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BMW GROUP BUILDING EFFICIENT MATERIAL REQUIREMENTS PLANNING WITH SOA QUICK FACTS Industry Automotive Revenue €50.6 billion Employees 96,230 Headquarters Munich, Web Site www.bmw.com SAP® Solutions and Services SAP’s approach to service-oriented architecture (SOA), latest enhancement package for the SAP® ERP application Implementation Partner Business Transformation Services group of the SAP Consulting organization, SAP Custom Development organization
BMW Group is known around the world for building automobiles of unmatched quality. Applying this same standard of excellence to its internal processes, the automaker used service-oriented architecture (SOA) to reengineer its material requirements planning operations. Today, an SOA-enabled cockpit provides BMW a centralized view of planning data from across locations – helping the company lower material handling costs and improve vendor management.
SAP Business Transformation Study Automotive
Key Challenges • Provide a centralized view of planning data • Gain cross-location visibility of supply and demand • Standardize supply processes across plants • Eliminate multiple points of with single vendors • Enable innovative supply chain management strategies • Reduce time and cost of ongoing IT development cycles
Why SAP Was Selected • Long-standing strategic partnership with SAP • Opportunity to influence and contribute to standard SAP software development • SAP’s extensive service-oriented architecture (SOA) know-how • SOA’s for complex environments of cross-system applications • Best integration in an SAP software–dominated environment • Availability of modeling tools for fast and flexible software development
Implementation Best Practices • Developed 15 new enterprise services • Used reference implementation for knowledge transfer • Leveraged extensions and innovative services available with latest enhancement package for the SAP® ERP application • Synchronized planning application development schedule with SAP ERP upgrade • Facilitated development with coaching from the SAP Consulting organization
Low Total Cost of Ownership • Gained faster realization of maintenance requests and process changes • Facilitated future projects with implementation of standard functions and services • Reduced consulting costs by building in-house development capabilities • Leveraged reference implementation to lower the cost of skills development
Financial and Strategic Benefits • Centralized view and control of planning data • Reduced costs for material planning operations • Improved productivity of BMW planners • Improved employee satisfaction • Established SOA foundation for future application projects
Operational Benefits • Improved efficiency of material requirements and supply planning • More than 50% reduction of redundant vendor s • 16% reduction of duplicate material part numbers • Improved coordination of planning efforts across locations • Better inventory control with common phase-in and phase-out processes
Using SAP’s approach to SOA helped BMW build a single cockpit that consolidates material requirements planning data from its different systems. This aggregated view was simply not available to its planners before.
Driving Excellence
started with a typical use case scenario to establish a reference implementation BMW Group has been producing quality and set the model for later phases. Based automobiles and motorcycles for nearly on that model, BMW could then complete a century, and its famous blue-and-white development on its own. The collaboralogo is recognized around the globe. tion between BMW and SAP proved very Known for exacting engineering and successful. Collectively, the team develperformance standards in its iconic oped a number of new enterprise servicvehicles, the German automaker es to address specific requirements and expects nothing less from its manufacimplemented an integration layer to help turing processes. This includes ensuring ensure parallel processing of material optimal efficiency in the critical supply requests for production plants. chain operations that continuously fuel the company’s production plants with Building Efficiencies with a Centralized View needed material and components. Until recently, BMW planners focused on the material requirements of a single production plant. Each site maintained individual supply strategies, and planners had a limited cross-location view of supply and demand. As a result, locations often managed separate relationships with common vendors. The company recognized that, to enable a more innovative supply chain management strategy, it needed a consolidated view of planning data. BMW decided to implement a central planning cockpit using service-oriented architecture (SOA) based on the SAP NetWeaver® technology platform and leveraging the latest enhancement package for the SAP® ERP application.
Collaborating for Success As this was the first SOA project of its kind at BMW, the automaker worked closely with the SAP Custom Development organization and the Business Transformation Services group of the SAP Consulting organization. The team
SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, and other SAP products and services mentioned herein as well as their respective logos are trademarks or ed trademarks of SAP AG in and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or ed trademarks of Business Objects Software Ltd. in the United States and in other countries.
the planning functionality required by the engine plants is already covered by the company’s SOA-enabled production plant solution.
Smoothing the Road for Future Development
The success of this project has laid the foundation for continued agile SOAbased development at BMW. Indeed, several follow-up efforts are in the works. This includes additional cockpits for engineering and container management, as well as enhanced supply chain collaboration based on flexible quantity With a central application in place, agreements. The company also intends BMW was able to take a more efficient to use the SAP NetWeaver Business approach to material requirements planProcess Management component to ning. Today, each BMW planner is respon- further improve process quality and effisible for a group of materials across all ciency. BMW executives are confident German production plants. The new con- that the company’s SOA adoption will trol center enables the planners to freely help ensure fast and cost-effective realaccess and manage data from multiple ization of all these strategic initiatives. systems. This new strategy is paying off. By managing material centrally – and eliminating multiple local s with the same supplier – BMW has reduced duplicate part numbers by 16% and decreased the number of managed vendor s by more than 50%. By consolidating vendor interactions and standardizing across sites, the automaker can use common processes for operations such as the phase-in of new parts and the phase-out of obsolete material. After consolidating the planning information from its four German auto facilities, BMW is now extending the project to include its engine plants. It is a logical next step. BMW estimates that 90% of
50 101 826 (10/12) ©2010 SAP AG. All rights reserved.
www.sap.com /sap
All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.
BMW Group is known around the world for building automobiles of unmatched quality. Applying this same standard of excellence to its internal processes, the automaker used service-oriented architecture (SOA) to reengineer its material requirements planning operations. Today, an SOA-enabled cockpit provides BMW a centralized view of planning data from across locations – helping the company lower material handling costs and improve vendor management.
SAP Business Transformation Study Automotive
Key Challenges • Provide a centralized view of planning data • Gain cross-location visibility of supply and demand • Standardize supply processes across plants • Eliminate multiple points of with single vendors • Enable innovative supply chain management strategies • Reduce time and cost of ongoing IT development cycles
Why SAP Was Selected • Long-standing strategic partnership with SAP • Opportunity to influence and contribute to standard SAP software development • SAP’s extensive service-oriented architecture (SOA) know-how • SOA’s for complex environments of cross-system applications • Best integration in an SAP software–dominated environment • Availability of modeling tools for fast and flexible software development
Implementation Best Practices • Developed 15 new enterprise services • Used reference implementation for knowledge transfer • Leveraged extensions and innovative services available with latest enhancement package for the SAP® ERP application • Synchronized planning application development schedule with SAP ERP upgrade • Facilitated development with coaching from the SAP Consulting organization
Low Total Cost of Ownership • Gained faster realization of maintenance requests and process changes • Facilitated future projects with implementation of standard functions and services • Reduced consulting costs by building in-house development capabilities • Leveraged reference implementation to lower the cost of skills development
Financial and Strategic Benefits • Centralized view and control of planning data • Reduced costs for material planning operations • Improved productivity of BMW planners • Improved employee satisfaction • Established SOA foundation for future application projects
Operational Benefits • Improved efficiency of material requirements and supply planning • More than 50% reduction of redundant vendor s • 16% reduction of duplicate material part numbers • Improved coordination of planning efforts across locations • Better inventory control with common phase-in and phase-out processes
Using SAP’s approach to SOA helped BMW build a single cockpit that consolidates material requirements planning data from its different systems. This aggregated view was simply not available to its planners before.
Driving Excellence
started with a typical use case scenario to establish a reference implementation BMW Group has been producing quality and set the model for later phases. Based automobiles and motorcycles for nearly on that model, BMW could then complete a century, and its famous blue-and-white development on its own. The collaboralogo is recognized around the globe. tion between BMW and SAP proved very Known for exacting engineering and successful. Collectively, the team develperformance standards in its iconic oped a number of new enterprise servicvehicles, the German automaker es to address specific requirements and expects nothing less from its manufacimplemented an integration layer to help turing processes. This includes ensuring ensure parallel processing of material optimal efficiency in the critical supply requests for production plants. chain operations that continuously fuel the company’s production plants with Building Efficiencies with a Centralized View needed material and components. Until recently, BMW planners focused on the material requirements of a single production plant. Each site maintained individual supply strategies, and planners had a limited cross-location view of supply and demand. As a result, locations often managed separate relationships with common vendors. The company recognized that, to enable a more innovative supply chain management strategy, it needed a consolidated view of planning data. BMW decided to implement a central planning cockpit using service-oriented architecture (SOA) based on the SAP NetWeaver® technology platform and leveraging the latest enhancement package for the SAP® ERP application.
Collaborating for Success As this was the first SOA project of its kind at BMW, the automaker worked closely with the SAP Custom Development organization and the Business Transformation Services group of the SAP Consulting organization. The team
SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects Explorer, and other SAP products and services mentioned herein as well as their respective logos are trademarks or ed trademarks of SAP AG in and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or ed trademarks of Business Objects Software Ltd. in the United States and in other countries.
the planning functionality required by the engine plants is already covered by the company’s SOA-enabled production plant solution.
Smoothing the Road for Future Development
The success of this project has laid the foundation for continued agile SOAbased development at BMW. Indeed, several follow-up efforts are in the works. This includes additional cockpits for engineering and container management, as well as enhanced supply chain collaboration based on flexible quantity With a central application in place, agreements. The company also intends BMW was able to take a more efficient to use the SAP NetWeaver Business approach to material requirements planProcess Management component to ning. Today, each BMW planner is respon- further improve process quality and effisible for a group of materials across all ciency. BMW executives are confident German production plants. The new con- that the company’s SOA adoption will trol center enables the planners to freely help ensure fast and cost-effective realaccess and manage data from multiple ization of all these strategic initiatives. systems. This new strategy is paying off. By managing material centrally – and eliminating multiple local s with the same supplier – BMW has reduced duplicate part numbers by 16% and decreased the number of managed vendor s by more than 50%. By consolidating vendor interactions and standardizing across sites, the automaker can use common processes for operations such as the phase-in of new parts and the phase-out of obsolete material. After consolidating the planning information from its four German auto facilities, BMW is now extending the project to include its engine plants. It is a logical next step. BMW estimates that 90% of
50 101 826 (10/12) ©2010 SAP AG. All rights reserved.
www.sap.com /sap
All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.
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