The better the question
How does a complicated journey from A to Z become as clear as ABC?
Find out how a new data-driven model is giving everyone visibility into the journey of vehicles through complex customization processes.
Thankfully, Henry Ford’s adage that people could choose a car in "any color…so long as it is black" has long been consigned to the dustbin of history. But our age of mass customization poses tough challenges for businesses taking a customer-centric approach. EY worked with one of the world’s leading luxury automotive companies to overcome some of the industry’s most complex supply chain issues in order to enable the speedy delivery of customized vehicles to customers.
Whenever you’re signing papers in a car dealership and you hand over the deposit for that new car you’ve designed to some very exact specifications, you’ll experience a strange mixture of excitement and impatience. Excitement at the prospect of getting behind the wheel: that new car smell, all those new features. Impatience, because you likely have to wait a while for the car to be customized to your specifications and to be delivered to your dealer. Any unnecessary delays will be frustrating, especially if your dealer doesn’t have the information to keep you in the loop about where the car is, what work remains to be done on it, and when you’re going to get the call to come and collect it.
Unfortunately, the entire industry has an issue managing the efficient journey of vehicles from manufacturing plants, through the customization process, delivery to dealers and finally into the expectant hands of the customer.
Legacy systems have been developed over time and struggle to meet new customer expectations. There’s often still a reliance on paperwork and manual processes. Communication is spotty. And there’s little real-time data available to provide dealers with the visibility they need to let customers know what’s happening with their vehicles.
Most importantly these inefficiencies cause delays, impact customer satisfaction and place an unnecessary financial burden on the automotive companies who incur considerable expense building, shipping and customizing vehicles. The sooner those vehicles can be delivered to a dealership, the sooner those costs are recovered. And faster delivery drives better margins.
The better the answer
Re-engineering the process for a best-in-class customer experience
We designed a new experience: taking advantage of new technologies and creating a better experience for everyone.
EY worked with the US sales and distribution arm of one of the world’s leading luxury automotive companies. Cars are shipped from the parent company’s manufacturing plants across the globe. On arrival in the US those cars enter a Vehicle Processing Center (VPC).
These centers inspect the cars. They make any necessary repairs. They update software. They accessorize and customize the vehicles according to buyer specifications. They clean and perform a final inspection. And they do all this on a vast scale. Thousands of cars, all with unique needs, spread out over huge lots, moving location based on where different tasks are performed, and destined for multiple dealerships and countless customers.
The sequencing of these actions must be carried out in a precise and seamless way if every car is to be moved through the process efficiently and at pace. The existing system simply couldn’t be streamlined in a way that would meet the needs of an always-on, real-time world, and give dealers and customers the visibility they expect.
A new process needed to be designed, taking advantage of new technologies and creating a better experience for everyone involved from VPC employees, to dealers and their customers.
Cutting just that one day from the process would save the luxury car brand large amounts of working capital.
We worked on a holistic vehicle processing improvement program. We studied all processes and identified opportunities to improve on the process side – with the goal to reduce their VPC through-put by one day.
Human at center: putting smart technology in the hands of people on the ground
Every vehicle in the VPCs requires a specific set of actions to be performed. But where is the car located right now? And what’s the next task that needs carrying out? Who needs to execute that specific task? How to be sure those actions have been performed? Who needs to be informed?
EY designed and digitized the whole process. By implementing SAP Vehicle Logistics we gave workers the ability to use a "visual cockpit" to determine how best to sequence arriving cars based on real-time yard layout. Spencer T Farr, Consulting principal at Ernst & Young LLP, mentions, "We worked on a holistic vehicle processing improvement program. We studied all processes and identified opportunities to improve on the process side – with the goal to reduce their VPC through-put by one day."
Handheld scanners, mobile apps and barcode technology all contribute to the creation of a fully connected, data-driven experience that puts valuable information in everyone’s hands.
This transparency now gives full visibility into every vehicle’s journey through the process so dealers are fully aware of what’s happening with their customer’s orders and they can communicate with those customers to better manage expectations. Letting a customer know that their new rims are currently being installed is a great way to maintain excitement and build anticipation. This ability to engage the customer in what was once an opaque process offers new opportunities to improve customer satisfaction and brand loyalty.
Innovation at scale: A cloud-based solution improves productivity and performance
Being able to access real-time, location and task specific data doesn’t just help improve communication. The new cloud-based solution also enables the automotive company to track labor technicians’ work order times across multiple VPCs. This is improving workforce accountability and provides management with concrete, objective metrics.
The legacy system was essentially a mainframe that was dedicated to each site, meaning each site worked independently of all others. With our SAP solution, everything's on the same platform. This enables better cross business unit reporting and improved visibility of results across multiple Vehicle Processing Centers.
Technology at speed: From launch to operational in days
Supply chain logistics are notoriously complex. Reengineering a new process, implementing new technologies and onboarding an entire workforce can seem overwhelming. But by working with EY, the automotive company was able to implement the new VPC system at pace and with limited downtime.
Farr describes a smooth and effective transition, "When we went live with the first vehicle processing center — remember it had never been done before — we expected it to be month-end before we’d get back to volumes. We were back at volume on day five."
The better the world works
Real-time data drives improvements at every step of the journey
Creating a best-in-class digital experience to overcome complex logistical challenges.
"The legacy system was essentially a mainframe that was dedicated to each site, meaning each site worked independently of all others. With our SAP solution, everything's on the same platform. This enables better cross business unit reporting and improved visibility of results across multiple Vehicle Processing Centers.", says Kyle Sorensen, Managing Director with Ernst & Young LLP.
As consumers we are all familiar with what a best-in-class digital experience looks like. This solution demonstrates just how effective it can be to apply the same approach to complex logistical processes.
This combination of EY’s VPC solution and the automotive company’s expertise has drastically reduced the turnaround time between vehicles arriving at port and shipping to customers. It has also dramatically improved the customer and dealer experience.
Sorensen notes: "From the first day the new system began running, our client exceeded the targets they’d planned on how many vehicles they wanted surveyed and shipped. Already, they've been either hitting, achieving, or exceeding their targets."