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1. Business benefits:
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Faizan Mustafa,
CIO/Head of IT,
Indus Motor Company Ltd
Business Challenge
To compete with a surge of foreign entrants
to Pakistan’s auto market, Indus Motor
Company wanted to improve the customer
experience by delivering high-quality
vehicles rapidly and at the lowest cost.
Transformation
Indus Motor Company is transforming
front-to-back operations with
SAP® S/4HANA® on high-performance
IBM® POWER8® servers—empowering
its data-driven decision-makers to boost
manufacturing efficiency.
Indus Motor Company shifts
quality control into top gear
to win sales, nurture loyalty
and overtake the competition
“Thanks to our IBM and SAP
solutions, we are achieving
the digital transformation
that will help us strengthen
our competitiveness in a
fast-moving marketplace.”
Faizan Mustafa, CIO/Head of IT,
Indus Motor Company Ltd
Business benefits:
Share this
95%
faster material requirements
planning will reduce risk of
supply-chain disruption
20%
reduction in defects
per unit will accelerate
manufacturing and
boost satisfaction
10%
improvement in sales
order accuracy will enable
timely manufacturing to
meet demand
Founded in 1989 as a joint venture between the House of Habib, Toyota Motor
Corporation and Toyota Tsusho Corporation, Indus Motor Company is a
manufacturer, assembler, distributor and importer of Toyota and Daihatsu vehicles,
spare parts and accessories in Pakistan. Employing more than 2,300 people, the
company operates a dealership network with 45 locations across the country, and
generates gross annual revenues exceeding USD1 billion.
2. 2
Challenge in detail
With competition in its domestic market
intensifying, Indus Motor Company
aimed to capture sales by delivering
high-quality vehicles rapidly. With more
than 60 suppliers and three-month
procurement lead times for imported
parts, forecasting demand accurately is
vital—but using many separate systems
and processes in the value chain made
it difficult for the company to predict the
most popular vehicle models in each
region in a timely manner, leading to
missed sales opportunities.
The previous approach also meant the
company was unable to detect and
respond to defective components early
in the manufacturing process, increasing
the risk of delays to customer orders.
To solve these challenges, Indus Motor
Company decided to integrate its value
chain from end to end, and looked for a
way to enable this new way of working.
Driving growth in a
competitive market
In recent years, the exploding popularity
of e-commerce, social media and review
aggregators means that consumers can
make purchasing decisions more carefully
than ever—especially for big ticket items
like a new car.
For automotive manufacturers such
as Indus Motor Company—a leading
manufacturer of Toyota vehicles based in
Pakistan—building high-quality products
is essential to cultivate a strong brand
image, nurture loyalty and inspire new
customers to buy.
Faizan Mustafa, CIO/Head of IT at Indus
Motor Company Ltd., takes up the story:
“Over our 25 years serving Pakistan’s
consumer and business market, we have
driven very successful growth. In the
early 1990s, we were producing around
20 vehicles per day—and that figure has
now increased to 240 per day. In June
2016, we recorded our highest ever sales
and profitability, and our goal is to continue
that rapid growth.
“Legislation has now been introduced
to further stimulate the automotive
industry in Pakistan, which means that
numerous foreign players are entering
the market. Increased competition is
extremely positive for domestic innovation
and economic growth, but it also
creates new challenges.
“With more choice available to consumers
than ever before, it is essential that we
differentiate ourselves by enhancing the
quality of our products and services, while
maintaining competitive prices.”
Like all major automotive manufacturers,
Indus Motor Company operates a
complex value chain. In total, the
company receives parts from more than
60 suppliers across Pakistan, and key
components from manufacturing plants
in Japan and Thailand, all operating on a
just-in-time basis.
Mustafa adds: “The cumulative lead time
for procuring local and imported parts,
manufacturing and delivering a new
vehicle is around three months, which
means accurate forecasting is essential to
ensure that we have sufficient quantities
of each model to meet demand on the
dealership forecourt.
“In the past, our dealerships entered their
forecasts manually into spreadsheets and
sent them back to our planning team for
further processing. However, because
it was a time-consuming process, it
was practically impossible to gain the
insights we needed to optimize our
manufacturing—leading to missed sales.
“Our previous way of working also
made it very difficult to identify defects
in parts from our suppliers quickly. If
we detect issues downstream in the
manufacturing process, we need to alert
our supplier, remove the affected parts
from all the vehicles on the factory floor
and then replace them with functioning
components—all of which drive up our
operational costs and increase the risk of
delaying our deliveries to customers.
“In order to deliver higher-quality vehicles
to our customers fast enough to meet
demand, we looked for a more efficient
way of working.”
Transforming
end-to-end operations
For more than a decade, Indus Motor
Company has relied on SAP® enterprise
applications to manage its workflows
for manufacturing, production planning,
finance and controlling. To achieve its
business goals, Indus Motor Company
decided to build on its success with SAP
solutions by seamlessly integrating its
entire value chain using SAP S/4HANA.
“In the past, it took months to deliver
reports to our managers about what was
happening on the ground, which is simply
too long to make competitive decisions,”
recalls Mustafa. “We realized we needed
to collect information about forecasting,
manufacturing and suppliers faster, and—
crucially—deliver reports to our decision-
makers immediately.”
“After we totaled up the
scores, IBM Global
Business Services was the
clear leader of the quadrant
for the quality of their work,
expertise and global reach.”
Faizan Mustafa
CIO/Head of IT
Indus Motor Company Ltd
3. 3
Solution delivery
To put its sales-driving strategy into
action, Indus Motor Company partnered
with IBM Global Business Services to
create standardized business processes,
supported by SAP S/4HANA software
running on high-performance IBM
POWER8 processor-based systems.
When its new business systems go
live, the company will ensure complete
front-to-back integration—enabling
sales forecasts from its dealerships
to flow seamlessly to the primary
suppliers and manufacturers in its value
chain. Combined with real-time insight
into the results of parts inspections,
Indus Motor Company will gain the
ability to detect defects at the earliest
possible opportunity, reducing the risk
of costly delays downstream in the
manufacturing process.
He continues: “One of the things that
impressed us most about SAP S/4HANA
was its built-in real-time analytics
capabilities. We knew that achieving our
goal would demand a full-scale digital
transformation, and we were confident
that the SAP solution would deliver the
flexibility the business needs to make
timely, proactive decisions.
“Collecting data is vital, and SAP
S/4HANA offers fully integrated SAP
Fiori® apps to help us capture, validate
and deliver information to mobile users in
real time across the business. Better still,
SAP S/4HANA is a central aspect of SAP’s
long-term product development roadmap,
which offers us the security of a solution
that can support our business growth for
years to come.”
To deliver a high-performance platform
to support the new SAP solution, Indus
Motor Company selected IBM POWER8
processor-based systems virtualized with
IBM PowerVM® for IBM PowerLinux™
and running SUSE Linux Enterprise Server
for SAP applications.
“We have been using IBM Power Systems
as the basis for our SAP applications
landscape for more than ten years, and
Indus Motor Company was one of the
first companies to implement Power
technology in Pakistan,” comments
Mustafa.
“Of all the infrastructure solutions we
considered for the SAP S/4HANA
software, IBM Power System S824L
servers stood head and shoulders above
the crowd in terms of high availability,
flexibility, manageability and performance.
What’s more, IBM offered us a level of local
service and support that none of the other
providers we considered could match.”
Indus Motor Company’s SAP
S/4HANA environment is based
on high-performance IBM Power
System S824L servers connected to
IBM Storwize® V5000 storage arrays.
Built on IBM Spectrum Virtualize™
software, the IBM Storwize V5000 solution
can automatically migrate hot and cold
data between storage tiers based on
real-time usage patterns. Combined
with automated, intelligent backups to
a resilient IBM TS3200 Tape Library
managed by IBM Spectrum Protect™
software, Indus Motor Company has
peace of mind that its mission-critical data
is always protected.
“SAP S/4HANA is a central
aspect of SAP’s long-term
product development
roadmap, which offers us
the security of a solution
that can support our
business growth for years
to come.”
Faizan Mustafa
CIO/Head of IT
Indus Motor Company Ltd
4. 4
Benefits in detail
• 10 percent improvement in sales order
accuracy will ensure that Indus Motor
Company can manufacture the optimal
quantity of each model—reducing the
risk of a customer’s chosen model being
out of stock, and delivering a seamless
purchasing experience.
• 20 percent reduction in defects per unit
will reduce the risk of delivery delays and
nurture increased customer satisfaction.
• Instrumented vehicles will enable Indus
Motor Company to track customer
deliveries in real time, ensuring they
are within service-level agreements—
delighting customers with a highly
responsive service.
• 95 percent faster materials requirements
planning will enable greater agility to
switch to alternate vendors in the event
of supply-chain disruption, reducing
sourcing risks.
• Instrumented manufacturing equipment
will help reduce unplanned downtime,
maximize manufacturing capacity and
minimize costs.
To accelerate implementation and reduce
its exposure to risk as it drove its digital
transformation process, the company
decided to partner with IBM Global
Business Services® to help size, deploy
and configure its new SAP solutions.
“After our initial request for proposals, we
created a cross-functional committee
to quiz each vendor on their proposed
scope and implementation plan, case
studies of previous implementations
and their team’s qualifications,” says
Mustafa. “After we totaled up the scores,
IBM Global Business Services was the
clear leader of the quadrant for the quality
of their work, expertise and global reach.
We knew that our transformation effort
was an envelope-pushing project, and we
determined that the IBM team possessed
the skills we needed to move to the new
way of working successfully.”
To drive the implementation process,
Indus Motor Company decided to mix
the IBM Ascendant methodology with the
SAP Activate framework—combining the
structure of traditional waterfall-based
processes with the responsiveness of
agile development.
“For the most part, we are utilizing the
IBM Ascendant methodology to steer
the business through the planning,
blueprinting, configuration and use
acceptance stages of the deployment,
which is a powerful way to ensure that
each work stream is completed on time
and within budget,” Mustafa explains.
“However, because many parts of the
business were already familiar with the
way that SAP solutions work, we used the
SAP Activate methodology to accelerate
the blueprinting phase for our quality
assurance and project system modules.
By showing our users prototypes based
on pre-defined SAP S/4HANA workflows,
we could make minor tweaks to the
underlying business logic quickly based
on their feedback.”
Working together with IBM Global
Business Services, Indus Motor Company
is now deploying SAP S/4HANA with
applications for materials management,
production planning, materials requirement
planning, finance and controlling, project
management and quality assurance.
The new platform leverages SAP Fiori
to personalize and simplify the user
experience, making it even easier for
business users to consume and leverage
real-time business insights.
“All of our business and technology
projects stem from our goals to improve
customer experience, drive up product
quality and ensure timely delivery,” adds
Mustafa. “Our collaboration with IBM and
SAP is perfectly aligned with those three
strategic pillars, and we are confident
that we will start realizing the benefits as
soon as our new SAP S/4HANA solution
goes live.”
Racing ahead of
competition
With SAP S/4HANA on IBM Power
Systems™ servers at the heart of its new
digital business processes, Indus Motor
Company will be in a strong position to
drive competitiveness as new players
enter its domestic market.
“SAP S/4HANA will become the nervous
system that collects and analyzes data
from across the business, and transforms
that data into actionable insight,” explains
Mustafa. “Our decision-makers will
have up-to-the-minute information at
their fingertips to make better-informed
strategic decisions.
“Currently, our quality management team
inspects all new components and records
the information manually, and later enters
it into a standalone system in batches.
Because our production volumes are
so high and we work in a just-in-time
environment, this manual approach limits
our ability to detect patterns of defects
that indicate a manufacturing fault at one
of our suppliers.
“Soon, our team will record information on
defects directly into a SAP Fiori app from a
mobile device, enabling us to use real-time
predictive analytics to detect and alert
our suppliers to issues before the parts
have time to move into our downstream
manufacturing process. We see that closer
collaboration with our suppliers will enable
us to work together to help develop their
95 percent faster materials
requirements planning will
reduce sourcing risks
5. 5
Key components
Applications: SAP® Fiori®,
SAP S/4HANA®
Software: IBM® PowerVM® for IBM
PowerLinux™, IBM Spectrum Protect™,
SUSE Linux Enterprise Server for SAP
applications
Hardware: IBM Power System S824L,
IBM Storwize® V5000, IBM TS3200
Tape Library
Services:
IBM Global Business Services®
capabilities, ultimately enabling them to
improve their quality assurance processes,
work more efficiently and reduce
operating costs.
“On the Indus Motor Company side,
we anticipate that real-time analytics
will help us reduce our defects-per-unit
metric by 20 percent—boosting quality,
reducing the risk of delivery delays, and
delighting our customers with more
responsive services.”
By providing full integration across the
value chain, Indus Motor Company
will ensure greater accuracy in its
forecasting process, enabling it to optimize
manufacturing processes to capture every
sales opportunity.
Mustafa comments: “In the future, our
dealerships will enter their three-month
sales forecasts straight into the SAP
bolt-on solution—replacing today’s
manual, spreadsheet-based processes.
By having accurate, complete and
up-to-date information at our disposal, we
predict that we will improve the accuracy
of our sales orders by 10 percent. Our
procurement lead times are more than
three months long and our manufacturing
process is operating at almost full
capacity, so accurate forecasting will be a
key capability to capture sales.”
Additionally, the IBM and SAP solutions
will enable Indus Motor Company to
enhance its supplier management
process, reducing its exposure to supply
chain risks.
“In the past, it would take us almost half
a working day to complete a materials
requirement planning report,” says
Mustafa. “The risk was that if demand
fluctuated, we found it quite difficult to
alter our production planning process.
This ultimately resulted in missing delivery
commitments to customers.
“In the new solution, we will be able to
calculate our materials requirements
in near-real time, and any changes we
make will automatically flow through into
dependent data in other systems, such
as production planning. As a result, if one
of our suppliers is disrupted or market
demand fluctuates for any reason, we can
adjust our materials requirements quickly
20 percent reduction in
defects per unit will reduce the
risk of delivery delays
