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Integrated Business Planning

- 4 min read

The benefits of Integrated Business Planning in Automotive

The complex process of taking vehicles from design concept to the forecourt is based upon a multitude of decisions. To maximize profitability, suppliers, manufacturers, and dealers must drive efficiency throughout the process, and often the insight required to do this lies hidden in data.

In a previous blog we’ve explored what Integrated Business Planning is. Read on to find out how this approach, combined with business intelligence, is being used by leading automotive players to drive digital transformation, better decision-making, and greater financial returns.

What are the benefits of Integrated Business Planning for Automotive Suppliers?

Understanding the true cost of the design, manufacturing, delivery, and aftercare of automotive components is vital for ensuring efficiency throughout the process. This is impossible to achieve without a centralized view of accurate data and transparency of the impact of operations on other areas of the business.

IBP solutions overcome these challenges and create numerous benefits for automotive suppliers:

  • Activities such as quality control and production management can be monitored, cross-examined against the volumes required by the vehicle manufacturer and financial results, and planned in accordance with resource availability
  • A centralized view of the investment required to produce each component, including design, material, labor, and production costs, creates transparency and drives the bidding process, resulting in a fast response to tenders
  • Forecasted demand for spare parts, in line with on-the-road vehicle numbers and their ages, can help to ensure the most efficient use of resources and stock levels

As a unified solution for Business Intelligence and Enterprise Performance Management, Board provides the centralization needed to achieve this integrated approach. Read our ZF case study to find out how this leading automotive supplier has created a single Management Information System business-wide, used to inform strategic and operational planning activities across all divisions.

What are the benefits of Integrated Business Planning for Automotive Manufacturers?

Carmakers and other vehicle manufacturers are no strangers to efficiency, with complex production lines requiring precise metrics and speedy execution. Each station, department, and division deals with masses of data and works to tight production schedules, with huge volumes of data stored in ERP software, but there is often lack of data visibility across the entire business.

The introduction of Integrated Business Planning processes:

  • Makes it easy to understand the financial impact of operational activities by identifying the relationship between the two areas, enabling users to plan R&D projects accurately, in budget, and with the right skills and resources
  • Simplifies the process of working out the true cost of vehicle production, the resulting price lists per country, and the profitability of each product line, by pulling together data from multiple sources automatically without the need to rely on spreadsheets from each department
  • Enables budgeting to be standardized across each division via workflow processes, creating transparency, control, and a faster picture of the financial position of the business, together with detailed investment analysis
  • Provides visibility of factors such as labor utilization and machine availability in order to match the capacity and resources required for the production of new vehicles, in a Rough-Cut Capacity Planning approach

For more insights into the benefits of IBP for automotive manufacturers, see our case study for Volkswagen Mexico, in which the Finance team have reported an increase in efficiency from 57% to 91% since standardizing activities with Board.

What are the benefits of Integrated Business Planning for Automotive Dealers?

From the Dealership perspective, everything hinges on the ability to meet sales targets. With the possibility of many showrooms and brands within larger dealership groups, this becomes a challenging process. Sales information sits in spreadsheets and is pulled together for analysis and planning by sales managers and finance teams. Integrated Business Planning ensures the profitable operation of each garage within the group by enabling business managers to:

  • Keep track of new and used vehicle sales against targets in real time, across all dealerships and brands, and model the impact of promotions, discounts, and commission on results
  • Standardize the budgeting and planning process with one accurate view of all data, controlled by workflows to ensure everything is completed on time
  • Optimize performance by comparing repairs, customer satisfaction, and resources data to identify where improvements can be made in both operational efficiency and service delivery
  • Gain clarity over servicing and repair activities, including stock levels of components, resource allocation of mechanics, and sales of parts against manufacturers’ targets
  • Gain a real-time view of new car orders, used car and pre-registered vehicle stock across branches, sales commission figures, and more in a single, user-friendly dashboard

As consumer preferences shift and the automotive market becomes increasingly competitive, the need for greater visibility and control is ever more apparent. Whichever stage of the automotive supply chain you sit in, there is room for Integrated Business Planning to drive the digital transformation of processes, create greater visibility, and enable more effective decision-making to take place.

To find out more about how Board can support this process, request a demo today.

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Augmenting carmakers, suppliers and car dealers' decision-making processes

Learn more about BOARD's capabilities, which are being utilized by leading automotive organizations such as Volkswagen, Renault and ZF Group.