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S&P Global Mobility Data in Digital Automotive



Boosting Profits by Digitizing Sales

8 Competitive Advantages for Automotive Suppliers.

Executive Summary

The automotive supplier market is highly competitive with suppliers being constantly in the survival mode. All areas for profit improvements have to be leveraged. Sales Management is an area with huge potential to improve profits. Digital Automotive offers a holistic approach to boost automotive supplier profits in 8 business-critical areas. 


Digital Automotive Supplier Benchmarks:

> 15% of annual sales
by active Claim Management
> 8 % pts. EBIT
by profit-focused Change Management
100% accurate prices
by compliant and automated processes
100% One-Time-Payments invoiced on time
by a E2E monitoring system
> 95% plant utilization and growth in profitable markets
by real-time Sales Planning
80% strategic hit rate
0% loss makers
by transparent Acquisition Management
25% savings in sales operations
by integrated and automated processes
Top performers are attracted and retained
by a state-of-the-art digital environment


    How does sales digitization impact profitability?



    Transforming sales through digitization enhances the efficiency, effectiveness, and transparency of automotive suppliers.

    Digitization empowers automotive suppliers to cultivate a culture of performance, implement data-driven decision-making, and guarantees compliant, error-free and efficient processes:

    Lebenlauf Bild Erik Reiter
    "Achieving top performance in sales management is key to increase profits of automotive suppliers."
    Erik Reiter
    25 years Automotive Supplier-Management (Sales -> CEO); Sales Consultant for Strategy and Processes; Co-Founder Digital Automotive

    (1) Better processes

    A boost in efficiency and avoiding mistakes is the goal of digital processes.

    Automation must be cutting-edge in the sales management of automotive suppliers. By eliminating the need for manual copy and paste, effortlessly gathering input from internal and external data sources without extensive searches, ensuring easy access to required documents, facilitating seamless collaboration, and generating automated real-time reports, digitization offers a comprehensive solution for enhancing operational efficiency.

    Avoiding mistakes through compliant processes is crucial, and the era of error-prone Excel sheets is behind us. Nowhere is this more vital than in the business-critical field of pricing.


    (2) Better decisions

    Making well-informed decisions based on data and facts is key for navigating the right course. Digitization ensures the real-time availability of accurate information precisely when needed. 

    Undoubtedly, improved decision-making invariably translates to better outcomes.


    (3) Better performance

    To enhance profits, it is essential to design performance-centric processes in Acquisition-, Change-, and Claim Management. Digitization guarantees that the entire organization operates in alignment with these profit-driven processes, focused on improving the Key-Performance-Indicators (KPIs).

    Establishing a culture geared towards profitability involves making the outcomes (KPIs) transparent and accessible in real-time, ensuring that high performance is evident to all. 


    Every facet of sales management and sales planning can be digitalized with the objective of increasing profitability. This article highlights the 8 competitive advantages gained by digitizing sales:



    Active Claim Management: Receiving compensation for every contract deviation


    Over the past few years, Active Claim Management has evolved into a pivotal process in the sales management of automotive suppliers. The objective is to seamlessly navigate through the entire lifecycle of a claim, starting from its detection, moving through the stages of definition, calculation and negotiation, and culminating in settlement and invoicing. The emphasis is on optimizing claim performance throughout this comprehensive process.

    (1) Detecting all potential claims

    Digitization plays a crucial role in automating the detection of claims. The three primary categories of claims—volume, foreign exchange (FX), and material contract deviations —can be identified automatically through digital processes.  This automated approach not only enhances efficiency but also ensures a more timely and accurate identification of potential issues in these critical claiming areas.





    (2) Compliant claim process until cash-in

    Successful claim management is an end-to-end process, from the initiation of a claim to the actual receipt of cash. Digitization ensures that Sales Managers work according to these procedures. The best part: claim management reports are generated fully automated based on standard processes.



    (3) Management Focus: Prioritizing High-Value Claims

    Through claim management reports, managers gain a consolidated and standardized overview of all open claims. These reports encompass crucial details such as claim status, amounts categorized by different criteria, and sort options based on customers or regions, along with projected cash-in. Real-time accessibility empowers swift decision-making and escalation when necessary.





    (4) Boosting Claim Performance

    The results of the claim process are seamlessly automated in real-time, revealing projects where top performance is consistently achieved. This fosters a healthy competitive environment that motivates sales managers to strive for greater accomplishments.




    Profit-Focused Change Management


    Change management is the money-making machine for automotive suppliers. Every technical change has a commercial impact that must always focus on increasing profitability.

    (1) The basis: correct calculations 

    Digitization ensures that all changes undergo the same process. Using the correct calculation scheme (cost breakdowns) and actual factors and surcharges are the basis for pricing the change.


    (2) Pricing: Focus to increase profitability 

    Every change demands a focus on pricing, as profits hinge on the pricing strategy. It's crucial to raise awareness and draw attention to the outcomes of the change. Utilizing an online profit calculator that factors in volumes can provide a clear assessment of the financial impact.




    (3) Cultivating a Change Profit Performance Culture

    Establishing a culture where change management is synonymous with a focus on increasing profits is essential. Aggregating individual changes allows for an overview of the overall outcomes in specific projects, customers, products, or regions. Positive competition fosters a concentrated effort on changes, making profit generation a natural behavior.

    Therefore, reporting on change profit developments is crucial, and digitization ensures real-time insights into the success of changes.





    100% Accurate Prices


    Ensuring accurate pricing hinges on having compliant and automated processes. The complexity of cost break-downs, the multitude of parts, and the constant changes necessitate a database-driven approach.

    (1) Avoiding typical Excel mistakes

    Eliminating error-prone Excel price lists marks a significant milestone in the prevention of mistakes in price management.
    Typical mistakes in price management which is based on Excel are:
    • Copy and paste errors:
      • Transfer of prices from change or claim management into the price list
      • Transfer of prices after award of business or at SOP from project to serial team
      • Transfer of prices to ERP system
    • Errors in formula
    • Using outdated factors or surcharges
    • Missing price history

    Employing a standardized price list from the Request for Quotation (RfQ) phase until the End of Production (EOP) in a centralized database is the solution.


    (2) Avoiding price reduction mistakes

    Many automotive suppliers give Life-time Reduction (LTA/LTC) also for price components where they do not need to. Typical examples are mandated materials, amortizations or logistics. An effective digital solution ensures that these specific price components are automatically excluded from LTA/LTC, preventing unintentional reductions in prices.




    100% One-Time Payments Invoiced on Time


    Comprehensive tracking of all direct reimbursements is essential to guarantee the timely processing of payments for tools, research and development (R&D), and other investments.

    (1) An end-to-end monitoring system

    Implementing an end-to-end monitoring system for all one-time payments, spanning from the Request for Quotation (RfQ) phase until the funds are deposited into the bank account, represents a significant stride in proactive cash control. A digital system prevents the oversight of any potential invoices, addressing a common issue that is more frequent than one might anticipate.


    (2) Being prepared to receive PPAP green on time

    Knowing right in time when tooling invoices have to be ready is important to put project management attention on achieving PPAP green.


    (3) Active cash management by having an overview over the cash-flow

    Sales teams take the responsibility of ensuring timely receipt of all agreed one-time payments. On top of that, delivering a clear picture of upcoming quick savings to the finance department can be challenging when dealing with decentralized Excel files. In a digitized sales solution, a complete overview of all past and upcoming project-driven cash-in and cash-out is just a click away.





    Fully utilized plants and growth in profitable markets


    Informed decision-making is key to grow in the right markets. In the current disruptive business environment, the foundation for success lies in flexible, real-time sales planning.

    (1) Sales digitization solves the challenges of real-time sales planning



    (2) Unleashing the power of AI to grow in the right markets


    Utilize AI to identify underutilized plants and present strategic targets that align seamlessly with your production capacities. In instances where your growth rate lags behind the market, AI can detect this and offer insights into potential opportunities to maintain your market share at the desired level.








    Winning strategic targeted business and avoiding loss-makers

    Establishing the right strategy serves as the cornerstone, but the true objective lies in its successful realization.

    (1) Focus on profitable strategic targets


    Before receiving RfQ data, proactively identify and visualize strategic targets. Involve the entire team in assessing capacities and resources, utilizing digitization to give all relevant persons access to these targets. The automatically generated reports from this digital process can serve as a solid foundation for management meetings focused on strategic targets.


    (2) Transparency in the RfQ phase: Avoiding loss-makers


    Transparency in the RfQ phase is critical for automotive suppliers to avoid significant losses. While general profitability isn't usually an issue, certain loss-making projects in the portfolio can detrimentally impact overall results. A transparent acquisition and RfQ process helps in preventing such costly errors. Implementing digital signatures from responsible management on standardized decision sheets ensures accountability and informed decision-making.





    Efficiency gains by automated processes

    A deeply integrated system, equipped with automated processes and reports that require no manual effort, significantly enhances the efficiency of sales departments.

    (1) Automated processes save time

    Easy-to-use sales workflows are designed with maximum automation, ensuring efficiency:
    • Seamlessly integrate data from various sources, minimizing manual input.
    • Automatically generated reports directly derived from the workflows save time and effort in report preparation.
    • Input from changes to your price list is done automatically.
    • Automated compilation of customer price breakdowns


    (2) Data availability just a click away

    Data is readily accessible whenever you need it, located exactly where you anticipate it to be. For sales personnel who spend considerable time rummaging through documents in outdated archives, a digital sales system offers a significant benefit. This system allows for the efficient storage and easy retrieval of all data and documents.


    (3) Data input minimized

    If manual data input is necessary, this is done just once and used multiple times. The times are gone, when you fill the same data in 10 different Excel sheets for several purposes. A deep integrated system is taking advantage of data availability and uses it wherever possible, whenever needed.




    Top Performers are Attracted and Retained


    Working in a state-of-the-art environment is what top performers expect. 

    (1)  State-of-the-Art Environments for Top Performers

    A state-of-the-art work environment is crucial for attracting and retaining top talent, offering advanced technology. These spaces not only provide the tools for high performance but also foster a culture of creativity and continuous learning. In such environments, top performers thrive, driven by dynamic and forward-thinking settings.


    (2) Top performers deliver top results

    It's widely accepted that superior talent leads to superior results. For automotive suppliers aiming for higher profit margins, becoming appealing workplaces for these top performers is essential.





    Generating higher profits is possible with Digital Automotive

    In the competitive automotive supplier market, "Digital Automotive" is an indispensable ally, offering a holistic approach to enhance profits in all business-critical sales areas.

    By digitizing sales, automotive suppliers can vastly improve efficiency, effectiveness, and transparency, crucial for thriving in this cutthroat environment. This transformative technology enables suppliers to foster a performance-driven culture, adopt data-driven decision-making, and ensure compliant, error-free processes.

    Embracing every aspect of sales management and planning through digitalization directly contributes to increased profitability. Consequently, "Digital Automotive" not only promises but delivers on generating higher profits, making it a vital tool for automotive suppliers aiming for success.


    Experience the Next RFQs and SOPs Powered by Digital Automotive?

    In over 25 years of automotive supplier sales management, we have learned the benefits of digitization. Discover an improved process experience with Digital Automotive. We are happy to share our expert knowledge with you.