optimization of inventory levels in accordance with precise requirements and deadlines.
The solution was to integrate the existing GM GEPICS MES system with SAP. LeverX successfully implemented a centralized system for maintaining master data on suppliers, customers, and materials, which eliminated outdated and duplicate information. This centralization of data increased efficiency and ensured that information was accurate and up-to-date across the company's operations.
Another objective was to achieve high-volume production with minimal warehouse inventory, aiming to eliminate potential collateral losses. These adjustments were expected to automatically influence the quantity of materials ordered, resulting in a corresponding adjustment to the delivery time of finished products to the warehouse. Prior to implementing this solution, the company had to manually recalculate the entire plan, not only complicating the process but also consuming significant time.
Solution Description
In this SAP S/4HANA implementation project, we adhered to the Waterfall model, with the initial stage being project requirements analysis. At this stage of a project, we immerse ourselves fully in the customer’s business processes, determine the software requirements of the system, and gain a complete understanding of those areas that can be improved within the project.
During the analysis phase for this client, we identified key business processes that included sales, warehouse management, planning, production organization, supply chain, and relationship management. With this information in hand, the LeverX team worked at the customer's site. Over a span of 15 days, the LeverX team thoroughly examined each identified business process directly at the customer’s facilities and conducted interviews with employees engaged in the pertinent operations.
Subsequent to this concentrated period, our team allocated the next month and a half to meticulously prepare all the essential As-Is documentation. This information formed the foundation for steering a project to successfully implement and optimize SAP S/4HANA for the client.
Implementation Process
SAP PP/DS, SAP MM, and SAP BPC implementation
Implementing SAP PP/DS, SAP MM, and SAP BPC solutions made it possible to solve issues related to production planning and procurement of components for production and sales. These solutions have proven their effectiveness in resolving issues related to providing production with components and materials from a long-term plan to an operational process (JIT, JIS).
SAP EWM implementation
Beyond production planning, the subsequent objective involved integrating all warehouses into a unified system.
As a component of this project, the plan included:
- Implementing an address storage system
- Configuring RF transactions integrated with RF terminals
- Establishing container tracking and warehouse balance control
- Introducing new functionality for container processing
Additionally, a supplier label management function was required to enhance warehouse resource efficiency, optimize order processing, and reduce product labeling time.
The SAP EWM solution contributed to optimization and increased transparency in receiving, storing, and issuing goods. Additionally, the system helped the company minimize the time it takes to supply assembly lines while ensuring smooth operations.
Process automation
Automation has played a critical role in streamlining workflows, eliminating manual intervention, and enabling
By integrating manufacturing, procurement, logistics, and distribution, the LeverX team provided seamless synchronization of processes, ensuring precise vehicle launch sequences, as well as model-based sequencing and rapid development of a production plan for components required for assembly depending on vehicle configuration.
Financial analytics
Given the significant volume of daily financial transactions, the company required a reliable and transparent accounting system to effectively manage and process the large volume of transactions.
Analysis of bank statements
A crucial task, particularly with a substantial transaction volume, involves the automated analysis of bank statements. The introduction of the SAP FICO system facilitated a reduction in the accounting workload, automation of the statement registration process, and management of accounts receivable. It also ensured seamless integration with banks. Additionally, the system enhanced the transparency of the cost of goods calculation process and significantly improved accuracy, thereby providing a more precise estimate of costs.
Thanks to data synchronization between accounting systems and analytics, the company achieved a regulated process for closing the financial period.
Sales and marketing
To enhance the efficiency of business operations and analyze marketing activities, as well as estimate the budget for payments and promotions geared towards increasing sales, LeverX effectively implemented SAP Marketing Cloud and SAP CRM. These solutions enabled the client to boost sales, implement more efficient local marketing strategies, and attain greater success in marketing initiatives.
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Results
Incorporating innovative technologies has solidified the company's reputation as a true industry leader, setting the benchmark for excellence in the automotive sector.
LeverX effectively implemented SAP S/4HANA for the client, guaranteeing transparency in business processes, streamlining document flow, and significantly reducing manual document processing.
Here are some performance indicators attained by the client's company following the implementation of SAP S/4HANA:
Reduced inventory holding time
Due to the adoption of SAP S/4HANA, the company decreased the warehouse inventory days by 3%. This reduction in the duration of inventory storage enables optimizing working capital and minimizing storage costs.
Reduced production cycle time
Through the optimization of workflows and enhanced visibility with SAP S/4HANA, the company realized a 4% reduction in production cycle time. This acceleration in the production process facilitates swift adaptation to market demands.
Mitigated profit losses arising from component shortages
Adopting SAP S/4HANA enabled the company to cut profit losses linked to product shortages by 10%. Ensuring adequate inventory levels and efficient production helps the company avoid missed sales opportunities.
Reduced total production costs
The incorporation of SAP S/4HANA reduced this figure from 0.1% to 0.5%. This cost optimization has played a pivotal role in boosting profitability and enhancing competitiveness in the market.
Improved delivery accuracy
The customer improved on-time deliveries by 5%. Real-time information on inventory and production requirements enabled the company to ensure timely parts availability, minimize production delays, and enhance customer satisfaction.
Regulated financial period closing process
The project successfully enabled the company to implement a regulated financial period closing process by synchronizing data across all systems. This enhancement resulted in accelerated financial reporting, as well as faster and more informed decision-making. It also contributed to the overall improvement in efficiency.
Automated registration of bank statements
Following the implementation of SAP S/4HANA, the automation of bank statement registration surged by 96%. This advancement streamlined financial reporting processes, ensuring the accuracy and currency of financial information.
Centralized data management
Another outcome of the project is the establishment of a centralized system for managing master data related to suppliers, customers, and materials. This centralized approach eradicated outdated and duplicate data, leading to more precise and consistent data management across the organization.
Increased employee engagement
After implementing the new SAP system, employee engagement increased by 10-20%. The system’s user-friendly interface and automated processes made tasks more manageable, allowing employees to focus on activities that bring additional profit.
As a prominent figure in the regional automotive industry, the company remains at the forefront, continually establishing new benchmarks for quality, innovation, and customer satisfaction. The company's unwavering commitment to excellence and its deep-rooted passion for automotive excellence position it as a reliable partner for customers seeking premium vehicles. With a dedicated emphasis on growth and sustainability, the company is shaping the future landscape of the automotive industry while staying true to its core values of integrity, quality, and customer focus.
If you are considering digital transformation for your business, don't hesitate to contact LeverX experts to explore the possibilities of implementing SAP S/4HANA and the potential benefits it could bring to your business.