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Helping a global heavy construction company realize $5M in annual cost savings

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Client: A leading global heavy construction company
Region: Global
Industry: Automotive

Improving quoting efficiency and transforming engineering capabilities while innovating and digitizing product lifecycle management across all service parts

Client Challenge: The company wanted to modernize its product lifecycle management processes, accelerate time to market for new products, foster innovation, and reduce overhead IT operational costs.
 
Solution: Through a one-team approach, Capgemini implemented a comprehensive solution across the organization’s global manufacturing processes, which called upon deep expertise within applications management, innovation, and product lifecycle management.
 
Benefits:

  • A positive cost impact of $5 million annually from improved quoting practices
  • $235,000 in total cost savings within just three weeks
  • A 35% decrease in high impact tickets and an 11% reduction in overall ticket volume
  • Increased annual major releases from three to five, enabling the frequent introduction of new features and improvements
  • 33% increase in part acquisition and delivery velocity
  • 98% decrease in Hypercare tickets – indicative of higher customer satisfaction and reduced post-implementation issues
  • 14% reduction in part acquisition fail rate

The company is one of the world’s leading manufacturers of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and hybrid locomotives. The company’s operations span 180 countries and services some of the fastest growing industries in the heavy construction market, including construction, mining, agriculture, energy, and transportation.

The Product Support and Logistics Division (PSLD) was looking to enhance its operating profit after capital charge (OPACC) for service parts. Upon conducting an internal study, the company identified a significant issue: a lack of legitimate demand data at the time of quotation. The company’s team was seeking to address the root cause of this issue and optimize the process for identification, storage, and retrieval of demand data within the New Product Introduction (NPI) process. By introducing consistent and efficient practices, the company would improve quoting and reduce costs.

Additionally, due to the pressures of an ever-changing market, the Product Support and Logistics division sought to modernize its product lifecycle management processes to meet the demands of an increasingly digital and sustainable world. The company recognized the need to accelerate time to market for new products, foster innovation through the seamless integration of modern, digital product development tools, and reduce overhead IT operational costs. To accomplish this, the company sought out Capgemini’s deep industry knowledge and portfolio of capabilities to act as its business and technology transformation partner and better position the company for the future.

Unearthing tangible, transformative change with ADMnext

The company had been relying on its previous provider for product lifecycle management (PLM) and application management services (AMS). However, the company decided to open the services to a request for proposal (RFP) process to explore better alternatives that could meet their evolving business needs.

The primary objectives were to accelerate time to market for new products and foster faster innovation by seamlessly integrating hardware, software, and Internet of Things (IoT) aspects into product development. Additionally, the company was eager to reduce the total cost of ownership (TCO) for IT maintenance, which was leading to higher production throughput across Information Technology (IT), Engineering Technology (ET), and Operations Technology (OT).

Through a one-team approach, Capgemini implemented a comprehensive solution across the organization’s global manufacturing processes, which called upon deep expertise within applications management, innovation, and product lifecycle management. This expertise led to efficient project management frameworks using a Scaled Agile framework and a Product-oriented Delivery (POD) model to promote collaboration and streamline workflows.

This also helped position the company to adopt digital-twin and model-based system engineering, and better align its Business and IT. Altogether, the transformation included ITIL 4.0- based Application Management Services (AMS), Agile PLM projects, test automation, and PLM capability upgrades.

ITIL 4.0-based AMS were implemented for 84 applications within the Engineering IT landscape, covering a range of areas such as PLM, Certified Agile Essentials (CAE), Quality Management System (QMS), manufacturing, and material compliance. This enhanced the efficiency and reliability of the company’s IT systems. Meanwhile, Agile PLM projects improved the team’s agility and enabled a transition from a traditional waterfall model to a scaled agile framework with the adoption of DevOps practices. Additionally, the partners introduced a POD development model that promoted collaboration and streamlined workflows.

Utilizing test automation, the team has now automated approximately 4,000 test scripts to enable end-to-end testing for various processes. This has significantly reduced manual efforts and accelerated testing cycles. At the same time, the project team has used PLM capability upgrades to align with company’s ambitions for Digital Thread, Digital Twin, and model-based system engineering.