SAP-integrated tolerance line check

Competition in the automotive supplier industry is intense. In order to strengthen and expand their own position in the market, automotive suppliers such as Harman must constantly develop new solutions such as digital systems for the in-car experience and continuously improve existing products. Equally important are efficient, transparent and largely automated business processes in all areas. Harman, a global technology company and an independent subsidiary of Samsung Electronics since 2017, has been using the SAP ERP/ECC 6.0 business solution as its central IT platform for years. However, the standard SAP ERP software has a number of process gaps, particularly in electronic logistics processing with OEMs. Harman closes this gap with SAP-based add-ons such as the Speedi platform from WSW Software, which integrates seamlessly with SAP.

Automated tolerance lines

The IT service provider from Gauting has already introduced several Speedi solutions at the technology company. These include the Speedi OEM solutions, the Speedi shipping monitor and, most recently, the Speedi tolerance line check for monitoring delivery call-offs from OEM customers for violations of tolerance limits. "The use of this Speedi solution is of strategic importance, as it automatically determines whether an EDI delivery call-off falls below or exceeds contractually agreed tolerance limits with regard to the delivery quantity as soon as it is entered into SAP. This means added value for us as a supplier, as one of our German premium OEM customers alone sends around 400 call-offs a day that need to be checked. The rapid checking and evaluation of the data ultimately also benefits our OEM customers - a classic win-win situation," says Helmut Koelbl, Senior Manager Business Planning Tools at Harman Automotive.

More precise IBP requirements planning

The concrete benefits for the OEM supplier are extremely diverse. In contrast to the past, a deviation from the accepted quantity tolerance is now determined as soon as the call-off is received. This enables more precise demand planning, which takes place in the SAP Integrated Business Planning (IBP) cloud solution, and production planning can be adjusted at an early stage. This reduces the risk of high additional costs being incurred, for example because goods that have already been produced have to be run through production again in order to be equipped with the latest software version, or because products have to be destroyed.

Fast ROI

Thanks to Speedi, Harman can also notify OEM customers within the contractually agreed, sometimes extremely short response times if a call-off exceeds the agreed tolerance limit. For the German OEM customer mentioned above, for example, these are between one and ten working days, depending on the demand horizon. "This is another invaluable advantage, as we avoid expensive additional payments by adhering to the deadlines. As the annual savings for so-called premium freight alone are in the millions of euros, the costs for the purchase, operation and maintenance of the Speedi tolerance line inspection have paid for themselves within a few months," says Helmut Koelbl happily.

SAP scheduling agreement comparisons

In addition, the automatic checking of tolerance limits relieves the burden on customer support staff, who previously had to perform this repetitive task manually in Excel and using SAP delivery schedule comparisons. They now have more time for other important tasks. Conversely, Harman's OEM customers also benefit from using the Speedi tolerance line check. The data generated by the solution is evaluated by the supplier using an analytics tool (Qlik) and forms the basis for various KPIs, such as call-offs received in relation to call-offs "outside tolerances". In this way, Harman can quickly and reliably provide customers with information on whether tolerance limits have been breached and how call-offs have developed over a certain period of time. This benchmarking in turn provides OEMs with important starting points for optimizing their own call-offs, adhering to contractually defined tolerance limits and avoiding additional costs.

The Speedi tolerance line check, which is implemented worldwide for all Harman plants, is currently being used in full at the production site in Hungary. The planning department there is very satisfied with the solution. In particular, a Speedi-Monitor for displaying tolerance violations, including subsequent selective e-mail notification, which Harman played a key role in developing, makes the end users' work much easier. It clearly displays selected tolerance violations so that the necessary measures can be initiated immediately.

Helmut Koelbl draws a positive conclusion: "The IT-supported tolerance line check of OEM call-offs in Speedi increases efficiency and transparency in this process enormously, and therefore also the accuracy of SAP-IBP requirements planning. By notifying customers in good time in the event of a tolerance violation, we avoid expensive contractual penalties and achieve significant cost savings, thanks to which the Speedi solution quickly pays for itself. In return, our OEM customers receive important information that enables them to stay within the agreed tolerances. At the same time, we strengthen our position in discussions with customers."

Minimum and maximum purchases

Step by step, the Speedi tolerance line check, which Harman has so far used to check the call-offs of some German and US OEM customers, is now to be rolled out to as many OEM customers as possible. The introduction of an IT solution tailored to Harman's specific requirements and integrated into SAP is also firmly planned, and the experts at WSW Software have been entrusted with its development. In future, it will indicate whether a customer exceeds or falls short of agreed minimum or maximum purchase quantities in a certain period of time. This is an important indicator for preventing both overcapacity and bottlenecks in production.