Automotive

Dynamic ERP (Enterprise Resource Planning) Data Stream from Munich to Mexico T-Systems runs the entire ICT environment for the international automotive supplier Sumitomo Electric Bordnetze GmbH (SEBN).

The Sumitomo Electric Bordnetze GmbH (SEBN) based in Wolfsburg-Hattorf supplies cable loops to automobile manufacturers worldwide. In Volkswagen’s new plant in Puebla, Mexico, the company supplies critical components for the electrical and electronic equipment of the VW Jetta. The Volkswagen AG uses this plant to manufacture the most popular European brand automobile in the USA and the best-selling VW model. The VW Jetta is also in high demand in Canada, Central America and South America, but under the brand name Vento (Argentina, Chile) or Bora (Mexico).

Cable loops enter the production process after the vehicles have been painted and before the floor carpeting is installed. The pre-assembled cable harnesses must be on the assembly line at this point or else the entire Jetta manufacturing process will come to a halt. This is why suppliers are building plants close to the manufacturing site to expedite supply. Yet proximity alone is not enough to ensure timeliness. To make sure just-in-time delivery runs smoothly, Sumitomo needs effective and fail-safe ICT systems for resource planning. These systems tell the supplier when and how many cable loops must be on the assembly line and what specifications are required. Because VW orders are often placed at short notice, the information provided by the ERP systems must be reliable.

When SEBN received the order for the Jetta, the company spent about six months finding a suitable site in Puebla and building up its infrastructure before the first cable loops were delivered to the assembly line. Since Sumitomo has already been using SAP successfully in its financial department in Wolfsburg, the company decided to replace its entire ERP system with SAP software. The Puebla plant was to be the first that worked entirely with SAP.

In the course of implementing SAP, Sumitomo opted to outsource all of its information and communication technology in the Puebla plant and choose T-Systems as its partner. The Telekom subsidiary, which has about 600 employees in Mexico, provides support primarily for customers from the automotive sector and offers exceptional expertise regarding the special requirements of this industry. As a result, Sumitomo receives all its ICT services from a single source and does not have to coordinate various service providers. As a result, the company can concentrate on its core business and does not need to maintain its own IT department in Mexico. T-Systems staff members are available on site to answer any questions that users may have.

T-Systems first had to work together with Sumitomo and SAP to adapt the ERP application to the requirements of the supplier in only four months. For example, the master data from the old system had to be migrated to the new one. The business client subsidiary of Deutsche Telekom also configured the finance-related parts of the software to ensure compliance with the local regulations in Mexico.

The ICT service provider has been running the solution from a data center in Munich since November 2007. From this location all ERP data flows back and forth between Puebla and Wolfsburg over an MPLS (Multi-Protocol Label Switching) network. Users can access this data with thin clients. To ensure reliability, the network linking the submarine cables and land-based connections on both continents is designed as a redundant system. MPLS also allows data to be prioritized, which means business-critical information is given the right of way over the network and data lines will not get congested.

VW orders all the cable loops it needs in Puebla using an EDI system (Electronic Data Interchange) that T-Systems operates for Sumitomo in Mexico. The application automatically forwards electronic requests to the SAP solution. The orders offer different levels of detail ranging from long-term previews of yearly and monthly requirements to vehicle-specific tasks. These detailed orders are made two weeks before delivery and contain the exact time of installation and specifications for custom vehicle fitting. For instance, Jettas with air conditioning or park distance control systems require different cable loops than Jettas with other extras.

The final step is the so-called sequence call with the exact time and assembly line number. All data are saved in the SAP system. Hence, Sumitomo knows which component is going into which cable set at all times. If necessary, employees can quickly order components per mouse click. They can also use the EDI system to communicate with their suppliers.

T-Systems provides Sumitomo with as many SAP resources as the company needs for day-to-day business. For example, the need for additional capacity increases for year-end closing since employees are querying information at the same time from numerous modules in the SAP system. If the need for system resources suddenly increases, say, when VW ups demand by a large factor, then T-Systems can increase computing power in less than a few hours. In this case significantly more data can flow through the SAP system than on a normal business day. The ICT experts use monitoring systems to view the system load in real time and can quickly respond at any time when necessary. Sumitomo does not have to reserve server capacity for the occasional peak load. At the end of the month Sumitomo receives a transparent invoice listing all the bits and bytes it used. It only pays for the SAP services that actually were needed and had been used.

Sumitomo also gains costs advantages by integrating all processes into a uniform system. The central office in Wolfsburg is thus immediately informed of all transactions occurring in Mexico. This means that production and procurement can be perfectly coordinated. Sumitomo is therefore planning to successively install the standard SAP solution in all other Bordnetze locations throughout the world. T-Systems is intended to run the SAP solution from Munich for all future production routes as well. The Puebla example is also attracting the attention of other small to medium-sized automotive suppliers, who have already asked T-Systems about a comparable solution.