Those working in the automotive industry are no strangers to the type of disruption and digital transformation we’re all experiencing today. This is an industry likely to change more in the next five years than in the last 50 years. To support this rapid change, SAP hosted a webcast exploring the latest trends and technology innovations in the global automotive industry.
The SAP Industries Virtual Forum 2020: Automotive event covered three major topics:
- Customer insights on electric mobility
- The importance of customer centricity
- Achieving operational excellence
Mercedes-Benz Races to Electric Mobility
For more 120 years, Mercedes-Benz has had a rich history in the world of formula racing. The company recently pursued a partnership with SAP to leverage technology for its move into electric racing.
“Racing is about technology,” said Georg Kube, global VP of automotive and industrial machinery and components at SAP. He noted that in a digital age with electric vehicles (EVs) playing a significant role in the industry, different technologies can support companies during their transformations.
“The automotive industry is going through fundamental change at the moment and that’s a significant challenge for us,” said Ian James, team principal of Mercedes-Benz EQ Formula E Racing Team. “We also have a job to communicate that and Formula E gives us the perfect opportunity to do so.”
James said the implementation of SAP S/4HANA has allowed for the startup to establish new business systems and processes. “Having a cloud-based system helps immensely,” he said. Experience management also is very important for the EQ Racing Team and the Mercedes-Benz brand to drive fan experience and engagement.
The Keys to Adapting to Automotive Consumer Preferences
In the automotive industry, the shift in focus from car and brand to outcome or experience is challenging many of the established traditions of vehicle ownership and use. The switch in industry technology to telematics, mobility, and connected services is changing the ways consumers behave and ultimately opening up new avenues for automotive companies to grow. There are opportunities now for last-mile delivery, autonomous transportation, and electric vehicles among others. Automotive companies need to identify which of these new business models they can thrive in.
“With the plethora of new business opportunities comes opportunities for new talent,” noted Ellen Sasson, industry executive advisor for automotive and mobility at SAP. Companies also must be prepared to nurture diversity of talent, thought, creativity, and business models to elevate the employee experience.
Why Volkswagen Is in the People Business
Volkswagen Australia pinpoints customer experience as its most important business value, so it is launching a program around both customer and employee experience. Using predictive analytics tools helps the company identify experience gaps and make changes to enhance employee and customer satisfaction.
And here’s why customer experience is top of mind for the company: VW is continually bringing fresh products to the market, with something for everyone. Customers feel connected to their cars. The product is only half of the equation, Sasson explained, as she reminded attendees that VW is really in the people business.
To deliver the best customer experience, automotive companies can use business modeling tools to assess the success or failure of their new initiatives. Companies should seek strategic partnerships and investments to iterate and test new business models, then focus on what works best from a financial and a customer experience perspective.
“You can’t learn without execution,” advised Sasson. “You need people who are willing to pioneer those new business models, who can communicate and collaborate and agree on KPIs and standards.”
Achieving Operational Excellence in Auto Manufacturing
Though consumer habits and preferences will drive new forms of mobility and different ways to consume transportation, automotive companies must still manufacture vehicles in the most efficient way.
In a digital world, there is still a physical supply chain that’s critical to delivering an experience. Financial insight is core to business model disruption when tracking the management of warehouses, materials, and inventory, as well as customer spending and profit. Automating insights and continuous learning through data is the key to harnessing intelligent enterprise solutions. This is essential for companies to succeed in a rapidly changing environment.
To deliver the best efficiency, productivity, and profitability, automotive companies must have full insights into their assets throughout the value chain. One the greatest challenges companies face is to optimize the value chain to manufacture different types of vehicles simultaneously: classic, electric, and hybrid.
According to Hagen Heubach, director IBU automotive at SAP, automotive customers are focusing on five strategic priorities:
- Customer centricity
- Connected cars
- Mobility services
- Digital supply chain
- Changing and engaging the workforce
Integrating customer feedback into operational business is essential. “From a financial perspective, companies need to have full visibility of customer profiles, assets in the company, and vehicle profitability, and then be able to tie it all together by using predictive to take actions where needed,” Hagen stated. At the same time, integration of financial transparency and operational excellence is crucial to increase efficiency.
Don’t miss your opportunity to hear about trends in the industry from other automotive SAP customers at our virtual experience ASUG Best Practices: SAP for Industries in September 2020.