08: Avoiding loss-making projects: How automotive suppliers stay profitable with a system

Price pressure is enormous in the automotive supply industry. This makes it all the more alarming that individual loss-making projects can be enough to jeopardize the earnings of an entire company. And the worst thing about it: many of these projects are already recognizable as loss-making in the award phase - they are acquired anyway.

How do such decisions come about? And above all: how can loss-making projects be systematically avoided? The answers lie in a structured, digital sales process - as made possible by the Digital Automotive platform.

The actual cause: Mistakes in the RfQ process

The majority of loss-making projects do not occur in series production, but rather during the acquisition process. To be more precise: during the quotation calculation.

Typical causes are

• Non-transparent or incorrect calculations

• Incorrect pricing assumptions

• Poor coordination between sales, costing and project management

• Lack of control and approval processes

The result: projects that generate sales but cost money in the long term - and therefore block valuable resources, tie up capacity and impact the operating result.

The consequences are serious

A single loss-making project can

• "overlap" several profitable projects

• jeopardize strategically important customer relationships

• undermine the trust of management and shareholders

Particularly dramatic: the actual loss often remains invisible for a long time because the causes can no longer be traced in the early phase. In many companies, the classic RfQ process is not systematically documented - and therefore not verifiable.

The solution: a digitally managed acquisition process

Lost projects are not destiny - they are the result of a lack of transparency and error-prone processes. These risks can be significantly reduced with a consistently digitalized quotation process.

A modern sales framework, such as the one offered by Digital Automotive, comprises four central levers:

1. Creating transparency throughout the entire acquisition process

All relevant information - from the initial customer inquiry to the final calculation - must be digitally documented and accessible. This is the only way to identify deviations, understand decisions and evaluate offers on a sound basis.

Digital platforms enable end-to-end RfQ transparency here:

• Complete documentation of customer requirements

• Version history of calculations

• Central data storage for all departments involved

2. Systematically establish the 4-eyes principle

One of the most effective measures against errors is the classic dual control principle - not as an informal process, however, but as a bindingly documented and system-supported one.

In concrete terms, this means

• Every assumption relevant to costing is checked and approved

• All decisive steps (e.g. price approvals, technical assessments) are digitally signed off

• Decisions are traceable and audit-proof

This not only improves the quality of quotations, but also protects the sales department from "going it alone" or making assumptions without a sound basis.

3. System-side safeguarding of the calculation basis

Incorrect calculation factors - such as raw material prices, machine costs or exchange rates - are a common reason for incorrect quotations. To prevent this, these factors must be centrally maintained and systemically validated.

In practice, this means

• Use of valid, centrally stored values for all quotations

• Automatic plausibility checks and warnings in the event of deviations

• Seamless transfer of the approved values to the CBDs (Customer Business Documents)

This ensures consistency between sales data and series implementation - a decisive lever for profitability.

4. Standardized quotation approval with digital signature

At the end of the process is the final quotation approval - and this must also be structured, traceable and controlled. A digital offer approval with an electronic signature from all relevant stakeholders ensures this:

• Binding nature

• Clarity about responsibilities

• Traceability for subsequent reviews or audits

Only if this final instance functions reliably can risks be identified before the contract is awarded and losses avoided.

Digital Automotive: the solution for loss-free growth

The mechanisms described above are fully integrated into the Digital Automotive platform. As the leading solution for Strategic Sales Planning & Sales Management in the supplier industry, it offers

• A complete digitalization of the RfQ process

• Standardized workflows with 4-eyes principle

• Central calculation factors with system validation

• Digital approvals with signature function

• Seamless documentation of all quotation decisions

This not only makes sales more efficient, but above all strategically controllable and economically secure.

Conclusion: control creates profit

Loss-making projects do not occur in series production, but during the awarding process - and are avoidable. What is needed is systemic control, digital transparency and clear responsibilities. Only then can sales become a profitable growth driver.

With a platform like Digital Automotive, this is exactly what can be achieved. It turns quotation preparation into a strategic, fact-based process - and ensures that your company not only grows, but also earns.