Smart Optimization Tool Enhanced a Global OEM´s Sales Strategy to Address EU Fit 55 Regulation
The client needed to meet the CO2 emissions regulatory objectives in sales of its fleet and minimize potential penalties while maximizing profitability.
saving euro cost in the first year of post-implementation
increased sales of vehicles with low CO2 emission
decision-making at all organizational levels by collaboration on the platform
Background and Challenge Story
A major automotive manufacturer was confronted with the with the daunting task based on the constantly updating regulations across multiple markets which aim to reduce emissions from road transport and provides the push for the automotive industry to shift towards zero-emission mobility. According to the regulations, every manufacturer must ensure that the average CO2 emissions from its fleet of newly registered vehicles in a calendar year do not exceed its specific annual emissions target. If they do, the manufacturer must pay a premium. Thus, the client was in need of planning and managing its fleet sales in order to fulfill the criteria and minimize fines imposed by the regulation.
In order to overcome this complex challenge, the manufacturer partnered with Adastra and leveraged our data analytics and sustainability expertise. The objective was to devise a rapid and effective solution that would not only adhere to strict EU environmental regulations but also ultimately lead to maximize profitability.
Solution Story
To overcome the regulatory challenges the client was facing, Adastra developed an AI-based optimization tool. The purpose of the solution is to provide strategic guidance and facilitate shaping global sales and marketing strategies to fulfill the regulatory CO2 objectives.
Adastra created an application and leveraged Oracle and SAP HANA to integrate the data from the entire value chain including sales, finance, production, and technical development. It featured a simulation layer powered by IBM Planning Analytics and a customizable reporting function with SAP Business Objects BI. Integrating Adastra OptiSuite into the solution allowed Adastra to produce AI-driven algorithms which create various scenarios that combines the specifications of individual cars, their technical parameters, financial plans and production plans. The result of the scenario planning is an optimized car mix for the sales and production team that takes into account the regulatory CO2 objectives. Moreover, optimization can be done manually or using the Adastra OptiSuite engine.
Adastra’s state-of-the-art AI-based optimization tool was developed to address the challenge of reducing CO2 emissions of the sold fleet and provided two key recommendations to help the client tackle the challenge:
- Increase sales on the current offers by shaping customer demand for cleaner vehicle options.
- Tailor the product development to focus on more environmentally conscious vehicles and features.
Impact
Our customized solution delivered notable benefits to the client after implementation. The alignment of sales and sustainability strategies allowed the increase of environmentally friendly vehicles in key markets such as Europe, India, Japan, and Korea while adhering to environmental commitments. The client was able to make informed decisions and implement effective sales strategies, resulting in saving millions of euros in the first year after the implementation.
Moreover, the AI-based optimization tool accelerated decision-making by promoting collaboration through the platform. This enhanced communication and cooperation within the organization, enabling quicker and more informed decisions, ultimately resulting in streamlined processes, increased productivity, and a more agile organization.
