While most automotive OEMs and their supplier tiers are
struggling to reconcile their old ways of doing business with the
“new normal” economy, there is good news for those companies
willing to innovate and adapt their production models.
Driving Success in Automotive - JDA Software and Accenture
1. D r i v i n g S u c c e ss i n A u t o m o t i v e
2. D r i v i n g S u c c e ss i n A u t o m o t i v e
In the “new normal” landscape of the global automotive industry, both OEMs and suppliers are
struggling to manage a number of increasingly complex challenges:
• Continuing DEMAND UNCERTAINTY as consumer confidence ebbs and flows
• Ongoing cost pressures that force GLOBAL INVENTORY REDUCTIONS
• A shift from regional models to SELL ANYWHERE, BUILD ANYWHERE, SOURCE ANYWHERE supply chain
designs
• Competitive pressures to INNOVATE AND REFRESH vehicles and features at a much faster rate
• A lack of GLOBAL VISIBILITY throughout the supply chain, enabling all participants to respond quickly to
market shifts, supplier shortfalls and other issues
C r e at i n g a D y n a m i c ,
D e m a n d - D r i v e n S u p p ly Cha i n
While most automotive OEMs and their supplier tiers are
struggling to reconcile their old ways of doing business with the
“new normal” economy, there is good news for those companies
willing to innovate and adapt their production models.
Forward-looking supply chain leaders can achieve operating margin improvements of 15 to 20 percent, even
in an economic landscape that remains uncertain. The keys are tight synchronization of the entire supply chain
with demand signals, creating insights from shared data that drives decision making, and establishing a global
sales and operations planning (S&OP) process that promotes more agile execution and collaboration among
partners.
Working together, Accenture and JDA can help your business achieve this vision — and succeed in the face of
seemingly overwhelming challenges. By combining outstanding business acumen with proven technology
leadership, Accenture and JDA can help you master demand variability, link the entire supply chain to actual
market signals, optimize pricing and customer service, build a winning product portfolio, and manage capacities
and materials across regions, brands and platforms.
3. Th e A u t o m o t i v e S u p p ly Cha i n : I n c r e d i bl e
C o m p l e x i t y, I n c r e d i bl e Chall e n g e s
While every modern supply chain is complex,
the automotive industry faces special challenges.
Shifting from a regional sourcing and manufacturing
approach to a global production model means that today
automakers are struggling to manage supply chains that span
thousands of miles and thousands of suppliers, who may be
providing up to 20,000 distinct parts and components.
When faced with declining global sales, pressures to reduce
inventories, high levels of demand variability, the threat
of supply disruption and other challenges, it may seem
impossible for automakers to create a dynamic supply chain
that can respond with speed and agility.
However, automotive manufacturers and their suppliers are
forced to make transformative changes in order to remain competitive. Demand and supply complexities,
if not well managed, can result in lost sales, underutilized global assets and significant investments in
facilities, people, new products and other initiatives that fail to achieve a full payback. They also can result in
surplus inventories that need to be purged through customer incentives — which significantly impact profit
margins — or, conversely, inventory shortages that divert sales to a competitor.
Continuing Changes in the Automotive Landscape
Prior to 2008 Evolving Future
Industry Sales – USA example 17 million units 12-14 million units
Average channel inventory 70-80 days of supply 40-60 days of supply
Consumer demand variability Moderate Significant swings
Risk of supply disruptions Moderate Increasing
Average rate of product lineup refresh Every 6 years Every 2-3 years
Vehicle platform Regional Global
Sourcing model Local/Regional Global
5. S y n c h r o n i z i n g t h e Gl o bal S u p p ly Cha i n
With Demand: A Dynamic Response to
T o day ’ s Gl o bal Chall e n g e s
Accenture and JDA can help automotive leaders take their
operations performance to the next level, by synchronizing
every facet of the worldwide supply network with actual
consumer needs, based on a shared set of demand data.
With a unique blend of business process acumen and
advanced technology solutions, the Accenture/JDA team
can help your business synchronize the end-to-end supply
chain with a shared demand forecast, providing market
visibility that extends back through every supplier tier.
Having one view of demand allows capacities, inventories
and logistics along the lengthy global supply chain to
be planned with the necessary and synchronized buffers
to remain agile and responsive, while avoiding surplus
inventory, unused capacity and other inefficiencies that
drive up total supply chain costs.
6. By implementing flexible technology solutions that link demand and supply — and supporting those
advanced tools with high-impact, collaborative business processes — the Accenture/JDA team can create the
kind of dynamic capabilities that make a real financial and competitive difference:
Accurate, real-time forecasting. Transportation optimization. Inbound, outbound
By gathering and intelligently applying point-of-sale and even dealer-to-dealer transportation planning can
insights and other consumer data, Accenture and JDA can be optimized, based on an accurate view of localized
provide all supply chain partners with highly accurate, real- consumer needs and delivery priorities. Accenture and
time forecasts for both vehicles and individual product JDA can not only help you plan individual shipments in
features. the most cost-effective manner, but also rationalize your
entire transportation scheme against real market needs.
Truly global sales and operations planning. Based
on those shared forecasts, Accenture and JDA can work More effective pricing and promotions. Over the
to install a new collaborative, cyclical S&OP process past several years, consumers have come to expect
across the global supply chain that ensures all partners incentives when they purchase new vehicles. Accenture
are working with up-to-date information — and are and JDA can help ensure that both your base prices and
continually updating their plans as market needs shift. promotional incentives make good business sense and
result in long-term profitability.
Enhanced supplier collaboration and monitoring. In
today’s complex world, consumer demand is not the only Fact-based vehicle portfolio management. Today,
source of volatility. Accenture and JDA can help ensure vehicle models are being refreshed and replaced at
that the overall supply chain is synchronized not only a faster rate than ever before. Accenture and JDA
with demand, but also with materials shortages, supplier can partner with you to ensure that all your product
capacity issues, transportation cost development and portfolio management efforts — as
increases and other issues that create uncertainty on the well as your model mix — are based on up-to-date,
supply side. factual information about the changing needs of
consumers. By basing all product decisions on real-time
Global inventory optimization. Vehicles sitting on market data, you can minimize the risk associated with
a lot, unsold, might be the most visible inventory these significant investments.
challenge in the automotive industry. But, with up to
20,000 components in the average automotive supply More effective spare parts planning and
chain, excess parts inventories are an equally daunting replenishment. After the sale, spare parts represent a
challenge, threatening the profitability of every supply long-term source of supply chain complexity for OEMs
chain participant. By gathering and sharing forecast data and their supplier tiers. Accenture and JDA can help
at the product feature level, Accenture and JDA can help reconcile your spare parts planning and replenishment
minimize inventories at every production stage. activities with real-world demand data, driving improved
efficiency and profitability in this often-overlooked area
More efficient assembly. Just as Accenture and JDA can of the supply chain.
drive inventory efficiencies, they can maximize assembly
processes throughout the supply chain. Powertrains
and other systems can be built when they are needed,
creating cost efficiencies by maximizing the utilization of
facilities, equipment, employees and other assets.
7. W hy A c c e n t u r e a n d J D A T o g e t h e r
Accenture and JDA have worked with many global manufacturing leaders to achieve greater value and
increase agility in their worldwide supply chains. Together, these partners can help you create truly
dynamic operations by combining advanced technology solutions with the business strategies and process
improvements needed to maximize your return on investment.
Drawing on the extensive experience of 16,000 JDA Software Group, Inc., The Supply Chain
management consultants globally, Accenture Company®, is a leading global provider of innovative
Management Consulting helps clients identify and supply chain management, merchandising and
deliver value with pace, certainty and strategic pricing excellence solutions. JDA empowers more
agility. Accenture’s unique combination of skills, than 6,000 companies of all sizes to make optimal
approaches, assets and tools help develop and decisions that improve profitability and achieve real
operate scalable, efficient and agile business results in the discrete and process manufacturing,
processes to deliver immediate and long-lasting wholesale distribution, transportation, retail and
value. Operations that embody innovation and services industries. With an integrated solutions
operational excellence are vital to enhancing long- offering that spans the entire supply chain from
term profitability. By combining pioneering solutions materials to the consumer, JDA leverages the
with practical know-how, Accenture helps clients powerful heritage and knowledge capital of
align underlying process and operating models to acquired market leaders including i2 Technologies®,
support business strategies, link the supply chain Manugistics®, E3®, Intactix® and Arthur®. JDA’s robust
to the end-to-end value chain, and create flexible services offering, including complete solution
operations that enable rapid response to changing lifecycle management via JDA Cloud Services,
customer demands and market opportunities. provides customers with leading-edge industry
practices and supply chain expertise, lower total cost
of ownership, long-term business value, and 24/7
functional and technical support.
While the challenge of synchronizing your end-to-end supply chain
with market signals may seem daunting, Accenture and JDA bring
the unique combination of expertise needed to deliver rapid results,
without any business disruption as the transformation occurs. Working
in a collaborative manner, Accenture and JDA can custom-tailor a set of
technology solutions and high-impact business processes that meet your
own specific supply chain model and long-term strategic goals.
8. Is Y o u r S u p p ly Cha i n D r i v e n t o S u c c e e d ?
If maximizing your supply chain flexibility, agility and profitability are strategic priorities, you can begin the
transformation process by answering these five foundational questions:
• Have you appropriately segmented and optimized • Are there advanced forecasting technologies and
your global supply chain to align with real-time market decision-support tools in place that enable broad
demand? visibility and coordination across the supply chain in
• Do you and your key partners have the ability to take real time?
proactive, preventive and reactive action across the • Do you have the right partners, skills, production
supply network? strategies and transportation schemes to balance
• Do all supply chain participants have common customer satisfaction with long-term profitability?
visibility into real-world consumer demand signals?
Contacts:
Accenture JDA Software Group, Inc.
Allen Fujimoto 4-Color
Manish Govil
Senior Executive Senior Director
allen.m.fujimoto@accenture.com manish.govil@jda.com