SAP for rail vehicle manufacturers

See how SAP can help build a stable foundation for the further development of rail vehicle manufacturing.

SAP for discrete manufacturing

Why SAP
Business challenges
Sales
Production
Supply Chain
Quality management
Finance
IT
HR
ERP Value Check
AI readiness

Contact

Why SAP

Rail vehicle manufacturing involves long sales cycles, multi-year contracts, complex production programs, rigorous quality requirements and a high dependency on critical components and specialized suppliers.

In this environment, ERP should support not only process handling, but also business decisions: from managing the tender pipeline, through planning the production of wagons and trainsets, to controlling costs, budget, homologation, margin and expert competencies.

Hicron helps rail vehicle manufacturers implement, develop and optimize SAP so that the system supports the entire program lifecycle – from sales and contract to production, quality, finance and further organizational development.

See where SAP can bring the greatest value in rail vehicle manufacturing.

Do these challenges sound familiar?

In companies manufacturing rail vehicles, complexity emerges at the intersection of sales, engineering, production, procurement, quality, finance, IT and HR.

The most common challenges include:

multi-year tender procedures and limited pipeline visibility,
risk of underestimating contracts executed over several years,
lack of central management of contract options, service and modernization,
parallel production of many wagons with different configurations,
the need to synchronize wagons within one trainset,
a long rail vehicle production cycle and limited progress visibility,
procurement of components for multi-year programs with changing configuration,
a limited number of strategic suppliers,
lack of visibility of how component shortages affect the entire production program,
dispersed quality and test documentation required for audits and homologation,
lack of full traceability of critical components,
engineering changes affecting homologation compliance,
manual revenue recognition in multi-year contracts,
difficulty controlling margin, budget and forecast of the final result,
a high level of system customization for project contracts,
a dispersed system landscape across plants,
risk of losing expert knowledge and shortage of key competencies.

SAP can help organize these processes in one data model and increase control over program sales, production, procurement, quality, finance, IT and competence development.

Want to know how?

Schedule your ERP Value Check

Sales: better control of the tender pipeline and contract profitability

Rail vehicle sales are based on multi-year tender procedures and complex decision-making processes. The sales director needs current visibility of the pipeline and the status of individual tenders.

An additional challenge is the risk of underestimating multi-year contracts. Contracts for rail vehicles often include production over several years, service and extension options. Lack of accurate cost and margin control increases the risk of preparing an offer that later proves unprofitable.

Managing contract options and extensions is also important. Rail contracts may include additional vehicles, service or modernization. Without central management of options, it is difficult to use the full sales potential.

How Hicron helps

Hicron enables sales pipeline management based on the stages of the tender process. Thanks to SAP Sales Cloud, sales opportunities, stages and win probability can be recorded. The organization gains pipeline visibility by region and program.

Hicron also supports contract profitability analysis already at the sales stage. Thanks to Margin Analysis in SAP S/4HANA, revenues and costs can be analyzed in the context of the sales program. Sales can see the impact of the contract on margin and financial result, which supports bid/no-bid decisions.

SAP Sales Cloud also enables contract options and their status to be recorded. Sales can see the potential of contract extensions and the customer’s decision dates, which makes sales activity planning and program sales management easier.

Business value

greater visibility of the tender pipeline,
better revenue forecasting,
greater control of the long sales cycle,
analysis of contract profitability already at the offer stage,
support for bid/no-bid decisions,
reduced risk of unprofitable contracts,
better management of contract options and extensions,
ability to increase contract value through control of sales options.

Production: control of the production program and synchronization of vehicles within a trainset

Rail vehicle production is carried out within programs covering many wagons with different configurations. Parallel execution of vehicles and staged deliveries make production planning and execution control more difficult.

A particular challenge is the synchronization of wagon production within one trainset. Trainsets consist of different types of wagons that must be ready at the right time. Lack of synchronization can delay the completion of the trainset.

Rail vehicle production takes many months and includes numerous assembly and integration stages. Lack of current progress visibility makes it difficult to control program execution and respond quickly to delays.

How Hicron helps

Hicron enables production planning in the context of the entire vehicle program. Thanks to production scheduling in SAP PP/DS, production orders can be linked to the program and delivery dates.

Production can see the sequence of wagon execution and the dependencies between them, which makes planning parallel production and controlling program execution easier.

SAP PP/DS also enables planning of dependencies between orders related to wagons of one trainset. Production can see links between vehicles, which supports trainset completion planning and reduces delays in final integration.

Hicron also enables production progress to be monitored in a long execution cycle. In SAP S/4HANA, the status of production orders and operations can be tracked, giving production visibility of the current execution status of vehicles.

Business value

better planning of production programs,
greater control over parallel wagon production,
linkage of production orders with the program and delivery dates,
synchronization of wagon production within one trainset,
reduced delays in final integration,
greater visibility of production progress,
faster identification of delays,
better planning of staged deliveries.

Supply Chain: procurement for multi-year programs and supply risk control

Rail vehicle production is carried out within programs lasting several years. Technical configuration may change during the project, while suppliers require early orders for long-lead-time components.

Managing strategic suppliers with a limited number of sources is an additional challenge. Rail vehicle production often relies on components from a narrow group of suppliers, and supplier delays or quality issues affect the entire production program.

Visibility of the impact of component shortages on the production program is also critical. A missing single critical component can delay the production of an individual wagon or the entire trainset.

How Hicron helps

Hicron enables procurement planning based on the production program and demand scenarios. Thanks to material planning in SAP S/4HANA, demand forecasts can be created and updated as configuration changes.

The Supply Chain team can see the impact of purchasing decisions on future program stages. This makes decisions on early orders easier and reduces the risk of excess components and production delays.

SAP S/4HANA also enables order execution and supply risks to be monitored in one environment. Supply Chain can see order status, delivery dates, delays and their impact on production.

Hicron also enables analysis of the impact of material shortages on the production schedule. Planning functions make it possible to identify orders at risk due to missing components, prioritize orders and plan corrective actions.

Business value

better procurement planning for multi-year programs,
demand updates as configuration changes,
greater visibility of the impact of purchasing decisions on future program stages,
reduced risk of excess components,
reduced risk of production delays,
better management of strategic suppliers,
visibility of delivery delays and their impact on the program,
ability to prioritize orders for critical components.

Quality management: compliance, homologation and traceability of critical components

Rail vehicle production requires compliance with rigorous standards and completion of homologation processes. Quality and test documentation may be dispersed, making preparation for audits and customer acceptance more difficult.

Traceability of vehicle configuration and critical components is another important challenge. Rail vehicles consist of many components, including safety-critical parts. Lack of full traceability makes it difficult to analyze quality problems and carry out service actions.

In addition, engineering changes or supplier changes can affect vehicle compliance with homologation requirements. Lack of change control makes it difficult to assess their impact on quality and certification.

How Hicron helps

Hicron enables quality requirements to be linked with production and vehicle configuration. Thanks to SAP Quality Management, quality inspections, tests and results can be recorded in one system.

The Quality team gains access to complete documentation required for homologation, which makes preparation for audits and customer acceptance easier and reduces the risk of homologation delays.

SAP S/4HANA also enables vehicle configuration and components to be tracked throughout the lifecycle. Thanks to serialization and batch management, components can be linked to a specific vehicle. Quality can identify the scope of a problem faster and support corrective and service actions.

Hicron also enables engineering changes to be managed in connection with production and quality. SAP allows configuration changes and their impact on the production process to be tracked. The Quality team can see which vehicles are affected by a change, making compliance control and additional test planning easier.

Business value

better preparation for audits and customer acceptance,
greater control over quality and test documentation,
support for the homologation process,
reduced risk of homologation delays,
fuller traceability of critical components,
faster identification of the scope of quality issues,
better support for corrective and service actions,
control of the impact of engineering changes on homologation compliance.

Finance: revenue recognition, contract margin and budget

Rail vehicle contracts are executed over several years and include staged deliveries and payments linked to milestones. Linking revenue with actual program execution progress is complex and often handled manually.

The long program execution cycle and changes in material and production costs affect contract profitability. Lack of a current result forecast makes it difficult to respond early to financial risks.

A rail vehicle production program covers many cost areas and a long execution period. It is difficult to control the program budget and identify cost overruns without consistent financial and operational data.

How Hicron helps

Hicron enables revenue recognition based on contract execution progress. Thanks to Event-Based Revenue Recognition and Results Analysis in SAP S/4HANA, revenues can be calculated based on costs and the degree of project completion.

Finance gains consistency between project controlling and accounting, which makes period closing easier and improves reporting accuracy.

Hicron also enables ongoing monitoring of contract profitability during execution. Thanks to project controlling in SAP Project System, costs and revenues are analyzed at program level. Finance can see deviations and the forecast of the final result.

SAP Project System also supports program budget control. Budgeting and controlling functions enable comparison of plan and actual costs, identification of budget overruns and analysis of their sources.

Business value

revenue recognition linked to execution progress,
greater consistency between project controlling and accounting,
more accurate reporting of multi-year contracts,
easier period closing,
ongoing control of contract margin,
forecast of the final program result,
earlier identification of financial risks,
control of program budget and cost overruns.

IT: process standardization and easier system development

Rail vehicle production is carried out under contracts of different scope and structure. Many organizations develop dedicated system solutions for individual programs, which leads to a large number of system modifications.

Rail organizations often have many production plants using different systems and processes. Lack of standardization makes system maintenance, reporting and rollout to additional locations more difficult.

Another challenge is introducing system changes during long programs. Rail vehicle production programs last many years, and process and reporting requirement changes occur during that time. Introducing changes in systems can be time-consuming and risky.

How Hicron helps

Hicron helps standardize contract processes based on standard SAP S/4HANA functionality. Using SAP Project System and standard project scenarios reduces the need to create dedicated extensions.

IT maintains one consistent contract handling model, which makes system development and change implementation easier, reduces maintenance costs and simplifies upgrades.

Hicron also enables process and system standardization based on one SAP S/4HANA environment. A common data and process model makes it possible to support multiple plants in one system, while IT gains central management and reduces functional duplication.

SAP S/4HANA also enables system changes to be managed using standard functionality. Project and controlling processes can be configured without extensive modifications, and IT can introduce changes in a controlled and consistent way.

Business value

fewer dedicated extensions for individual programs,
one consistent contract handling model,
easier system development,
simpler upgrades,
lower maintenance costs,
process standardization between plants,
central management of the IT environment,
easier rollouts to additional locations,
greater flexibility of the IT environment during long programs.

HR: succession of experts, competence planning and knowledge transfer

Rail vehicle production relies on the knowledge of specialized engineers and system experts. The departure of key employees may create risks for the execution of multi-year programs.

Rail vehicle programs include different phases requiring different competencies. It is difficult to plan resource needs over a long time horizon without consistent data about competencies and development plans.

Knowledge related to the design and integration of rail vehicles is often concentrated in a narrow group of experts. Lack of structured knowledge transfer makes team development and building new specialists more difficult.

How Hicron helps

Hicron enables key roles to be identified and succession planned. Thanks to SAP SuccessFactors Succession & Development, successors can be identified and their development planned.

HR gains visibility of attrition risk and competence gaps, which supports knowledge transfer, talent development and greater stability of project teams.

Hicron also supports competence and workforce planning based on program needs. Workforce planning in SAP SuccessFactors enables forecasting of competency demand in subsequent program phases.

SAP SuccessFactors also allows competencies and employee development plans to be defined. HR can identify competence gaps and plan knowledge transfer, supporting the development of new experts.

Business value

identification of key expert roles,
succession planning for critical positions,
greater visibility of attrition risk,
identification of competence gaps,
long-term resource planning,
preparation of the organization for subsequent program phases,
structured knowledge transfer,
development of new experts,
greater stability of project teams.

ERP Value Check

You do not always need to start with a major transformation project. Sometimes the best first step is a diagnosis: what already works, what should be improved and where SAP can bring the greatest business value.

During ERP Value Check, we analyze the extent to which the current ERP environment supports processes typical for rail vehicle manufacturers.

In particular, we check:

whether the current system supports tender pipeline management and program sales,
how contract profitability is assessed already at the sales stage,
whether the organization manages contract options and extensions in one place,
how production is planned within multi-vehicle programs,
whether production sees dependencies between wagons in one trainset,
whether the organization has current visibility of vehicle production progress,
how procurement is planned for multi-year programs,
whether the system shows the impact of component shortages on the production program,
how quality requirements, tests, audits and homologation are managed,
whether traceability of critical components is linked to a specific vehicle,
how the impact of engineering changes on homologation compliance is controlled,
whether finance has consistency between project controlling and accounting,
whether margin, budget and final result forecast are monitored during the program,
where excessive system customization occurs,
whether processes are standardized between plants,
whether HR has visibility of key roles, competencies, succession and knowledge transfer.

The outcome of ERP Value Check is an initial map of the areas where SAP can generate the greatest business value – through optimization, system development or implementation.

Schedule your ERP Value Check

Is your ERP environment ready for AI?

AI can support manufacturing companies in data analysis, planning, risk identification and decision-making. To use this potential, however, an organization needs organized processes, high-quality data and an integrated system environment.

In rail vehicle manufacturing, data related to multi-year programs, vehicle configuration, critical components, delivery schedules, homologation, costs, margin and expert competencies is particularly important.

As part of ERP Value Check, we analyze not only opportunities for optimizing processes in SAP, but also the environment’s readiness to use AI: from data quality and process integration to areas where AI can genuinely support operational, planning and financial decisions.

Check whether your organization is ready for AI.

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