New Technology Alliance Aims to Revolutionize the Automotive Supply Chain

Cap Gemini Ernst & Young and SAP are joining forces to offer the automotive industry major advances in responsiveness, flexibility and cost efficiency

August 20, 2001 - Cap Gemini Ernst & Young and SAP today announced plans to work together on a global programme to revolutionize the automotive supply chain. The new proposed alliance between the two global industry leaders will leverage each other's strengths and expertise in the automotive industry to address some of the industry's most pressing challenges related to just-in-time delivery and the make-to-order process.

The two companies will develop a solution that merges Cap Gemini Ernst & Young's Adaptive Automotive Enterprise Model with SAP's mySAPT Automotive solution. The Adaptive Automotive Enterprise Model (AAEM) provides the vision of how an organisation can sustain business success in this rapidly changing environment and the building blocks to take this organisation from where it is now to this future goal. The combined solution will address the growing need for the automotive industry to satisfy customers by:

• Producing customized vehicles in a shorter delivery timeframe.
• Building vehicles in smaller quantities close to the market demand.
• Achieving complete supply chain visibility from component manufacture to showroom for all stakeholders, including automobile manufacturers, suppliers, dealers and consumers.
• Reducing time-to-market for new models by better integration of product design and manufacturing.
• Allowing suppliers, OEMs and dealers to constantly adapt their strategies, processes and systems to meet the ever-changing needs of the automotive market.

SAP's mySAP Automotive offers a single internet-enabled platform for engineering, planning, supply chain management, procurement and customer relationship management, allowing customers to monitor changes in vehicle development and production phases.

Cap Gemini Ernst & Young's Adaptive Automotive Enterprise Model (AAEM) embodies highly advanced concepts in Make-to-Order and Locate-to-Order processes. The model enables an OEM to capture and integrate data from all parts of the supply chain in real time and modify its manufacturing and logistics plans to speed the entire vehicle production process. On longer timescales, the model enables seamless co-operation between different stakeholders in the supply chain to plan and collaborate on new vehicle launches, and enable manufacturers to match the supply network to customer demand.

Key concepts underlying the AAEM are:

• 'Adaptive' - meaning the continuous building and rebuilding of strategy and operations across the extended enterprise to meet evolving customer demands.
• Use of 'order to delivery' concepts to put the individual customer order at centre stage in the complete end-to-end supply chain, with immediate confirmation of delivery date based on critical constraints.
• Synchronisation of inbound logistics, vehicle assembly and outbound logistics using integrated, web enabled IT systems to link all players in the supply chain.
• Use of 'Adaptive Manufacturing' based on the sequencing system as the 'heartbeat' of the manufacturing process, with live feedback to enable instant resequencing.

The companies expect to leverage Cap Gemini Ernst & Young's SAP Automotive Center of Excellence in Detroit to assist their clients in fully leveraging the new mySAP-based solution.

Nils Herzberg, senior vice president of the Discrete Industry Sector of SAP, said: "We are very pleased to be working with Cap Gemini Ernst & Young, leveraging the industry expertise and technology that they have built into their Adaptive Automotive Enterprise Model. Merging these solutions to revolutionize the automotive industry demonstrates our commitment to meet the growing needs of our automotive customers."

Kevin Mahanay, head of Cap Gemini Ernst & Young's Automotive Global Sector Unit, said: "It's no secret that automotive supply chains worldwide are in urgent need of a comprehensive transformation if the problems of vast excess stocks, poor co-ordination, long customer waiting times and price pressure are ever to be solved. Partnering with SAP enables us to address

these obstacles and bring the benefits of our model to market much faster. The breadth of functions in mySAP Automotive makes it an ideal platform for the full implementation of the model."

The programme starts immediately, with Cap Gemini Ernst & Young and SAP joint teams based primarily in France, Germany, the UK and the US. Senior automotive industry executives will have a chance to participate in the first demonstration of key elements in the solution at the Cap Gemini Ernst & Young Automotive Summit in Bonn, Germany on 7-9 October 2001.

-ENDS-

SAP is the world's leading provider of e-business software solutions. Through the mySAP.com® e-business platform, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. Today more than 13,000 companies in over 100 countries run more than 30,000 installations of SAP® software. With subsidiaries in over 50 countries, the company is listed on several exchanges including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com)

Cap Gemini Ernst & Young is one of the largest management and IT consulting firms in the world. The company offers management and IT consulting services, systems integration, and technology development, design and outsourcing capabilities on a global scale to help businesses continue to implement growth strategies and leverage technology in the new economy. The organization employs about 60,000 people worldwide and reports global revenues of about 8.5 billion euros (2000 pro forma).

More information about individual service lines, offices and research is available at www.cgey.com .

This press release contains forward-looking statements based on beliefs of SAP management. Any statements contained in this press release that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "project," "should," "will" and similar expressions as they relate to SAP are intended to identify such forward-looking statements. Such statements reflect the current views and assumptions of SAP, and all forward-looking statements are subject to various risks and uncertainties that could cause results to differ materially from expectations. The factors that could affect future SAP financial results are discussed more fully in SAP filings with the U.S. Securities and Exchange Commission (the "SEC"), including the SAP Annual Report on Form 20-F for 1999 filed with the SEC on April 7, 2000. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. SAP undertakes no obligation to publicly update or revise any forward-looking statements.

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For more information, press only:

Philippe Guichardaz, Cap Gemini Ernst & Young, +33 (1) 47 54 50 00

Gerhard Rickes, SAP, +49 6227-7-44217, press@sap.com

SAP Americas Press Office, +1 (610) 661-3200

Jason Loesche, SAP America, 610-661-8541, j.loesche@sap.com