Volkswagen Drives Productivity and Profitability with SAP

Leading Car Manufacturer Leverages SAP(R) for Automotive Solutions to Streamline Global Engineering, Production and After-Sales Operations

WOLFSBURG, Germany, Dec. 4 -- SAP AG today announced that the Volkswagen Group, one of the world's leading automobile manufacturers, is leveraging the SAP(R) for Automotive portfolio of solutions to revolutionize its engineering, production and after-sales processes across its global enterprise. In one of several SAP deployments, the carmaker has launched a first-of-its-kind system in the automotive industry -- based on mySAP(TM) Product Lifecycle Management (mySAP PLM), the company's TI-Syncro system for electronic bills of materials is helping the company achieve massive cost savings across engineering and production operations. In a further project, SAP(R) solutions seamlessly link production, financial and logistics processes to increase transparency and efficiency across motor assembly operations. Additionally, mySAP(TM) Customer Relationship Management (mySAP CRM) is helping the company streamline spare parts fulfillment and collaboration across its European Volkswagen (VW) dealership network.

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"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 - Driving Productivity with Consistent, Complete and Timely
   Information

The launch of TI-Syncro (Technical Information-Synchronized), 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-90's 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 clearly 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 easily identifying which components are identical for different models, fewer types of parts can be produced in higher volumes -- and thus at lower costs.

  First-Class Service Across European Dealership Network to Meet Customer
   Demands

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

  Streamlining Assembly with Integrated Production, Logistics and Financials
   Solution

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 seamlessly linked in a single system, creating increased transparency and efficiency across all operations. Implemented by Novasoft, a special expertise partner for SAP for Automotive, the integrated SAP system has drastically reduced errors by eliminating redundant, manual data entry between procurement, customs, production and financial processes. Each motor produced now carries a bar-code serial number and is carried in a handling unit container. This allows the company to track the product seamlessly throughout its life cycle, 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.

"The Volkswagen Group's success with SAP for Automotive solutions further underlines our commitment to helping our customers master their unique business challenges," said Claus Heinrich, executive board member, SAP. "SAP solutions are helping the Volkswagen Group manage its mission. By working with such leading companies, SAP further deepens its expertise of the auto industry's unique requirements, ensuring that SAP for Automotive continues to deliver the powerful set of tailored capabilities necessary to help companies succeed in this rapidly changing, competitive global market."

About SAP

SAP is the world's leading provider of business software solutions. Through mySAP(TM) Business Suite, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. The unique core processes of various industries, from Aerospace to Utilities, are supported effectively by SAP's 23 industry solution portfolios. Today, more than 20,500 customers in over 120 countries run more than 67,500 installations of SAP(R) software. With subsidiaries in over 50 countries, the company is listed on several exchanges including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com/ )

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