Shifting Gears with

SAP Automotive
Russell Graham - SAP Canada SAP Business Forum October 9th 2003

ADAPTABILITY CUSTOMER SERVICE

Suppliers

TCO
Canadian / Global Auto Industry

OEM

Sales, Service & Distribution

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 2

Agenda SAP Automotive focus Industry Challenges Shifting Gears

Adaptability Customer Service Total Cost of Ownership

Final Assembly

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 3

SAP and the Automotive Industry

IS-Automotive Industry Solution $300M in R&D over the next 5 years

Enterprise Management
Customer Relationship Management

Strategic E nterprise Managem ent

C ustom er Service

Business Intelligence & Data W arehousing

Managerial Accounting
Sales Cycle Managem ent

Financial Accounting
Sales C hannels

Product/ Market Research Brand Marketing & Analysis

Sales Management

Engineering Supplier

Engineering Projects

Supply Chain Planning & Monitoring Supplier

Variant Dem and Managem ent

Procurem ent Supplier

Strategic Purchasing

Manufacturing Supplier

Supply to Line

Sales Supplier

Sales Planning

r plie Sup
Resource Planning
Operative Procurement
Inbound Logistics
Inventory Managem ent
Manufacturing Execution
Quality Managem ent
Sales Execution
Billing

Product Engineering

Process Engineering

Target Costing

Product Data Managem ent

Supplier Inform ation Cockpit

Billing

Vendor Performance

Manufacturing Confirmation & Monitoring

Enterprise Management
Customer Relationship Management

Strategic Enterprise Business Intelligence Management & Data Warehousing

Managerial Accounting

Financial Accounting
DealerIndependent Vehicle Mgmt
New & Used Car Sale

Dealer Benchmarking

W arranty

Customer Service

Sales Management

Sales Cycle Management

Sales Channels

Service Agreements
Vehicle Distribution & Transportation

Service Fulfillment

Spare Parts Business Supplier Business Support

Demand Managem ent

H uman Resource Management

Sales & Delivery

Backorders

Supply Network

W arranty

Vehicle Business
Procurem ent Treasury Fixed Asset Management

Vehicle Planning

Technical Services/ Workshop Management

Contact/Call Management

Spare Parts

Demand Management

Financial/Rental/ Insurance Services

Finance/Leasing

. E.M O.
Repair, Maintenance, Inspection
Sales & Delivery
Insurance
Claim Submission
Procurement

Configuration & Vehicle Pricing Procurement

Vehicle Allocation

Invoicing
Enterprise M anagem ent
Custom er Relationship M anagem ent
B usiness Intellige nce & D ata W arehousing
M ana gerial Acc ounting
Fina ncial Acc ounting

Service Campaigns, Recall Management

Workshop Efficiency

Strategic E nterprise Ma na gem e nt

Backorders

Supply Network
Engineering OEM

Market Research & A nalysis

Engineering P rojects
Variant D em and M ana gem e nt

P roduct/ B rand Marketing

Rental Business
Supply Chain Planning & M onitoring OEM

Warranty & Claims Management

Business Support

Claims

Approval & Reimbursement

Inverse Logistics

Procurem ent OEM

Strategic Purchasing

O perative P rocurem e nt

Human Resource Management

Treasury

Fixed Asset Management

M anufacturing OEM

S upply to Line

Sales O EM

Sales Planning

D irect Sales

Com pletely KnockedDow n Kits (CKD)

Planning

Packing & S hipping

& l es e Sa vic Ser

M ana gem ent
Process Engineering

Marketing Program M ana gem e nt

Sales

Sales C ycle Ma nagem ent

Sales C ha nnels

Installation Ma na gem e nt
Product Da ta M ana gem e nt
S upply C hain M onitoring

Product Engineering
Resource P lanning

Target C osting

O rder S cheduling & Seque ncing

D istribution Planning

Inbound Logistics

Inventory M ana gem e nt

B illing

Vendor P erform ance

Ma nufac turing Exec ution

Q uality M ana gem e nt

Ma nufac turing C onfirm ation & Monitoring

Sales E xec ution

Vehicle D istribution

B illing

After-Sales Tracking
Ma nufac turing Confirm ation & M onitoring

K it Ma nagem e nt

Assem bly

Business Support

H um a n R esource Ma na gem e nt

Procurem e nt

Treasury

Fixed Asse t Ma nagem e nt

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 4

Industry-centric functionality
OEM Solution

> 1,200 Automotive Customers

Integrated Product & Process Engineering Model-Mix-Planning, Sequencing High Volume Backflush

Returnable packaging Self billing Sequenced JIT Calls

Supplier Solution

Sales & Service Solution

Vehicle Management System Service Parts Sales and Distribution Warranty Management

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 5

Agenda SAP Automotive focus Industry Challenges Shifting Gears

Adaptability Customer Service Total Cost of Ownership

Final Assembly

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 6

Product & Process Innovation Drives Profit & Partnerships

ADAPTABILITY
Internet Accessibility Side Impact Airbags Direct Injection (Gasoline) Alternative Fuels Voice Recognition 42V System, Field Of Vision Others..
1998 2002 2006

Climate Control Rear Seat Belt

1966 1970 1974

Unleaded Gas Airbags Emissions Control

1978 1982

Anti-Lock Brake Systems Electric Cars Integrated Systems

1986

1990

1994

Industry Differentiator
Cost Quality Responsiveness Scale/Scope INNOVATION

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 7

Japanese OEMs are the Suppliers Growth Market

Source: Roland Berger

CUSTOMER SERVICE

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 8

Cost Reduction is Key!

TCO

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 9

Agenda SAP Automotive focus Industry Challenges Shifting Gears

Adaptability Customer Service Total Cost of Ownership

Final Assembly

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 10

ADAPTABILITY

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 11

Two levels of Adaptability

Macro Respond to changing requirements

Shared services Legislation Customer Expectations
Financial IT

Market Analysis by Model Sarbanes Oxley TREAD ACT, Recycling

EDI 861, 862, 864

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 12

Two levels of Adaptability

Micro
Responsiveness to demand fluctuations

Demand

WIP

Time

OEM

Tier 1

Tier 2,3

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 13

Inventory Collaboration Hub

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 14

CUSTOMER SERVICE

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 15

A customer & vehicle centric solution

2
Vehicle Forecasting & Planning

Lead / Opportunity

8
Vehicle Market Planning

Vehicle Marketing

1
Warranty Management & Reporting
After-Sale Management Customer & Customer & Vehicle Vehicle Relationship Relationship Management Management Vehicle Sales & Distribution Management

Vehicle Sales & Leasing

Vehicle Financials

5
Vehicle Importation, Distribution, Upfitting Vehicle Billing

After Sale Follow-Up

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 16

Audi Customer Care

Life cycle management for customers and motor vehicles

Advantages
Increased customer retention Understanding customer needs Integration of automobile sales and financial services Transparency and service quality
Regardless of how our customers reach us, our internal processes run entirely electronically. Christoph Wargitsch
Manager CRM at AUDI

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 17

TOTAL COST OF OWNERSHIP

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 18

 SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 19

 SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 20

 SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 21

Federal-Mogul Corporation
Year Founded : 1899

Annual Revenues : $6.0 billion Employees Locations Global Presence Markets Served Product Lines : 49,000 : 150 : 24 Countries : OEM and Aftermarket : Bearings, Pistons, Transmission products, Sealing Systems, Friction products, lighting products

Woodward Avenue in Detroit, Michigan

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 22

Our Solution
Our solution was built upon the concept that standardization would yield visibility and together, would be the catalyst to reduce costs Standardization
Establish common business processes facilitate intra-company transactions & personnel utilization & effectiveness Consolidate 75 MRP systems to SAP R/3 to enable common process utilizing a Pre-Defined Federal Mogul Template

Visibility
Establish Common data models (customers, vendors, materials) to enable: Global Analytics Demand Aggregation, Global Sourcing, Engineering re-use, Quote process, Decision Support

Cost Reduction
Common Training, Call Center and User Support instead of multiple Repeatable fixed Fee implementation approach Supports aggressive M&A&D activity Reduces costs to trading partners

SAP Automotive Supplier SAP Automotive Supplier Best Practice Best Practice Automotive Industry Experience Automotive Industry Experience SAP 4.6c SAP 4.6c Pre-Configured Client Pre-Configured Client (PCC) (PCC) SAP Auto SAP Auto Industry Industry Solution 3.0 Solution 3.0 SAP Best Business SAP Best Business Practices for Practices for Automotive 3.0 Automotive 3.0 ValueSAP - -ASAP ValueSAP ASAP Implementation Implementation Methodology Methodology

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 23

Agenda SAP Automotive focus Industry Challenges Shifting Gears

Adaptability Customer Service Total Cost of Ownership

Final Assembly

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 24

Shifting gears with SAP Automotive

ADAPTABILITY CUSTOMER SERVICE

$
SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 25

TCO

Copyright 2003 SAP AG. All Rights Reserved

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, WINDOWS, NT, EXCEL, Word, PowerPoint and SQL Server are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, Informix and Informix Dynamic ServerTM are trademarks of IBM Corporation in USA and/or other countries. ORACLE is a registered trademark of ORACLE Corporation. UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group. Citrix, the Citrix logo, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, MultiWin and other Citrix product names referenced herein are trademarks of Citrix Systems, Inc. HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. JAVA is a registered trademark of Sun Microsystems, Inc. JAVASCRIPT is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, SAP Logo, R/2, RIVA, R/3, SAP ArchiveLink, SAP Business Workflow, WebFlow, SAP EarlyWatch, BAPI, SAPPHIRE, Management Cockpit, mySAP, mySAP.com, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. MarketSet and Enterprise Buyer are jointly owned trademarks of SAP Markets and Commerce One. All other product and service names mentioned are the trademarks of their respective owners.

SAP AG 2003, Shifting Gears with SAP Automotive, Russell Graham / 26