Mercedes-Benz shared the inner workings of its major rollout ROTF. Prateek Pardeshi checks the direct impact on the manufacturer’s production and the middleware as the backbones of future retail.
Buying a vehicle has been a task until now! It includes several layers requiring in-person meets to cover quotation, vehicle availability, choice limitation, waiting periods, test drives to ascertain the choice and whatnot. The last fiscal has seen Original Equipment Manufacturers (OEMs) adopt a single-window model and digitise the whole experience. Mercedes-Benz has gone a step beyond. Sensing the changing customer needs, the company, in India, rolled out its much-anticipated Retail Of The Future (ROTF) platform. Tested globally across markets like Sweden, Austria and South Africa it aims to bring about a digital revolution with the support of a well-oiled backend making India the fourth such market. For those needing time to get accustomed, ROTF is also made available offline with the processes unchanged irrespective of the medium. According to Martin Schwenk, Managing Director and CEO, Mercedes-Benz India, the ultimate objective is to offer the customer an integrated digital experience. “We are proud to implement the ROTF in India after successfully establishing a robust digital backbone, which will support this significant transition in our retail business,” Schwenk stated.
The pillars of ROTF
India is the first country globally to get the ROTF for a Completely Knocked Down (CKD) driven market. The five pillars of ROTF consist of ‘Quotation’, ‘Order Booking’, ‘Order Finalisation’, ‘Invoicing’, and ‘Handover’. The backbone of the front-end which entails offering the customer a quote and the interface to book the vehicle is dependent on ‘Order Booking’, ‘Finalisation’ and ‘Invoicing’ at the backend of this gigantic retail exercise. When a customer logs in to the ROTF interface, at the point of booking, on finalising the model of his or her choice, the interface seeks a booking amount of Rs.50,000 (completely refundable at any stage without any cancellation charge) and blocks the vehicle for 14 days in the name of the customer on the basis of the Vehicle Identification Number (VIN). The customer is given a complete freehand in terms of leveraging the loyalty programmes and or choosing the franchise partner.
A One Time Password (OTP) is generated at the time of booking called Declaration of Consent (DOC). Customer privacy is at the forefront of this process and the customer is offered hand-holding at every step. The process is further sealed with an additional security layer of a digital signature for verification and validation. Notably, at the backend, ‘Order Finalisation’ requires the customer to produce valid documents for the same digitally. At this stage, the customer is synced with the production status with a tentative handover date locked in the system. With demand claimed to outdo supply as of current, it is said to streamline the process using the tools of software-defined production systems under the realm of the Industrial Internet of Things (IIoT). Besides offering flexibility in finance, at the backend, the OEM at the ‘Handover’ stage involves the VAHAN portal registration ahead of the customer handover. This is also synced to the ‘Handover App.’. The handover is followed by an in-person from a Mercedes-Benz India executive to help familiarise the customer with his or her new purchase.
Shopfloor link
A major initiative in their 27-year old legacy of the Mercedes-Benz business in India, the ROTF has a direct bearing on the shopfloor process back at the Mercedes-Benz manufacturing plant. With the likes of AMG and the S-Class localised, it has heightened the pace of activity at the shop floor level. Furthermore, ROTF in effect has connected the manufacturing plant at the backend with the front end of the entire customer retail experience. Using IIoT, Mercedes-Benz India has been able to drive a V-shaped recovery and a strong Q32022 performance. While disrupting the luxury auto retail, it has been able to re-imagine the role of the back end driven by the production. Building on the success in online sales known to 
contribute over 20 per cent of the entire sales, the OEM is claimed to have built a transparent system that not only avoids loopholes such as discrepancy in prices but critically helps avoid delayed delivery timelines. Confident of growing sales through this medium, Mercedes-Benz has launched 13 new products in India, produced from the Chakan, Pune facility which is known to be state-of-the-art. Among new technological innovations are the use of robots and AR/VR-based training modules.
Schwenk revealed that the company pumped in Rs.600 mn in the most comprehensive cross-functional project. It entailed 99,210 man-hours with a workforce of 175 plus pan India. The intense exercise was spread over a period of 24 months across three countries. Besides India, Mercedes-Benz Germany and Singapore were part of the entire exercise. The production facility of Mercedes-Benz India is backed by Rs.2,200 crore investment with the largest installed production capacity. Suppliers play a crucial role here. Material is sourced from different parts of the world over in sync with the ROTF. It is known to be directed to the production network and the finished vehicle. For instance, the supply of components to the plants is coordinated by an inbound logistics planner. For example, there is a logistics planner for just the engines. It entails optimal planning of the entire supply chain including monitoring the supply streams and the cost compliance of the inbound logistics.
In comparison to the traditional model, the company is expected to be able to overcome high inventory cost, high-cost structure, limitations on the availability of vehicles and tide over the high risks associated with the nature of the business. It also reduces the risk quotient for the dealer partners. Mercedes-Benz India is able to maintain a centralised national stock, and work with a central order management system with complete transparency. ACI
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