Ana Nuñez
LAC Hub Lead for Digital Supply Chain CoE & Business Development Director
SAP Mexico
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Effective Digital Practices Guarantee Market Success

By Alejandro Enríquez | Wed, 10/06/2021 - 09:00

Q: What is the added value of SAP for auto parts manufacturers and OEMs?

A: Globally, SAP helps over 400,000 companies in 25 industries be more competitive in the innovation of their processes. In the automotive sector, SAP has precise solutions for each process in the value chain, including R&D, manufacturing, supply chain, sales and marketing and after-sales services. SAP also supports the sector’s transition toward more sustainable and intelligent models.

SAP is a technology ally of key companies in each industry. Recently, BMW and SAP founded the Catena-X Automotive Network with other leaders in the automotive sector to redefine its future. These leaders aim is to increase the competitiveness of the industry, improve efficiency and accelerate processes through standardization and access to information and data.

SAP’s alliance with the automotive sector includes a shared vision of continuous exchange of data for all employees throughout the automotive value chain. With a powerful and holistic system, we guarantee the economic viability of all network partners, from SMEs to corporate groups.

Q: What is the structure of Catena-X and how does it help the automotive sector?

A: Catena-X is made up of three pillars. The first is Initial Use Cases, which places the alliance at the core of the initial data exchange in the automotive industry. This is used to ensure traceability of vehicle components until the moment of their assembly, as well as the traceability of carbon footprint and a collaborative management between manufacturers and suppliers. The second pillar is Technology and Network, which connects to cross-sector networks and technologies for data infrastructure (GAIA-X) and data exchange to benefit from a holistic operating system. The objective is to offer interoperability and efficiency between manufacturers and suppliers. The third pillar is Transfer and Escalation, through which we connect suppliers in the industry. The Catena-X network is open and our technologies are scalable no matter the size of the business.

Q: How does SAP help make operations more efficient?

A: For companies in the automotive sector to move forward, they must prioritize a digital supply chain and smart manufacturing to accelerate innovation cycles. Responsive digital supply chains should use smart technologies to ensure fast high-quality flows, which lead to higher productivity, flexibility and better customer service.

Customer-centric strategies are also a must because discovering the mobility needs of each individual, family or company creates a new perspective on business opportunities. It also increases brand loyalty, customer satisfaction and participation in new mobility models. Mobility solutions also foster new business models and unlock new revenue opportunities. Our connected world turns every car into a platform for entertainment, productivity and mobility. Finally, attracting and retaining a highly skilled and engaged workforce are key drivers for innovation and success.

Through digitalization, we saw customer satisfaction increase by over 6 percent, sources of income by 10 percent, visibility in the value chain by 25 percent, cost reduction by 5 percent and productivity by 12 percent.

Q: How is SAP leading the digital transformation of manufacturing?

A: With the increasing diversity of car models, complexity is increasing and traditional linear production on assembly lines is reaching its limits. Enabling modular manufacturing will be key to efficiently generate heterogeneous models at scale, providing a quick and flexible way to react to changing customer demand.

Operating a digital supply chain with smart and modular manufacturing requires new capabilities along the value chain. Our innovations for the sector include SAP Digital Vehicle Hub and SAP Asset Intelligence Network, which can be used in open and secure value creation networks. SAP S/4HANA supports integrated supply chain planning and execution, while SAP Extended Warehouse Management integrates logistics operations, SAP Integrated Business Planning for Supply Chain supports comprehensive supply chain planning, SAP Predictive Asset Insights supports data-driven insights and SAP Digital Manufacturing Cloud helps enable manufacturing insights and execution.

Q: What are your strategies to support the digital transformation for companies of all sizes?

A: Understanding the need to take transformation to a new level, we launched RISE this year to offer our clients a comprehensive solution tailored to their specific needs. We want to help companies transition to the cloud easily and at their own timing. This service is personalized and adapts to the company’s times and technological needs, leading companies from Software as a Service (SaaS) to the "Business Transformation as a Service.”

Q: What are the benefits of traceability of the automotive supply chain?

A: Supply chain resilience is critical to the growth of auto suppliers. Most companies need a new class of process efficiency that will lead to lower manufacturing costs and inventory levels, as well as better performance and quality.

Many vendors have already found that advanced technologies drive faster and smarter decision-making. Every time they over-order or hold inventory, they spend company funds on storage charges, material obsolescence or waste. The automotive industry uses SAP S/4HANA Cloud and SAP Cloud Platform, which use technologies like machine learning, to find and solve problems quickly while saving resources.

For example, the Capgemini Intelligent Assistant for Automotive application built on SAP S/4HANA, connects SAP data, such as transactions, posts or events, to detect anomalies and indicate potential problems throughout the supply chain.

Q: What are the benefits of supply chain ERP systems and sustainability strategies?

A: The latest innovation we brought to market is SAP Product Footprint Management, a milestone on our journey to help customers systematically monitor and control greenhouse gas (GHG) emissions in their end business processes. To support their decarbonization journey, the solution provides data transparency about their environmental footprint and enables them to make more informed decisions in real time.

The potential impact of GHGs cannot be overstated. Boston Consulting Group analyzed emissions in eight major supply chains and found that about 40 percent of GHGs can be removed with measures that generate cost savings or cost less than €10 (US$11.62) per ton of CO2 equivalent.

Q: How does SAP help companies to achieve carbon neutrality?

A: Numerous technologies are emerging to facilitate the identification, tracking, trading and offsetting of greenhouse gas emissions. As long as we stay focused on our core business capabilities and deliver innovations on the SAP Business Technology platform, we can support companies in solving environmental, social and corporate governance issues at scale. SAP allows organizations to assess and reduce their carbon footprint, increase resource productivity through circular processes and run safer and more sustainable business processes, while providing industry-specific information from operational and financial institutions in all value chains. By incorporating sustainability data into final business processes in value chains, we can help our clients adapt their key business processes to be more sustainable. In close collaboration with our partners and customers, we will jointly shape and accelerate innovations for the future sustainability landscape, enabling and driving new redefined business process models.

Last year, SAP launched the Climate21 program that provides product-related greenhouse gas data that helps businesses and consumers make more responsible purchasing decisions. Likewise, a few months ago SAP presented the GreenToken digital solution that guarantees transparency in supply chains regarding the origin of sustainable raw materials and simplifies traceability. Through blockchain, SAP will provide real-time information on the raw material throughout the value chain.

Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst