Volkswagen Streamlining Global Engineering, Production and After-sales Operations

Automaker working with SAP on product lifecycle management, customer relationship projects

Wolfsburg, Germany — December 4, 2003 — Volkswagen Group is leveraging the SAP for Automotive portfolio of solutions to revolutionize its engineering, production and after-sales processes across its global enterprise, the solution provider announced this week.

In one of several SAP deployments, the carmaker has launched a first-of-its-kind system in the automotive industry, based on mySAP Product Lifecycle Management (mySAP PLM), the company's Technical Information-Synchronized (TI-Syncro) system, which handles electronic bills of materials and is helping the company achieve cost savings across engineering and production operations.

In a further project, SAP solutions link production, financial and logistics processes to increase transparency and efficiency across motor assembly operations. Additionally, mySAP Customer Relationship Management (mySAP CRM) is helping the company streamline spare parts fulfillment and collaboration across its European Volkswagen (VW) dealership network, according to SAP.

"SAP for Automotive offers the best-suited functionality to help us reach our goals of enhancing efficiency with standardized processes across our global operations," said Otto Joormann, project manager of TI-Syncro at the Volkswagen Group. "We needed a single, enterprise-wide system to provide clear, uniform bills of materials to streamline engineering and production workflows. With SAP, we were able to tailor a comprehensive system and have it up and running without a hitch. TI-Syncro is a breakthrough solution — one of many innovative technologies that are helping us reduce production costs, increase profit margins, drive after-sales business and better meet customer demands, giving our global brands significant competitive advantage."

TI-Syncro Drives Productivity

The launch of TI-Syncro, the result of a two-year cooperative development project between Volkswagen Group and SAP, marks the achievement of the leading carmaker's strategic vision of many years.

In the mid-1990s the company began laying its plans for an integrated system to improve the reliability and accessibility of its bills of materials. Consisting of tens of thousands of components and their variants for each car model alone, these materials lists comprise the central data structure for all engineering, production and service processes. Looking to extend its SAP investment, the company chose mySAP PLM as the basis for creating the integrated solution that is slated to replace more than 10 legacy systems.

Currently in operation for the engineering process, TI-Syncro is helping the company cut engineering and production costs through error reduction, shorter data entry, retrieval and processing times, and better identification of further potential areas of process improvement. TI-Syncro will be deployed globally in successive steps to ultimately span the entire product range of all of Volkswagen Group's brands.

Using mySAP PLM, all component variants, sub-variants and their nodal points are now mapped to the electronic, variant-structure bill of materials that makes technical information easier to read and analyze, helping the company avoid missing parts and redundancies while enhancing process reliability and streamlining change management. TI-Syncro shows interrelations in manufacturing processes, determines whether dependencies are maintained correctly in the product structure and reveals the implications of changes — for example, a car with air conditioning requires a more powerful battery.

Additionally, the system allows the company to more efficiently develop and produce new models, simplifying the design and approval processes by enabling easy identification of proven parts that can be immediately implemented rather than having to "recreate the wheel." By identifying which components are identical for different models, fewer types of parts can be produced in higher volumes — and thus at lower costs.

Service Across European Dealership Network

SAP solutions are also helping the company ensure a consistently high level of service across its extended VW dealership network, thus improving service to its end customers throughout Europe.

Leveraging automotive industry-tailored channel management capabilities in mySAP CRM, the company has launched eParts, a single-source Web site through which independent dealerships can search at their authorized VW dealerships to order accessories and replacement parts.

Via a single, hosted order-management system that integrates inventory data across the Volkswagen authorized dealership network, dealerships can fulfill orders from their own stock or set the order fulfillment processes in motion automatically with VW.

SAP said that eParts is helping VW streamline partner collaboration and reduce supply chain costs, providing all channel partners with visibility across the entire order-fulfillment process, from customer request to delivery.

Streamlining Assembly

Finally, in a recent project at its assembly plant in Poland, SAP for Automotive solutions have replaced various legacy systems and manual, spreadsheet-based processes.

At the Volkswagen Motor Polska plant — where a staff of 980 produces more than 2,250 motors per day for all Volkswagen Group brands — production, financial and logistics processes are now linked in a single system, creating increased transparency and efficiency across all operations.

Implemented by Novasoft, a partner for SAP for Automotive, the integrated SAP system has reduced errors by eliminating redundant, manual data entry between procurement, customs, production and financial processes.

Each motor produced now carries a barcode serial number and is carried in a handling unit container. This allows the company to track the product seamlessly throughout its lifecycle, realize smoother material flow at the plant and enhance the quality and speed of data flow with automatic information delivery to financial and production databases.

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