cartrade.white paper

ShapingBusiness Networks

Car Trade in the Information Age

Car Trade

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possible of their questions on the subject ofmobility. The Business Model of the Infor-mation Age allows to react to these chal-lenges. Modern information systems andcommunication technology enable the inte-gration of the services offered by the part-ners involved in the supply chain acrosscompany boundaries. This offers individualbusinesses the opportunity to concentrateon their respective core competences and atthe same time to provide the customer witha higher level of service.

In order to achieve this integration, theinternal business processes within the indi-vidual companies must be optimized. Onlythen can cross-company collaborativeprocesses be set up that will ultimately formthe basis of a comprehensive supply ofproducts and services.

Collaborative processes foster mutual trustbetween the partners involved in the supplychain a worthwhile challenge: the imple-mentation of cross-company processesguarantees long-term competitive advan-tages for car trade companies and increas-es their efficiency and profitability.

Management Summary

The worldwide liberalization of the markets,profound political influences and frequentnew technical developments present cartrade businesses with new challenges all thetime. Faced with these challenges, manufac-turers, importers, wholesalers and dealersare forced to subject their business modelsto critical questioning and to adjust them.

The disappearance of traditional barriers totrade and increasingly customer-friendlylegislation are opening the markets to newcompetitors, but at the same time they arealso enabling businesses in the motor indus-try to expand into new markets themselves.Thanks to global competition, margins arecoming under pressure; concentration in themarket is proceeding rapidly. The develop-ment of new electronic components andtelematics services is shifting the balance inthe competitive relationship between manu-facturer, importer, wholesaler and customer.The customers are becoming more demand-ing. They expect to find more than just acontact person from whom they buy a carand who will provide the necessary servic-ing for them. They expect a competent part-ner who is able to answer as many as

The Information Management Group

WhitePaper Car Trade

Contents

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I. A Changing Industry

Political TrendsMarket Specific Trends Technical Developments

II. Car Trade in the Information Age

Cross-Company Collaboration Increases Success

Cross-Company Collaboration in Practice

Three Steps to Success

III. There is a lot to be done

We Can Meet Your Needs

The Information Management Group (IMG)

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Euro countries. There are already signs thatthe Euro is becoming a standard of compari-son even in countries like Switzerland orGreat Britain. Thus some manufacturers havealready announced their intention of stan-dardizing prices Europe-wide presumablynot at the lowest level.

This liberalization is likewise reflected in therevision of the Block Exemption Regulation(BER) No. 1475/95, which was passed bythe European Commission in July 2002, andwhich fundamentally changes the legal con-ditions for brand exclusive car sales. Thus onthe one hand franchise dealers can make useof the end of the BER to include a second or athird brand. On the other hand it is now alsopossible for suppliers from outside the indus-try for example large supermarket chainswith their millions of customer contacts totry to penetrate the distribution systems of themotor manufacturers with multi-franchiseconcepts.

Laws are becoming more customer-friendly.This starts with the extension of warrantyperiods, includes the granting of manufactur-ers warranties to the purchase of used cars,and extends to the End-of-Life Vehicles Direc-tive which has been in force in Germanysince 1 July 2002: new vehicles that are reg-istered more than 18 months after the direc-tive came into force must be accepted backand disposed of at no charge to the owner.The costs arising from this will be borneentirely or in large part by the manufacturers,the importers and the dealers.

I. A Changing Industry

Whereas the car trade was able to enjoy aboom around the turn of the millennium con-trary to expectations at present it is comingunder increasing pressure. All businesses inthe industry are being forced to rethink bothby political and market specific trends and bynew technical developments. All the partici-pants in the supply chain manufacturers,dealers, importers and wholesalers arebeing challenged to examine their portfolio ofproducts and services thoroughly and, in somecases, to make fundamental adjustments.These changes bear risks for their businesses especially for those businesses that fail to con-front these challenges, or confront them toolate or with the wrong strategy. Those whichadjust in time to the coming changes, however,can transform the risks into opportunities andso strengthen their position in the market andmake it secure in the long term.

Political Trends

The dominant trend in political developmentthroughout the world is the progressive liber-alization of the markets. This applies not onlyto the car trade, but to all industries and allcompanies that are active across nationalboundaries. For the motor industry, globalliberalization and the opening up of the mar-kets means that local importers are losingtheir virtual monopoly position. At the sametime it opens up to importers and wholesalersthe opportunity of expanding internationally. The introduction of the Euro is leading to aclear leveling out of prices in the car tradethroughout Europe. This is not only true of the

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Car Trade

Market Specific Trends

Market liberalization, greater price trans-parency and more customer friendly laws however much they may be welcomed fromthe point of view of the market economy lead to the weakening of the traditional linksbetween customers and their dealers andtheir brand. In order to counter this devel-opment, the relationship with the customermust be cultivated and intensified. The motorindustry is in the fortunate position of beingable to tackle the Relationship Managementfrom two angles: firstly, directly through thecustomer, with the help of Customer Rela-tionship Management (CRM) and secondlythrough the vehicle, with the help of a specif-ic Vehicle Relationship Management (VRM).

VRM aims to collect information on thewhole life cycle of the vehicle and to make itavailable in the entire sales and serviceorganization. Knowledge of the completelife history of a vehicle is the basic condi-tion necessary if you aim to offer worldwidewarranties and effective services, and areprepared to take back vehicles at the end oftheir working life. In addition, VRM pro-vides information about the customer, whichserve on a database for CRM systems. Sofar, the heterogeneous and often inade-quate IT systems in use by the various part-ners in the supply chain have been anobstacle to the creation of an efficient VRM.Thus it is a regular occurrence that after-sales vehicle information only comes tolight sporadically, is only collected on alocal basis and is updated only at irreg-ular intervals.

As in other industries, in the motor industrytoo there is a powerful tendency toward con-centration. The reasons for this are not onlypolitical and economic, but in part also tech-nical in character. For example, the quality ofvehicles is continually improving. This leadsto longer intervals between services, fallingutilization of garages and shrinkage of thespare parts business. At the same time, thedifferent businesses along the supply chainattempt to increase their market strength byeliminating stages in the sales route or open-ing up new paths of distribution.

Only about twenty per cent of vehicle compo-nents are produced by the vehicle manufac-turer. Therefore the supply industry is becom-ing increasingly interesting as a source forthe independent car components trade. Themarket for the car components trade hasshown no significant growth for a number ofyears, in fact sales have stagnated. The con-sequences have been felt throughout theindustry: new forms of distribution are com-ing into being, concentration and cutthroatcompetition are leading to a streamlining ofthe market. Furthermore, some componentswholesalers are taking a vertical approach tothe market. They are not only acting aswholesalers and spare parts suppliers fortrade customers; they also sell direct to theretail customer and offer their own garageservices.

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A Changing Industry

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At the same time, the continuously growingvariety of models is raising the level ofdemands on the qualification and flexibilityof the personnel and the garage. Thesedemands can only be met through increasedinvestment and in many cases only throughamalgamation.

The individual requirements of particular cus-tomer segments are coming increasingly to the fore. Significant potential is opening upthrough marketing directed toward specificcustomer segments, for example Fleet Manage-ment and Leasing. The share of fleet and leas-ing vehicles is rising annually by ten per cent.Today some forty per cent of new cars sold areregistered to companies.

Further significant developments are evidentwhen we consider the individual stages of thesupply chain:

Trends among Manufacturers

The integration that has already developedbetween the motor manufacturers and the sup-pliers is also being sought on the distributionside. Here there are solid economic motives, ascost pressures are forcing the manufacturers inthe direction of further rationalization. Nowthat production has been successfully slimmeddown and the procurement processes havebeen optimized, controllers are focusing onrationalization of the channels of distribution.Today, distribution costs account for about athird of the recommended retail price of a newcar. These costs include, in addition to sales

promotion and advertising, the dealers profitmargin. In order to cover a greater part of thesupply chain, manufacturers are increasinglytaking a vertical approach to the market.

With the introduction of performance-orientedprofit margin systems, a quiet revolution hastaken place in car distribution and in the cartrade. The reduction of the basic discounts andthe premiums paid for individual elements ofperformance represent an attempt by the man-ufacturers to increase their control over theirfranchise partners in the trade. In this way theyare seeking not only to achieve greater fairnessin rewarding performance, but also to optimizethe implementation of brand strategies for theirspecific make of vehicle.

Trends among Importers

Independent importers are feeling increasedpressure from manufacturers, who areendeavoring to play the part of the importerthemselves, or at least to exercise a decisiveinfluence. To strengthen their own marketposition, importers are increasingly taking avertical approach to the market and are buy-ing out dealers. This often occurs in a situationof generational change in family businessesor businesses managed by the proprietor. Inthe spare parts trade, importers and whole-salers who are tied to brands are experienc-ing powerful competition from the independ-ent wholesale car components trade. Similar-ly, suppliers are forcing their way into themarket with slogans like spare parts in origi-nal manufacturers quality.


Car Trade

7Trends in Trade

The tendencies toward concentration in themotor industry are having a particularlymarked effect on trade. Manufacturers areaiming for a thinning out of the dealer net-work and pushing for large-scale areas ofmarket responsibility, to be run by big all-inclusive car trade firms. The complete amal-gamation of several car firms to form onelarge joint operation is recommended bymany motor manufacturers, indeed theysometimes even demand this. As a conse-quence, both the number of independentgarages and the number of tied garages willfall even more in the next few years.

Observers anticipate that dealers will con-centrate on core functions, e.g. the sale ofnew and/or used cars, garage servicing etc.In this way a reduction in administration costscan be achieved and ultimately the profitmargin can be maintained. Regional amal-gamations will still ensure that the customerhas access to the full range of service.

In addition, the garages are also feeling theeffects of technical progress. Cars arebecoming less likely to need repair, and inter-vals between customer services are gettinglonger. The importance of mechanical repairsis declining, as cars become ever more com-plex and demand high investment in technol-ogy and the qualification of staff. Only largegarages can afford such investments.

Due to the competition from specialized low-price garages (e.g. exhaust and brake ser-vice), the trend from family business to large

A Changing Industry

medium-size garages can only accelerate.Garages operate either as service enterprisesoffering everything relating to mobility, orthey specialize in individual low-cost servic-es. Here are already plans being discussedfor Repair and Maintenance Workshopswith low hourly rates.

In all this, it should never be forgotten that thedealer has a key role to play in the entiresupply chain. After all, it is the dealer whoknows the customer, and it is the dealer whosells the vehicles.

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The End Customer

Developments in the area of e-business per-mit end customers to inform themselves onlineat any time about prices, products and ser-vices of any brand and any dealer. The resultis a customer who is becoming more self-con-fident. He is better informed in the sales dis-cussion, has higher expectations with regardto service and wants individual attention. Notleast, he is harder to tie down, as he finds agreater and greater choice of suppliers tohelp him meet his needs. For the end cus-tomer, the garage is no longer just the pointof sale, but a place where he finds all theservices necessary to ensure total satisfactionof his need for mobility. Accordingly, dealersand importers will have to develop into com-prehensive providers of mobility.

Technical Developments

Studies suggest that in future some ninety percent of developments in cars will be in the fieldof electronics. The growing proportion of pro-grammable components in vehicles will bringabout far-reaching changes to existing pro-cesses in after-sales. Here, the motor industryfinds itself increasingly confronted with problemsthat were originally known only to the comput-er trade. Different components work with dif-ferent versions of the software that are not nec-essarily compatible with each other. Thisstrengthens the influence of the manufacturers,as they have the knowledge of the relevantcomponents and configurations.

In the field of telematics some rethinking hasbeen going on. In the past, the motor indus-try has toyed with the idea of offering their

customers, with the aid of communication ter-minals, services such as traffic information,weather forecasts or hotel reservations.Such services are already efficiently offeredby the telecommunications industry andhighly specialized content providers. Newbusiness models are now under discussion,which envisage the purchase of these orother services through amalgamations withtelematics service providers from outsidethe industry.

The acceptance and expansion of telemat-ics services is, however, very much depend-ent on the development and quality ofvoice-controlled elements, which, unlikemanual operation, do not significantlyinterfere with driving. The focus of futuretelematics developments lies increasinglywith car-centered services that offer endcustomers, dealers and manufacturersadditional advantages and increase cus-tomer loyalty: for example, a real-timevehicle diagnostic program that informs thecustomer and the garage about irregulari-ties in the cars performance and if nec-essary can direct the customer to agarage. The Internet too plays an increas-ingly important role in the car trade. Itoffers an extremely low-cost infrastructurewith global 24-hour availability, band-widths are increasing, communication costsare falling and the end customer can becontacted as a business partner. All thisopens up an enormous potential for salessupport through the Internet and for Internetsupported distribution in the motor industry,as, for example, shown by the success of

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Car Trade

9used car exchanges. In connection with Por-tal Technology, the Internet enables compa-nies in the motor industry to offer centralaccess to their services. The question of whichpartner offers these services is irrelevant. Aportal bundles the offerings of all the part-ners involved and offers the user a homoge-neous access to these services.

Currently, IT infrastructure also presents achallenge that may strongly influence themarket. The IT systems that are installed bymanufacturers, importers and dealers have inmany cases become obsolete and are nolonger adequate to handle the trends anddevelopments described above.

II. Car Trade in the Information Age

To be able to continue acting successfully inthe market despite the many challenges, com-panies in the car industry must critically ana-lyze their previous business models and adaptthem to the demands and opportunities of theinformation age. The necessary instrumentsfor this are offered by the Business Model ofthe Information Age (BMIA), developed by


The Information Management Group (IMG), together with the Institute for InformationManagement of the University of St. Gallen.

In contrast to business models that focus pri-marily on increasing the value of the compa-ny (shareholder value), the BMIA simulta-neously considers the customer perspective(customer value). All the processes along asupply chain are looked at from the view-point of the customer that is, the purchaserof the service offered by the company in the given process. The customer need notnecessarily be the end customer, i.e. the onewho comes at the end of the supply chain.

Credit scoring Insurance Auto-Journal Nav.services Fleet management

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Banking Traffic info Parking systems Car hire Police

Business Collaboration Infrastructure

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Cross-Company Collaboration Increases Success

The aim of collaborative processes is to put theindividual partners along the supply chain in aposition to concentrate on their core compe-tences. This enables them to offer a productand service portfolio which permits the compa-nies concerned to ensure they have a competi-tive advantage over already existing or poten-tial new competitors also in the long term.

There is nothing trivial about this task, as ittakes place in what has traditionally been anarea of conflict, in which each member of thesupply chain is striving to increase their influ-ence. While the manufacturers in the motorindustry are increasingly trying to get closer tothe end customer, the dealers and wholesalershave a well-founded interest in holding on tothe customer themselves.

Many companies have a tendency to eliminateindividual links in the supply chain, in order toserve the customer as directly as possible andtake the profit margins saved in this way forthemselves.

Cross-company processes, on the other hand,demand openness on the part of the individualparties; for example, to guarantee reliabledelivery times, warehouse stocks and theprogress of production must be disclosed.

The customer loyalty that all companies aim foris only possible if a customer is offered the opti-mal level of service. However, this is only possi-ble when the companies involved concentrateon their respective core competence.

The BMIA can be applied both to internalprocesses (such as the request for a certaincomponent) and for cross-company process-es (the import of a vehicle) and finally to theentire supply chain from the supplier, via pro-duction and distribution, to the return of thevehicle at the end of its life.

Crucial in all cases is that the customer pro-cess takes center stage. To do business suc-cessfully in the information age, a companymust understand the customer process andaddress it purposefully. In concrete terms, thismeans that a company must recognize andunderstand the wishes and needs of its cus-tomers, and make an effort to answer theseneeds and wishes in its portfolio of services.

Now, the needs of a customer of the motorindustry are not limited to the purchase of atechnically advanced vehicle. The customeralso expects service and support with regis-tration, maintenance or ultimate disposal ofthe vehicle. If they are to meet these wishes,the various companies along the supplychain must work closely together and developcross-company collaborative processes.

Only through collaborative processes the cus-tomer can be offered the services whichretain his loyalty to a brand in the long term.At the same time they open up a significantpotential for economy along the entire supplychain. Modern information and communica-tion technology enables the realization of col-laborative processes.


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Thus the core competence of dealers isundoubtedly individual customer service onsite. Importers and wholesalers have the corecompetence of supporting the dealers wherethey are and taking care of the necessarybrand marketing. Finally, the core compe-tence of manufacturers is production and theproduct knowledge that goes with it.

Concentration on their core competencesenables manufacturers in the motor industryto develop, for example, improved productswith greater market acceptance and to con-cern themselves with better product informa-tion such as configurators and documenta-tion. It permits importers and wholesalers tooptimize their canvassing of the regionalmarket. Finally, the dealer can expand andoptimize the service that he offers.

The customer receives optimal product qualityand product information. At the same time,delivery times and customer care can be fur-ther individualized. This will increase his sat-isfaction and therefore also his loyalty tohis brand and his garage.

Cross-Company Collaboration in Practice

The optimization potential that collaborativeprocesses in the car trade can access, is bestdemonstrated by an example. Let us assumethe ideal situation, namely that the partici-pants in the supply chain work together andhave implemented the necessary IT architec-

ture for this. Collaborative processes supportthe flow of goods, services and informationover the entire supply chain. Much in ourexample may appear visionary today, andyet all the processes and functions describedare available today and can easily be putinto practice.

The Customers Request...

The example starts with an everyday sce-nario. A customer walks into a dealersshowroom and has a look around. In discus-sion with the dealer the customer mentionsthat he would like to have his present vehiclevalued and trade it in for a new car.

After a brief inspection of the customers cur-rent vehicle, the dealer is able to give the val-uation as requested. He is supported by theUsed Car Calculation Service with which hisDealer Portal provides him. This service canbe offered by a wholesaler, an importer or amanufacturer and makes it possible for usedvehicles to be offered for sale not only in thepremises of the respective dealer, but alsothroughout the region and beyond. At thesame time, the dealer enters the data relatingto the new customer and his enquiry into hisDealer Management System. In this way he isable to call up details of the current status ofthe relationship to his new customer and hisvehicle at any time.


Credit Facilities and Purchase...

Subsequently, the customer and the dealerdiscuss the available credit facilities forfinancing the purchase of the new car. Heretoo, the Dealer Portal plays a decisive role,as it also offers interfaces to the leasingcompany or the companys or importersbank. In this way a financial package canbe agreed there and then and confirmed onthe spot. At this point too, the partners inthe supply chain must disclose their internalprocesses. Only in this way is it possible foron-line access to the respective financialservices provider to produce direct approvalof a package.

The sales discussion finally ends with thecustomer ordering the vehicle he has cho-sen. The order is placed and before thecustomer leaves, the dealer can inform himthat the manufacturers have already includ-ed his order in their plan.

Delivery...

Naturally, during the waiting period thecustomer would like to be kept informed ofhow the production of his vehicle is pro-gressing. This service too can easily beoffered. With the aid of a Status TrackingService on the Internet he can check thecurrent status of the vehicle he has orderedat any time.

In order to ensure that the Status TrackingService works efficiently, it may, in somecases, be advisable to involve third-partyservice providers such as road haulagecontractors or logistics companies.

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The Offer...

After the dealer has made the customer anacceptable offer for his used car, they beginto configure the car that the customer wishesto have. The dealer checks whether the cho-sen configuration can be built. For this pur-pose, his Portal provides him with a configu-rator showing the specific characteristics ofdifferent countries, which has been suppliedby either the manufacturer or the importer.Subsequently the dealer checks, with the aidof his Portal, whether the desired vehicle isalready available locally, regionally or withinthe country. Unfortunately none of the show-rooms have the vehicle requested and it willhave to be produced at the factory.

A direct link to the manufacturers factorypermits the dealer to give the customer a pos-sible production date on the spot. At the sametime, the on-line connection gives the dealerthe chance to offer the customer variousadditional options or perhaps to draw hisattention to the fact that the choice of certainfittings might affect the delivery date for thevehicle for instance, if he drops the idea of having a sliding roof the delivery time couldbe shortened by two weeks.

In order to guarantee all this, the DealerPortal must, in addition to the direct on-lineconnection, have a link to the trade organi-zation through which the dealer can checkwhether the customers chosen vehicle isimmediately available from another dealer.On the part of the manufacturer, of course,disclosure of production planning anddeadlines is necessary if the customer is toreceive this service.


At the end of the production and delivery period the customer is notified that the newcar he has ordered has arrived at his deal-ers today and can be collected tomorrow.This message can be sent to him via his pre-ferred medium of communication: a UnifiedMessaging Module establishes contact viaeither SMS, e-mail, fax or telephone.

A Breakdown...

After the customer has picked up his car andhas driven it for a few months, the first minorbreakdown occurs. The customer is on abusiness trip some hundred kilometers fromhome when the on-board information systemin his car tells him that the battery voltage isdropping. The on-board information systemsuggests a repair garage at a convenient dis-tance that has the appropriate qualificationsto repair his vehicle type. The on-board infor-mation system also checks that the proposedgarage has a suitable spare battery in stock.At the same time the system makes sure thatthe garage knows that the customer is on hisway, where he is at the moment and that heenjoys the manufacturers First Class MobilityStatus.

To ensure that all this goes smoothly a cer-tain level of information technology is nec-essary. Intelligent elements constantly moni-tor the state of the individual units in thevehicle and make sure that warning mes-sages are sent where necessary. The inte-gration of the Navigation Service ensuresthat the current location of the vehicle isknown. A wireless connection via GPRS

(General Packed Radio Service) guaranteesthat all data arrives at its correct destinationquickly. Various telematics elements ensurecommunication between the vehicle and thegarage. Optimized logistics systems make itpossible to check immediately whether thespare parts that may be required are avail-able. Finally, there must be a regularly updat-ed central data storage system, managed bythe manufacturer, to download the vehicledata and check it against the data that themanufacturer holds on the respective vehicle.

The Repair...

When the customer arrives at the garage, thegarage mechanic finds that the battery in thecustomers car has already been exchanged,and concludes that the problem is not withthe battery but with a different component ofthe car.

To find this out, the garage mechanic needsaccess to a Vehicle Relationship Management(VRM) system, which documents the life cycleof the vehicle completely.

After a short inspection the fault is identified:a software-controlled component with thewrong version of the software is responsiblefor the drop in voltage of the battery. Thecomponent is immediately fitted with the cor-rect version of the software, which is directlydownloaded from the manufacturers databank. Once the component has been reini-tialized, the customer can resume his busi-ness trip; the interruption caused by thebreakdown has lasted only one hour.


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wish-fulfillment can become reality there is stillsome preliminary work to be done. As a firststep, the internal corporate processes of thepartners in the supply chain must be opti-mized and where necessary streamlined. Asa second step, cross-company processes canbe set up. The third step is the expansion ofservices along the supply chain. Of course,the integration of processes described here isnot a simple matter. But it offers successdirectly: every intermediate stage achievedincreases the efficiency of the participatingcompanies.

The Optimization of Internal Processes

The IT systems that are used in the motorindustry are frequently obsolete and do notmeet the requirements of collaborativeprocesses. Practical experience shows thatin many cases a thorough streamlining ofthe existing infrastructure is necessary. Thisshould include a review and, as the casemay be, the revision of business processes,as well as the optimization of the existingERP system. Over and above this, regard-ing the integration of the different process-es within a company there is much catchingup to be done.

By means of the revision of processes andthe optimization of systems, costs should bereduced, the level of service raised, accessto information increased both internallyand externally and throughput times short-ened.

Car Trade

Here too, certain demands are made on thetechnical equipment of the vehicle, whichmust be fitted with the appropriate program-mable components. Additionally, the garagemust be sure to have facilities for download-ing from the manufacturers data bank.

Implementing the Warranty...

For the garage too, which was able to repairthe fault in the customers car so rapidly, theprocedure is speedy: after a few days themanufacturer of the faulty electronic compo-nent reimburses the garage for the repair.

In order to deliver this, there must be a bind-ing warranty that is directly accessible on thegarages Portal. For direct reimbursement ofthe costs a suitable interface is required. Forthe system to be continuously kept up-to-dateover and above the case described, the repairdata must be sent to the manufacturers sothat they can continue recording the historyof the vehicle. This also ensures that the qual-ity of the product at series level continues tobe improved and that a comprehensiveworldwide availability of information on indi-vidual vehicles and thus optimal service atall times is guaranteed.

Three Steps to Success

The scenario described above presupposes anideal situation that cannot be assumed to existtoday. True, all the technologies and processesreferred to are available and many have beentried out in practice, but before this motoring



Admittedly, in this phase scarcely any new processes or company services are devel-oped, but the optimization of internalprocesses almost inevitably leads toenhanced efficiency, since already existingservices can be offered more speedilyand/or at lower cost. Experience shows thatalready in this first phase productivity gainsof between 15 and 20 per cent can beachieved.

Once the internal corporate foundations havebeen laid, a start can be made with the inte-gration of partners. Only the combination ofan integrated set of systems and an equallyintegrated data storage system will create thebasic conditions for a strengthening of the tiesbetween partners and for an efficient SupplyChain Management (SCM).

Integration of Partners

The integration of different companies alongthe supply chain has a long tradition in themotor industry in particular. At an early stage,as part of the system of just-in-time production,manufacturers organize communication withtheir suppliers via EDI systems (Electronic DataInterchange). This integration increases thetransparency of the stock-keeping, enables all-embracing planning and makes for optimiza-tion of delivery times and stocks.

Now there must be integration of the distribu-tion processes between the different partnersin the car trade from the manufacturer andthe importer and/or wholesaler right throughto the dealer. The emphasis must lie firstly onthe core business: the sale of vehicles andspare parts.

We are looking for processes without notice-able discontinuities in communication,whose data can be understood by all thoseinvolved at any time. Previously it was oftenonly certain specialists in the office or in the field who could interpret and amplify theavailable information when discontinuities

in communicationoccurred. In conjunc-tion with EnterpriseApplication Integra-tion (EAI) and PortalTechnologies, theInternet, as a low-costand universally avail-able infrastructure,plays an importantpart.

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potential for synergy being utilized. Synergies can, for example, be developed in the combi-nation of the spare part trade and the importof new cars, the implementation of warantieswith the aid of VRM systems and the supportof CRM measures, or the inclusion in the Cus-tomer Portal of offers of accessories from out-side suppliers.

New Services

In the information age the car dealer has theopportunity to progress from being purely acar vendor to becoming a purveyor of mobil-ity. The aim is to offer the customer from asingle source and in coordination as much aspossible of the information and services herequires relating to the car, including, forexample, vehicle fittings, insurance rates, testdrive, multistorey parking garage, repairsand fuel, as well as the car itself.

Portal technology makes it possible succes-sively to expand the range of services onoffer to the customer above and beyond thecore business. It matters little to the customerwho provides these additional services. Allthat matters to him is that his needs are com-prehensively and efficiently met. Therefore,when considering the choice and provision ofsuch services, the focus should not be on tra-ditional ideas of competition but on the cus-tomer alone. Seen from this perspective, itmakes sense to integrate additional, special-ist businesses such as suppliers of leasingand fleet management, and Eurotax or tele-matics providers from the telecommunicationsindustry.

The application of Portals offers particularlyinteresting prospects. Via a (web) Portal thepartners are offered the functions that are mostimportant for them. That is, to use the integrat-ed processes the partners no longer need theirown systems, but log the data via the Portal ona central system. Thanks to this, problem areassuch as coordination of master data simply donot arise, since all data is on one system fromthe start. When new partners join, they can beintegrated immediately.

The added value that these restructuring mea-sures promise is better information for the cus-tomer thanks to on-line access to current prod-uct data, such as certain vehicle configurationsor catalogues of spare parts. This reduces theamount of assistance that needs to be given bythe dealer, since the customer is now morecompetent. Finally, administrative costs arereduced: if the customer orders on-line, he logsthe order himself.

At the same time, processes can be integrated,whereas previously they ran in parallel at themanufacturer, importer or dealer, without their

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III. There is a lot to be done

The information age offers the motor industryvery many opportunities to react to the chal-lenges of political, economic and technicaldevelopments. However, this is a complexundertaking. True, the technical requirementsare largely in existence, and the strategiesthat arise from the Business Model of theInformation Age have already proved them-selves many times. And yet there are stillobstacles in the way of putting the integrationidea into practice.

The first of these obstacles is the high degreeof complexity of the processes along the sup-ply chain. Also, the different levels of devel-opment of the participating companies canlead to problems whether it be in IT infra-structure or the three stages of developmenttoward integration along the supply chain.The same applies regarding the absence ofstandards for telematics services and elec-tronic components. The need is for uniformmodel descriptions that take account of allprocess requirements. It is only in this waythat the same data can be used throughoutthe whole course of the process.

Psychological factors, too, place obstacles inthe way of the practical application of theBusiness Model of the Information Age. Forexample, the idea of competition along thesupply chain has traditionally been stronglyemphasized: manufacturers, importers,wholesalers and dealers are often in conflict.They have become used to regarding eachother as opponents and are frequently notready or not yet ready for cross-compa-ny collaboration.

These obstacles can, however, be overcome.Companies that decide to collaborate alongthe supply chain not only guarantee them-selves long-term competitive advantages,they also increase their efficiency and prof-itability with every step in this process.

There is a lot to be done


...

Car owner

Selling used cars

Produ

Insurance

Route planning


WholesalerDealerGarage


providers

Communities


Complex integration projects, like thosewhich are typical of the motor industry,demand a methods-based procedure.

In its development of integration projects,IMG follows the methods suite PROMET

. This

set of methods was developed by IMG in col-laboration with the University of St. Gallen(HSG) and has proved itself in practice manytimes over.

IMG has already successfully advised numer-ous national and multinational companies atall stages of the supply chain within themotor industry.

We Can Meet Your Needs

The development and practical application ofsolutions for the motor industry is one of themain emphases of the consultancy providedby The Information Management Group(IMG). IMG has bundled its know-how in thisarea in a special unit, Car Trade, whichspecializes in the supply chain of manufac-turer importer/wholesaler dealer.

The core competences of the Car Trade unitare consultancy services in the areas:

Planning, procurement and sale of vehicles and spare parts

Configuration and management of master data for vehicles

Implementation of warranties Premiums Collaborative and integration scenarios for

the individual stages in the supply chain Process Portals

The range of services offered by the CarTrade unit includes the following areas:

Feasibility studies, cost benefit analyses Architecture planning at the level of busi-

ness administration/organization and application

Process design Realization of processes in IT systems System integration and conversion by

means of EAI tools or classical interface solutions

Active project and change management



Contact: [email protected]

As an innovative and reliable consultingpartner, we place our experience and com-petence at the disposal of our customers. Theconsultants from IMG possess wide practicalknow-how and a wealth of experience of theindustry. They are familiar with the structuresand challenges of your industry and knowthe success-oriented options and solutions.This allows the time required for analysis andthe development of strategies to be signifi-cantly reduced and effective goal-orientedmeasures to be identified for your company.

IMG follows an all-inclusive approach in itsprojects: We support you from the develop-ment of the strategy, through the design orredesign of the corporate processes up toorganizational and technical implementation.Our customers benefit from our strong imple-mentation culture new strategies andprocesses are only effectively implementedonce integration into the information systemhas been completed.

We can summarize our services as follows:

We implement your strategy through goal-oriented adaptation of your business processes and optimum system support.

We bring new life into your business processes through innovation, a methodicalapproach and knowledge of Best Practices.

We realize Business Networking projects according to the principles of the Old Economy e-business with Return on Investment (ROI)!

IMG applies its range of services where youneed support in your project. Our servicesare structured on a modular basis in order tofulfill your specific needs.

As a consulting partner which has receivednumerous awards, IMG is able to developjointly with you a concept oriented towards thefuture requirements of the information age,and to support you up to implementation.

A prerequisite for this is intelligent integrationon the levels of strategy, processes, systemsand people, and precisely this is the funda-mental idea behind all our actions. Becauseto us, moving a company means bringingabout changes simultaneously in all fourdimensions.

19



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Deutschland

IMG Information Management GmbHMnchenTel. +49 +89 244 45 2343Fax +49 +89 244 45 5051E-Mail [email protected]

IMG Information Management GmbHFrankfurt am MainTel. +49 +69 50 50 44 00Fax +49 +69 50 50 44 44E-Mail [email protected]

IMG Information Management GmbHWalldorf (Baden)Tel. +49 +6227 73 34 60Fax +49 +6227 73 34 79E-Mail [email protected]

IMG System Integration GmbH, DortmundTel. +49 +231 108 762 0Fax +49 +231 108 762 50E-Mail [email protected]

Japan

IMG Japan K.K., TokyoTel. +81 +3 5796 2823Fax +81 +3 3472 5336E-Mail [email protected]

IMG Japan K.K., OsakaTel. +81 +6 6221 4990Fax +81 +6 6221 4999E-Mail [email protected]

sterreich

IMG GmbH, WienTel. +43 +1 512 89 10Fax +43 +1 512 89 10 250E-Mail [email protected]

Polen

IMG Information Management Polska Sp. z o.o., WroclawTel. +48 +71 78 32 100Fax +48 +71 78 32 200E-Mail [email protected]

IMG Information ManagementPolska Sp. z o.o., WarschauTel. +48 +22 874 47 94Fax +48 +22 874 47 95E-Mail [email protected]

Schweiz

IMG AG, St. Gallen (Headquarters)Tel. +41 +71 274 81 11Fax +41 +71 274 81 81E-Mail [email protected]

IMG AG, ZrichTel. +41 +1 305 32 00Fax +41 +1 305 32 32E-Mail [email protected]

IMG AG, Arlesheim (Basel)Tel. +41 +61 415 66 66Fax +41 +61 415 66 77E-Mail [email protected]

UK

IMG (UK) Ltd., Egham (London)Tel. +44 +1784 223 800Fax +44 +1784 439 678E-Mail [email protected]

USA

IMG Americas Inc., PhiladelphiaTel. +1 +610 925 1800Fax +1 +610 925 1801E-Mail [email protected]

IMG

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