Background:

An exterior supplier with numerous tools faced significant challenges due to a lack of transparency about open tools and other investments. This issue resulted in late or even forgotten tool invoicing and underpayments in amortizations. The absence of a structured system led to several disadvantages and challenges to be solved:

Challenges

• No Transparency in Tool Management: Lack of visibility into open tools and upcoming payments.

• No Timely Preparation for PPAP Green: Lack of visibility prevented timely preparation for PPAP approval.

• Forgotten Invoices: Tools were sometimes completely forgotten to be invoiced.

• Financial Uncertainty: No knowledge about financial headroom and investment possibilities.

• Amortization Issues:

  • Error-prone amortization calculations with unclear values, interest rates and volumes. 

  • Lack of control of actual volumes led to unrecognized underpayments.

Solution

The solution came with Digital Automotive's One-Time Payments (OTP), which provided comprehensive tracking and transparency:

• Tool Tracking: Tools are now tracked from the RFQ phase until reimbursement is received, including impacts from change management.

• Amortization Tracking: Amortizations are tracked with automated inputs in the price list, including start and end dates, and automatic calculations with part volumes.

• Change Management input: Change requests from customers are seamlessly integrated in amortizations and reimbursements

• Automated Cash-Flow Reports: These reports create the necessary transparency for controlling to inform treasury and project management, ensuring preparation for PPAP green.

• Real-Time Data Availability: Sales managers benefit from real-time data availability, eliminating the need for ad-hoc reports.

• Comprehensive OTP Management: The advantages extend to all other types of OTP, such as quick savings and R&D reimbursements.

• End-to-End Process: The supplier manages all project-related investments with DA OTP, gaining clear visibility of all project-related cash flows. Reporting is available in real-time and 100% automated.

Results

• Enhanced Control and Transparency: Transitioned from having no visibility to complete control and transparency over tools and other payments.

• Improved Financial Management: Treasury and controlling departments can now forecast and manage upcoming payments effectively. Including quick-saving reports which are just one click away.

• Proactive Investment Management: Clear visibility of financial headroom and investment possibilities.

• Increased Financial Recovery: Identified and recovered significant amounts of money owed by customers based on amortizations.

• Comprehensive Project Investment Management: Gained an end-to-end process for managing project-related investments, with real-time, automated reporting.