Audi Partners with IBM To Enhance Competitiveness and Profitability

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Hanover, GERMAN - 22 Sep 2004: IBM today announced the launch of a new, optimized business process and technology infrastructure for the AUDI Group. The comprehensive supply-chain transformation and standardization of Audi's financial and controlling processes was designed in partnership with IBM Business Consulting Services over a two-and-a-half year development period and went live earlier this year. This initiative represents one of the most extensive SAP R/3 implementations in a component-plant in the automotive industry and incorporates such emerging technologies and methodologies as Radio Frequency Indentification, Optical Archiving and business analytics. 

The successful program was implemented at the AUDI AG headquarters in Germany and at its fully owned subsidiary, AUDI HUNGARIA MOTOR Kft. in Hungary.  AUDI HUNGARIA is the largest engine plant within the Volkswagen Group, is Hungary's largest exporter, and is where the popular Audi TT Coupe and Roadster models are assembled.

As a result of this initiative, AUDI HUNGARIA has achieved a ten-fold increase in the speed of its material requirements planning cycle and significantly reduced supply-chain and procurement costs.  It is now enjoys real-time analytics on production processes and supply chain processes and can react to market and customer fluctuations rapidly. 

"As an engine supplier to the entire Volkswagen Group, we are right in the middle of the supply chain for all vehicle factories around the world," said László Juhász, Head of Logistics for AUDI HUNGARIA. "To meet our high level of schedule effectiveness commitment to customers, we needed a tool that can map simply the complex materials planning and materials supply flow and can provide the latest information at any time. With the new infrastructure, we have achieved an even higher level of automation in materials handling thanks to the extended use of Radio Frequency technology."

For AUDI HUNGARIA, the one-step switchover to the new IT-infrastructure meant that more than 1.400 Audi employees had the ability to work with the new system and new processes from day one.

Optimization of logistical processes of engine production, vehicle assembly and shipping materials to overseas plants in other continents has resulted in a solution that is tightly integrated within the company and in the processes and information technology of the group.

Radio Frequency (RF) Scanning is a core component of the overall solution, which is used by AUDI HUNGARIA to support on-line processes such as material flows in the plant, including receipt of goods;
warehouse management (direct and indirect materials); and KANBAN production replenishment, engine shipment, physical inventory and returns. This automation provides Audi with two key advantages: the ability to post data on-line and a reduction in errors caused by manual entry.  It also speeds up processes, with 55,000 daily on-line postings, each taking less than one second of processing time.

"IBM is delighted to further build on the long-standing relationship with the Audi Group," said Gerhard Baum, IBM Managing Director for the Volkswagen Group, "We've applied our consulting and emerging technology expertise to help Audi enhance its competitiveness in the automotive industry and lay the foundations for further growth.  In addition, the new on-demand infrastructure we have created can grow with Audi's requirements, support its process optimization, and, ultimately, cover the entire enterprise."

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