The automotive sector is navigating slower traditional demand alongside rapid EV growth, intense cost pressure, and critical material-security risks, particularly rare earths and battery minerals. That environment increases forecast error, shortens product cycles, and stresses supplier tiers, forcing nearshoring and vertical re-engineering. This ETS fact sheet summarizes the industry drivers and what to do about them.
It lists the key risk drivers — EV content growth and BOM complexity, export controls and refining concentration, tariffs and freight costs, and margin squeeze on Tier-1 and Tier-2 suppliers — and the critical challenges: the multi-tier visibility gap, JIT/JIS fragility where transport blips create costly line stops, raw-material criticality, 20–30 thousand parts per vehicle, and balancing inventory reduction with on-time-in-full requirements.
SAP's integrated cloud solutions close the gaps: Ariba and Business Network digitize POs, ASNs, and invoicing for visibility and collaboration, IBP provides demand sensing, inventory optimization, and S&OP for fast planning, and SAP ERP Cloud with EWM and TM integrates JIT/JIS execution. The fact sheet cites SAP-community benchmarks for safety stock and OTIF improvement and outlines a 12-week pilot — setup and supplier onboarding, implementation with parallel testing, then KPI measurement — with 90-day targets.
The full fact sheet is available above as a PDF, together with why automotive companies choose ETS as their SAP partner.