Let us take an industry-specific look at SAP’s cloud-based Product Lifecycle Management (PLM) solution, SAP Enterprise Product Development, and see what it brings to the table for automotive OEMs (Original Equipment Manufacturers) and suppliers. In currently challenging times, automotive players need to be well prepared and super agile. The automotive industry is facing a huge disruption. By 2030, electric vehicles are expected to account for over 60% of new car sales. Trends such as connected vehicles, autonomous driving, shared mobility, and mobility services are leading to radical changes in the industry. Consequently, automotive players are challenged between running a profitable traditional business based on internal combustion engines while transforming their business towards electrification and paving the way for new revenue streams.
In these times, customer centricity and customer satisfaction are more important than ever before. Automotive companies need to deliver viable products tailored to the user of a car and based on the customers’ requirements. To remain competitive, it is key to reduce time-to-market by streamlining research and development processes. At the same time, efficiency and quality need to be increased not only in engineering but also in the supply chain as there is a high pressure for revenue growth and cost reduction to stay profitable and to be able to invest in new fields. In addition, environmental protection and compliance regulations are key topics for the automotive industry.
Of course, this has a significant impact on the research and development departments of automotive OEMs and suppliers. To achieve faster development cycles and higher efficiency, the process of designing and developing, including frequent changes, needs to be fully aligned and transparent with all stakeholders – always keeping the customer, as well as sustainability and compliance in focus. A seamless digital thread across R&D and subsequent disciplines such as procurement, manufacturing and aftersales is needed to break down silos and provide the efficiency and quality required for success.
However, today, we are often faced with fragmented IT solutions which do not allow for effective data exchange and collaboration between the stakeholders. Research and development processes are often only loosely coupled to sales, manufacturing, and aftersales processes, which makes a seamless digital thread impossible and does not allow for a closed feedback loop and sufficient transparency. Changes cannot be efficiently aligned with all stakeholders. Also, visibility into compliance and sustainability requirements and data is limited.
Now let us take a closer look at how SAP Enterprise Product Development helps automotive OEMs and suppliers tackle their challenges. SAP Enterprise Product Development is SAP’s PLM software as a service (SaaS) offering and our system of differentiation and innovation that extends our PLM suite into the cloud. It is the door opener for completely new and enhanced processes in engineering. I will be focusing on four use cases for automotive.
Innovation management to foster ideas and product improvements
Let us start with innovation management, a solution to collect and process all kinds of ideas. Research and development investments in the traditional automotive business are usually significant. The challenge is to produce new ways of innovating to make sure that the right decisions are taken to grow the business. It is key to manage the idea pipeline in an efficient way and to make sure that the best ideas become reality.
SAP Enterprise Product Development provides a solution which lets you collect ideas by means of idea collection campaigns. Internal and external parties can submit ideas. Incoming ideas can then be evaluated, scored, and commented on by the experts. Ideas can be clustered as needs and linked to a requirements structure in SAP Enterprise Product Development requirements management. This helps turn the digital thread into reality, provide ideas for new, innovative products, and maximize the business outcome. With that, viable products tailored to the customers' needs can be delivered.
Specification management ensures compliance and sustainability
Automotive players need to meet standards for safety, environmental protection, and usability to avoid negative impact in terms of cost of compliance, reputation, and efficiency. This entails marketability aspects - what is needed to be compliant with local regulations including sustainability CO2 or plastic tax legislation (i.e., which and how many product components/ingredients are used where).
Specification management enables you to capture additional product data from chemical/physical to sustainability characteristics and leverage this information for compliance checks, quality assessments, sustainability reporting and legal information requirements.
Collaborating on specifications allows you to share digitized product data seamlessly with other teams or external stakeholders and collect sustainability parameters or other chemical/mechanical product details. This seamless collaboration in one single system improves specification accuracy and shortens lead times.
Specification management allows for better control of product safety aspects and thus reduces the risk of a product recall or withdrawal. Full visibility into sustainability aspects during product design and embedded market rules to reach maximum marketability ensure sustainability and compliance. Having captured digitized product and sustainability characteristics with clear approval workflows and traceability function also facilitates compliance/audit processes.
Collaboration in an early design phase enhances transparency and efficiency
During the pre-series phase, designers develop new concepts and models. First prototypes are ordered. Close collaboration between all stakeholders, no matter if internal or external, is essential to guarantee proper communication and exchange of design documents and ongoing changes. It is therefore key to have a collaboration environment that allows for a consolidated view of the status.
SAP Enterprise Product Development allows external and internal stakeholders from design, purchasing, logistics and manufacturing to collaborate consistently. CAD (Computer Aided Design) models, coming from e.g. SAP Engineering Control Center, can be shared. Seamless collaboration is given by means of a flexible workflow and task management. Current designs and corresponding changes can be visualized, and adjustments can be communicated efficiently via redlining functionality.
The stakeholders collaborate based on consistent data when exchanging documents, BoM (Bill of Material) structures etc. so that full reliability, change management and transparency is provided. This allows for a more efficient development process, faster decision making and with that also a faster time to market at reduced cost.
Visualization in aftermarket sales and service for increased accuracy
My fourth use case consists of two aspects, service parts ordering and the service event itself. Inventory management, order and return handling get more complex over time as the parts catalog grows. Costs can go up dramatically if, for example, wrong orders are placed. Secondly, looking at the service event itself, first-time fixes are critical for driving customer satisfaction as well as for keeping costs down.
To streamline both processes, SAP Enterprise Product Development visualization capabilities can be used for service parts ordering and the service event itself.
The visual spares capability in SAP Enterprise Product Development allows you to transform 2D & 3D product data into interactive service parts catalogs so that the parts can be selected within the visualization. Standard integration to SAP Commerce Cloud is provided to support a seamless ordering experience. The correct service part can be easily identified. Stocks can be reduced, and supply chain costs can be lowered.
Visualization capabilities are also leveraged for visual work instructions that transform 3D product data into interactive service instructions. First time fix rates are improved by providing the right service instructions at the right place and time. This maximizes customer satisfaction and loyalty, which increases revenue.
This is how aftermarket sales and service providers can be turned into profitable businesses.
Summary
To sum up my blog, I just elaborated on selected SAP Enterprise Product Development use cases for automotive. These use cases help you foster customer centricity, enable you to be a compliant and sustainable enterprise, and to reduce time-to-market and increase efficiency. Ultimately, costs can be lowered and revenues increased.
SAP Enterprise Product Development has a lot more to offer, e.g., in the areas of requirements management and systems engineering, configuration/baseline management, handover to manufacturing, test and validation against requirements as well as digital twin development and monetization – just to mention a few topics. I hope you liked my blog. Stay tuned for further information on our SAP Enterprise Product Development portfolio.
Looking for more information?
See this blog describing how to sign up for enablement sessions and training, how to find the online help and feature scope description, etc.
A big thank you to Ing-Marie Lönnerheden and Petra Streng for contributing to this blog.
About the author
Simone is an SAP Product Manager with over 25 years of experience in development and sales in the SAP and non-SAP space. She is an industry enthusiast specializing in Automotive and other Discrete industries, always focusing on our customers’ needs.
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