Driving supply chain agility with order simulation

Leverage advanced technologies such as GenAI to predict future market demand in an automotive business that builds complex prodizucts to order.

OEMs know they must offer build-to-order vehicles alongside build-to-stock, in order to establish a global presence and cater to diverse market segments. That’s particularly noticeable in the electric vehicle (EV) segment, currently evolving from a buyer’s market to a seller’s one.

Until now, though, build-to-order has presented major challenges in terms of predicting the parts required.

Many of these challenges arise from the huge number of variants that are needed when customers personalise their cars by selecting their preferred combination of options. The challenges are aggravated by the fact that OEMs need to start forecasting parts requirements before the market has even seen the product – and by the volatility of highly competitive markets.

The result is that, too often, an OEM’s eventual call-offs are quite different from the forecasts given to suppliers 2-3 months earlier. These mismatches can lead to loss of orders because of delayed delivery, lack of trust along the automotive supply chain, and wasted resources.

So, especially when a product has many part variants, accurate forecasting is essential. But legacy approaches usually fail when confronted with build-to-order complexities.

“Predicting future demand for automotive parts poses significant challenges for manufacturers – particularly at a time when many vehicles are being built to order to satisfy customer demand for individualised experiences. Order Simulation for Automotive overcomes those challenges, enabling manufacturers to communicate their needs to suppliers in a timely and accurate manner. This SaaS solution built on SAP technology demonstrates the value of our data-driven approach to innovation. And it’s just one of the ways we’re empowering automotive companies to optimise their supply chain through advanced technology.”

Laurence Noël,
Global Automotive Industry Leader, Capgemini

“Order Simulation for Automotive is an excellent example of an industry specific solution built on the SAP Business Technology Platform. It shows how the industry cloud approach gives customers access to innovative solutions tailored to the needs of their industry – solutions offered by partners such as Capgemini, but also by SAP itself. Where there are difficulties in reliably forecasting demand for vehicle option configurations, this sophisticated and user friendly simulation tool should be considered.”

Hagen Heubach
Global Vice President Industry, Automotive Business Unit, SAP

Fortunately, there’s now a new type of forecasting solution: one that works across the whole lifecycle, integrating different techniques (qualitative and quantitative) to produce accurate forecasts at each stage. The solution can address the needs of the entire organisation, not just one function. Technologies such as Gen AI are harnessed to offer this advanced functionality in a user-friendly and seamless manner.

This new approach, called “order simulation,” yields a range of benefits including:

• Closing the gap between forecasts and actuals
• Proactive optimisation in the factory
• Better use of resources, enhancing automotive sustainability
• Enhanced supplier trust
• Shaping your future market
• Better use of employee time

It all adds up to a significant competitive advantage for the OEM. To learn about this approach, please download our new PoV today. Then contact our experts to explore how your organisation could transform the automotive supply chain using Capgemini’s Order Simulation for Automotive, an innovative SaaS solution built on the SAP technology platform.