IN FOCUS
Boosting Profits & Cash Flow by Digitizing Sales
8 Competitive Advantages for Automotive Suppliers.
> 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
"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) 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.
(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.
(1) Avoiding typical Excel mistakes
- 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
(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.
(3) Gaining transparency of over- and underpayments from part price allocations
Numerous investments are allocated across many parts in multiple projects, making it impossible to track over- and underpayments with Excel. The Digital Automotive Amortization Tracker provides 100% automized transparency and enables corrective actions for volume-related discrepancies.
(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.
(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.
(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.
(1) Automated processes save time
- 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.
CONCLUSION
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.
