One of the Biggest Transformation Programs in Chinese Auto Industry

in collaboration with

“Navigator Project” – the largest SAP implementation ever in China – is helping automaker DFL establish a management information platform for improved efficiency

The Situation The Solution Dongfeng Motor Co., Ltd. (DFL) The “Navigator Project” was was established in June 2003 developed to help DFL establish a through joint investments from management information platform Dongfeng Motor Corporation and that could obtain timely, Nissan Motor Co., Ltd. DFL is one consistent, accurate and of the largest car manufacturers in transparent information. the People’s Republic of China. The program, implemented with The company had set goals to the help of Capgemini, consisted double its sales and revenues over of a number of streams, including a four-year period, increase its Policies and Procedures, operating profit and make the Organization Alignment, Close most of its joint venture Cycle Reduction and a large-scale partnership. To achieve these SAP implementation. objectives, DFL felt the need to transform and streamline its business operations.

An SAP implementation across“ such a large business span, within such a short period of time is rare in China as well as in the world. Its success will undoubtedly be written into the DFL history.” Mr. Atsushi Komatsu, Vice President - Finance and IT, Dongfeng Motor Co., Ltd. The Result How DFL and Capgemini The successful implementation of Worked Together the Navigator Project, with SAP as The Dongfeng Motor Corporation the core, is an important milestone began in 1969 as a state-owned in the implementation of enterprise. Dongfeng Motor Co., fundamental management Ltd. (DFL) was established in June “The SAP system was improvements and company 2003 through joint investments successfully implemented in transformation at DFL. Along with from Dongfeng Motor Corporation the commercial vehicle QCD (Quality Cost Delivery), KPI based on its commercial vehicle companies and the passenger (Key Performance Index), CMS assets, and Nissan Motor Co., Ltd. vehicle companies. Such a big (Cash Management System) and transformation completed CFT (Cross Function Team), the It is the largest joint venture in within such a short period of program has been established as China’s automobile industry with time is a significant the “Dongfeng management 70,000 employees and registered achievement.” methodology” and has: capital of RMB 16.7 billion (approximately €1.7 billion). The Mr. Katsumi Nakamura, CEO, • Upgraded the mindset and company’s products include a wide Dongfeng Motor Co., Ltd. behavior of staff. range of commercial vehicles, passenger vehicles, components, • Improved and standardized parts and automotive equipment. business and operational processes. DFL’s long-term ambitions include • Enhanced basic data being ranked in the top three in maintenance management. the world for commercial vehicles, • Established a consistent business having its passenger vehicles be operations platform for 12 plants considered one of the best brands and eight departments. in China, and becoming a recognized brand name around the • Significantly changed and globe. In the medium term, the improved the corporate culture. company set goals to double its sales and revenues over a four-year period, increase its operating profit and make the most of its partnership with Nissan. However, the complexity of the original state-owned enterprise was still reflected in DFL’s culture, working mentality and organizational structure, making it difficult to enact the revolutionary changes necessary to achieve these objectives. Given the fiercely competitive environment, DFL felt it needed to transform and streamline its business processes and systems to improve efficiency.

In addition, DFL agreed to meet Nissan’s requirement to consolidate financial data within a five-day close cycle. The company also wanted to improve the quality of financial data in order to consolidate with and report to Nissan in an agreed format.

The Navigator Project, implemented with assistance from Capgemini, was developed to help DFL establish a management information platform that could obtain timely, consistent, accurate and transparent information. Capgemini assisted DFL with all the program streams:

• Policies and Procedures: Developed a detailed central policy manual to be used by the DFL organization including the headquarters and subsidiaries to support the finance organization; standardized finance policies and operational procedures; established and trained an implementation team. “Through the implementation More importantly, it promoted of this world-class enterprise positive changes to the • Organization Alignment: management software, DFL will mindset and behavior of our Designed an efficient “to-be” be able to obtain timely, 70,000 staff and further finance organization; delivered accurate and transparent improved management in the the transformation strategy and information. entire DFL operation.” methodology; supported organization alignment for the Mr. Qiao Yang, SAP implementation; established Senior General Manager - and trained an implementation Finance and Accounting, team. Dongfeng Motor Co., Ltd. Automotive the way we do it

• Close Cycle Reduction: DFL has realized a number of • Standardized cost management, Assisted DFL Finance in benefits as a result of the SAP cost accounting and analysis. achieving the first phase goal of implementation: the three-day closing, five-day • Achieved integrated business and consolidation monthly close • Established a management finance operation. cycle; established and trained an information system platform for implementation team. DFL at a group level. • Achieved phase 1 goal of Close Cycle Reduction. • SAP Implementation: Helped • Standardized business processes. DFL establish the business Furthermore, the program will operation platform for 12 plants • Achieved transformation of help DFL build the foundation for and eight departments, covering management and working style. further enterprise transformation 70% of the company’s business; and optimization of business and improved and standardized • Formalized basic data operational management. business and operational management. processes; standardized data and data management processes; established and trained an implementation team.

The SAP implementation was About Capgemini and the extensive with joint efforts from Collaborative Business Experience over 100 consultants, over 70 core business team members, more Capgemini, one of collaboration-focused methods and tools. than 50 departments from 13 the world’s foremost Through commitment to mutual success business units, and over 1,000 end providers of Consulting, Technology and the achievement of tangible value, users. The functional scope and Outsourcing services, has a unique we help businesses implement growth comprised Finance & Accounting way of working with its clients, called strategies, leverage technology, and thrive (FI), Accounting Control (CO), the Collaborative Business Experience. through the power of collaboration. Material Management (MM), Sales & Distribution (SD), Production Backed by over three decades of industry Capgemini employs approximately 61,000 Planning (PP) and Project System and service experience, the Collaborative people worldwide and reported 2005 Business Experience is designed to global revenues of 6,954 million euros. (PS). help our clients achieve better, faster, more sustainable results through More information about our services, SAP was implemented in parallel seamless access to our network of offices and research is available at at three project sites (Shiyan, world-leading technology partners and www.capgemini.com Xiangfan and Huadu) covering the commercial vehicle plants, passenger vehicle plants, the Capgemini China In collaboration with Dongfeng Automobile Co., Ltd. Automotive (DFAC), commercial vehicle sales Consulting Services headquarters and DFL corporate Technology Services headquarters. Transformation Consulting Finance & Employee Transformation Capgemini continues to work with Package Implementation – SAP Approved by DFL on additional projects. Mr. Qiao Yang, Senior General Manager, Finance and Accounting, Dongfeng Motor Co., Ltd. Mr. Jeffrey Zhu, General Manager, Corporate Communications Deputy GM, President & CEO office, Dongfeng Motor Co., Ltd. Mr. Johnson Huang, Vice President, Manufacturing, Retail, Distribution and Automotive Sectors, Capgemini China