ERP System Facilitates Digital Transformation in New Energy

Vehicle Enterprises: A Case Study of Xiaomi Automobile Factory

Xin Shen

School of Business Administration and Tourism Management, Yunnan University,

East Outer Ring Road, Chenggong District, Kunming 650500, China

Keywords: ERP System, Digital Transformation, New Energy Vehicles, Xiaomi Automobile Factory.

Abstract: In the era of digital economy, the new energy vehicle (NEV) industry is facing challenges from traditional

manufacturing models, such as low efficiency, high costs, and insufficient flexibility, which urgently require

the adoption of advanced digital technologies for digital transformation to enhance competitiveness. This

paper takes Xiaomi Automobile Factory as an example to explore the critical role of enterprise resource

planning (ERP) system in the digital transformation of NEV enterprises. Through case analysis, combined

with the practical application of ERP system in Xiaomi's core operational areas— supply chain, finance,

production, and sales—the study reveals that ERP system supports Xiaomi's "tripartite integration" digital

transformation framework. Specifically, ERP system have significantly optimized supply chain collaboration

efficiency, reduced procurement and inventory costs, established a comprehensive financial system and

intelligent production planning, while improving customer service accuracy and market responsiveness. By

analyzing the successful implementation of the ERP system at Xiaomi Automobile Factory, this research

provides valuable insights for the digital transformation of other NEV enterprises, thereby promoting the

development and innovation of the NEV industry.

1 INTRODUCTION

In the digital economy era, the significance of

enterprise digital transformation has become

increasingly prominent, particularly for the

manufacturing sector, where it has emerged as a core

driver for enhancing competitiveness. Propelled by

energy conservation/emission reduction mandates

and the wave of intelligent manufacturing, the

automotive industry—a pillar of national

economies—is undergoing a paradigm shift from

"traditional manufacturing" to "smart manufacturing"

(Xiao, Cao, & Xia, 2024). Within this transition, new

energy vehicles (NEVs) have emerged as a disruptive

force, rapidly capturing market share. Meanwhile,

traditional automakers constrained by rigid assembly

line processes—plagued by high costs, low efficiency,

and operational inflexibility—struggle to adapt to the

NEV market's demands for personalization and

sustainability (Yao, 2024). Against this backdrop,

enterprise resource planning (ERP) system has

proven instrumental in driving digital transformation

https://orcid.org/0009-0000-0126-5551

for NEV enterprises. These systems inject dynamism

into organizational restructuring by pursuing three

strategic objectives: efficiency enhancement, quality

optimization, and ecosystem collaboration. Through

holistic reinvention of automotive supply chains,

financial operations, production systems, and beyond,

ERP implementation represents an essential pathway

for overcoming industry bottlenecks and achieving

sustainable development (Tang, 2024).

As a representative case of "cross-boundary

vehicle manufacturing," Xiaomi Automobile Factory

has positioned digital transformation as its strategic

core. Utilizing the SAP S/4HANA Cloud ERP system

as a critical tool, the company has efficiently

integrated supply chain, financial, and production

processes, achieving the goals of cost reduction and

efficiency improvement. This initiative demonstrates

unique research value and practical significance in the

field of intelligent manufacturing. Therefore, this

paper selects Xiaomi Automobile Factory as the

research subject. The study primarily employs case

analysis to: (1) Track and analyze the implementation

Shen, X.

ERP System Facilitates Digital Transformation in New Energy Vehicle Enterprises: A Case Study of Xiaomi Automobile Factory.

DOI: 10.5220/0013840700004719

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on E-commerce and Modern Logistics (ICEML 2025), pages 169-174

ISBN: 978-989-758-775-7

169

process of the ERP system at Xiaomi Automobile

Factory; (2) Collect relevant data to evaluate the

operational benefits of the ERP system; (3)

Investigate the pathways and value creation

mechanisms of its digital transformation.

Through this approach, the research aims to

elucidate the critical role of ERP system in Xiaomi

Automobile Factory’s digital transformation. The

findings are expected to provide strategic references

for other new energy vehicle (NEV) enterprises and

contribute to strengthening the competitive position

of China’s automotive industry in the global market.

2 ERP MANAGEMENT SYSTEM

The ERP system is a highly integrated information

management framework designed to consolidate and

manage core business processes and resources across

various organizational departments through a unified

platform. Typically, ERP system integrates

functional modules such as supply chain

management, finance, production, and sales

operations into a real-time data sharing and

processing platform. This integrated management

system eliminates information silos between

departments through data consolidation, enabling

real-time organizational collaboration and providing

decision-making support. Furthermore, ERP system

facilitates continuous monitoring and analytical

reporting of enterprise operations, allowing

management to promptly identify operational

challenges and opportunities. Effective

implementation of ERP system can significantly

enhance organizational management efficiency and

operational performance, playing a crucial role in

data synchronization, resource allocation

optimization, and risk mitigation, thereby

strengthening corporate competitiveness in the

marketplace (Bao, 2024).

3 APPLICATION OF ERP

MANAGEMENT SYSTEM IN

XIAOMI AUTOMOBILE

FACTORY

Positioning digital transformation as a core strategic

initiative, Xiaomi Automobile has established an

integrated tripartite digital transformation framework

encompassing a centralized data platform, cloud-

based architecture, and smart manufacturing systems,

with the ERP system serving as a pivotal component.

As detailed in Table 1, the ERP system demonstrates

critical functional alignments with Xiaomi's digital

transformation architecture. The projected

implementation timeline of the ERP system in

Xiaomi's automotive production facilities is

systematically outlined in Table 2 (ERPYUAN,

2024).

Table 1: Integration of ERP system with Xiaomi Automobile's digital transformation framework.

Com

onent Functional Im

lementation

Centralized Data Platform

Unified collection, storage, and analysis of enterprise-wide operational data to support

cross-de

artmental business decision-makin

Cloud Architecture

Implementation of SAP S/4HANA Cloud establishes flexible, scalable, and easily

deployable IT infrastructure that accommodates rapid business expansion

Smart Manufacturing

ERP-MES integration (e.g., with JianDaoYun MES) facilitates digital transformation and

intelligent automation of production processes

Table 2: Projected implementation timeline of ERP system in Xiaomi Automotive.

Yea

Phase Key Activities

2021

Planning & Requirements

Analysis

• March project initiation

• ERP strategic alignment

• Cross-functional re

uirements ma

2022 Development & Testing

• Soft tooling vehicle completion

• ERP-enabled supply chain coordination

• Production simulation validation

2023 Mass Production Readiness

• ERP-driven production scheduling

• AI-powered quality control integration

• Automated order management deployment

2024 Commercialization & Delivery

• ERP-channel integration (sales networks)

• Real-time customer order tracking

• Post-sales service digitization

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3.1 Supply Chain Management

Supply Chain Management (SCM) refers to the

systematic coordination of suppliers, manufacturers,

and distribution facilities to optimize manufacturing,

logistics, distribution, and retail operations,

encompassing the complete cycle from raw material

procurement to finished product delivery. By

implementing ERP systems to facilitate intelligent

supply chain optimization, Xiaomi Automobile

achieves cost efficiency while maximizing

operational returns. The specific applications of the

ERP system in supply chain management at Xiaomi

Automobile's manufacturing facilities are detailed in

Table 3 (Pei, 2023).

Table 3: ERP system applications in supply Chain management.

Components Implementation

Supplier Management

Centralized management of supplier information including qualifications, performance

evaluation, and contract administration, eliminating information silos to ensure supply chain

stabilit

and reliabilit

procurement

Automated purchase order generation reduces manual operations, shortens procurement cycles,

and lowers purchasing costs

Inventory Control

Real-time inventory monitoring with stock alerts and automated replenishment functions

enhances inventor

turnover rates and reduces holdin

costs

Logistics

Integration of logistics information achieves process transparency, improving supply chain

efficienc

and o

erational a

ilit

3.2 Financial Management

The ERP system at Xiaomi Automobile enables

comprehensive financial management spanning from

accounting operations to analytical processes.

Through ERP implementation, financial data is

systematically recorded, accounting procedures

standardized, and a unified control framework

established. By adopting an integrated end-to-end

management system, financial personnel transition

from manual bookkeeping to a centralized model

focusing on fund management, financial reporting,

and regulatory compliance. This ERP-driven

transformation optimizes financial system

functionalities through enhanced data transparency

and operational efficiency, ultimately elevating

financial governance capabilities and strategic

decision-making proficiency (Han, 2024).

3.3 Production Manufacturing

Automobiles represent highly sophisticated industrial

products, where the manufacturing process

constitutes the pivotal phase for Xiaomi Automobile's

transition from conceptual design to mass production.

This stage directly impacts core competitiveness, cost

structure optimization, and market performance

metrics. By implementing digitalized and intelligent

manufacturing systems through innovative

technological integration, Xiaomi achieves

accelerated production scaling while maintaining

stringent quality assurance and safety compliance

protocols, thereby establishing a sustainable presence

in the global new energy vehicle market (Wang,

2024). The specific applications of the ERP system in

Xiaomi Automobile's production manufacturing

processes are systematically detailed in Table 4.

Table 4: ERP system applications in production manufacturing.

Production Process Components ERP System Implementation

Production Planning

ERP automatically generates production schedules based on market demand

analysis, order portfolios, and inventory profiles to ensure optimal resource

allocation

Production Progress Management

Real-time monitoring of manufacturing workflows through ERP enables prompt

anomaly resolution and strict schedule adherence

Quality Control

ERP-integrated quality management modules enforce end-to-end traceability from

raw material inspections to finished product testing, ensuring compliance with

QA/QC standards

ERP System Facilitates Digital Transformation in New Energy Vehicle Enterprises: A Case Study of Xiaomi Automobile Factory

171

3.4 Sales & Customer Relationship

Management

The sales and customer engagement process

significantly contribute to Xiaomi Automobile's

market value realization, directly influencing brand

appeal, customer retention rates, and sustainable

growth. By leveraging online-offline integrated sales

channels, transparent pricing strategies, and data-

driven order management systems, Xiaomi efficiently

engages target consumers while establishing trust.

Capitalizing on its intelligent ecosystem

advantages—including vehicle-infotainment

connectivity and user profiling analytics—the

company delivers personalized services and full

lifecycle experiences encompassing test drives,

delivery, after-sales support, and over-the-air (OTA)

updates. This approach not only strengthens customer

loyalty but also drives product innovation through

user feedback mechanisms, ultimately achieving

sales breakthroughs and brand differentiation in the

competitive new energy vehicle market. The ERP

system's applications in post-delivery customer

relationship management at Xiaomi Automobile are

detailed in Table 5 (Wang, 2024).

Table 5: ERP system applications in customer relationship

management.

CRM

Components

ERP System Implementation

Sales Channel

Integration

ERP unifies online-offline sales

channels with advanced data analytics

capabilities, enabling statistical analysis

of sales performance to inform strategy

formulation

Customer

Service

ERP delivers full lifecycle service

management through comprehensive

tracking of customer profiles and

requirements, facilitating personalized

offerings that enhance satisfaction and

loyalty rates

Order

Management

ERP enables end-to-end order

processing from reception to fulfillment,

ensuring operational efficiency and

delivery accuracy

4 BENEFITS OF ERP SYSTEM

IMPLEMENTATION AT

XIAOMI AUTOMOBILE

FACTORY

4.1 Cost Optimization & Efficiency

Enhancement

4.1.1 Reduction in Supply Chain,

Procurement, and Production Costs

Post-ERP implementation at Xiaomi Automobile's

manufacturing facilities, significant cost reductions

across supply chain operations, procurement

activities, and production processes have been

substantiated through recent financial disclosures, as

evidenced by empirical data from authoritative

sources (Daily Economic News, 2025; Wen, 2024; Lü,

2024). These cost-saving achievements are

systematically quantified in Table 6.

Table 6: Financial performance metrics of Xiaomi

Automobile.

Ite

2024Q2 2024Q3 2024Q4

Operating Revenue

(

Billion

)

64 97 167

Net Loss

(

billion

)

18 15 7

Gross Mar

(

)

15.4 17.1 18.5

Gross margin, a critical indicator of corporate

profitability, has remained at elevated levels for

Xiaomi Automobile since product launch. In Q4 2024,

the company achieved a gross margin of 18.5%,

significantly outperforming the industry average of

4.6%. Concurrently, quarterly operating revenue

demonstrated 72% sequential growth while net losses

continued to contract. Notably, these financial

improvements occurred during Xiaomi Automobile's

capital-intensive expansion phase, collectively

demonstrating exceptional operational efficiency that

suggests imminent profitability transition.

4.1.2 Operational Efficiency Improvement

Through Automation

The integration of ERP with Manufacturing

Execution Systems (MES) enables automated

purchase order generation and real-time monitoring

of equipment status and workflow processes. This

digital management framework replaces manual

supervision, reducing human intervention while

minimizing operational errors, thereby enhancing

both customer satisfaction and production efficiency.

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Although Xiaomi Automobile has not disclosed

specific metrics in this domain, industry

benchmarking data from Foton Motor's new energy

vehicle division reveals that ERP-MES integration

achieved a 10% improvement in order fulfillment

rates and 5% production efficiency gains,

demonstrating optimized resource utilization and

output maximization (China Listed Companies

Association, 2024).

Regarding financial operations, the ERP system

establishes a comprehensive financial analysis

framework that improves accounting efficiency and

accuracy. While Xiaomi Automobile has not released

quantitative evidence, Foton Motor's implementation

of its SuperTruck ERP system developed multi-

dimensional cost analysis models. Post-

implementation, their financial cost accounting

efficiency improved significantly, reducing monthly

closing cycles from 3 days to 1 day, with vehicle

standard cost accounting accuracy reaching 99% -

foundational enhancements for profitability

optimization (China Listed Companies Association,

2024).

4.2 Quality Enhancement & Process

Acceleration

4.2.1 Product Quality Improvement &

Defect Rate Reduction

The ERP system facilitates quality control by

replacing manual visual inspections with AI-powered

defect detection systems. Through real-time analysis

of production data, high-precision anomaly

identification is achieved, enabling proactive

mitigation of potential quality issues and elevating

defect-free rates to industry-leading benchmarks.

Concurrently, the ERP system implements

dynamic supplier evaluation protocols to eliminate

underperforming vendors, thereby optimizing

component procurement quality. For instance, the

stable supply partnership with Contemporary

Amperex Technology Co. Limited (CATL) ensures

consistent reliability of battery systems (Wang,

2024).

4.2.2 R&D-Production Cycle Compression

The ERP system integrates data flows between

Xiaomi Automobile Factory's R&D division (3,400-

member team) and manufacturing operations,

enabling real-time synchronization of design

blueprints, bill of materials (BOM), and production

scheduling. This digital thread eliminates operational

latency and resource waste. While quantitative cycle

metrics remain undisclosed, industry validation exists

through premium automakers like BMW AG, which

leverages analogous ERP solutions to achieve

seamless order-to-production integration and rapid

customization response capabilities.

Through ERP-optimized dual-shift operations at

the Beijing Yizhuang Factory, post-July 2024

production line upgrades doubled per-shift capacity.

Delivery cycles were compressed from 25-28 weeks

to under 20 weeks, with annual delivery targets

elevated from 100,000 to 135,000 units in 2024.

Concurrently, capacity utilization rates improved,

while economies of scale effectively diluted per-unit

R&D and manufacturing costs.

5 CONCLUSION

This study explores the application of ERP

management systems in Xiaomi Automobile's

manufacturing operations and their associated

benefits, revealing the critical role ERP systems play

in the digital transformation of new energy vehicle

enterprises. Through case analysis, it demonstrates

that ERP systems significantly enhance operational

efficiency and reduce production costs by integrating

core processes across supply chain management,

financial operations, production planning, and sales.

Key outcomes include optimized supply chain

collaboration, standardized financial workflows,

intelligent production scheduling, and personalized

customer service. The implementation of ERP

systems has driven Xiaomi's digital transformation,

enabling the achievement of cost reduction,

efficiency improvement, quality enhancement, and

accelerated production timelines. These

advancements have supported rapid sales growth in a

highly competitive market. The findings indicate that

Xiaomi's successful practices provide valuable

insights for digital transformation initiatives in the

new energy vehicle industry. As artificial intelligence

(AI), the Internet of Things (IoT), and blockchain

technologies continue to evolve, the functional scope

of ERP systems will expand further. These systems

not only help enterprises eliminate information silos

but also optimize resource allocation and operational

processes through data-driven decision-making. For

other new energy vehicle companies pursuing ERP-

enabled digital transformation, it is recommended to

prioritize alignment between system capabilities and

business requirements, strengthen cross-departmental

collaboration, and actively explore open ecosystem

partnerships. Such strategic measures will ensure

ERP System Facilitates Digital Transformation in New Energy Vehicle Enterprises: A Case Study of Xiaomi Automobile Factory

173

sustainable development amid the dual trends of

green energy adoption and intelligent digitalization,

injecting innovation momentum into the automotive

industry's ongoing transformation.

While this research systematically examines the

role of ERP systems in Xiaomi Automotive's digital

transformation, several methodological limitations

warrant acknowledgment. The single-case study

design, focused on one enterprise, restricts the

generalizability of conclusions, necessitating further

validation through comparative multi-case analyses.

Additionally, limited access to Xiaomi's operational

specifics—such as ERP implementation timelines

and financial reconciliation efficiency—has required

reliance on inferential reasoning and hypothetical

assumptions derived from disclosures by peer

enterprises, potentially affecting analytical precision.

Furthermore, the constrained research timeframe

precluded assessment of ERP systems' long-term

strategic impacts on Xiaomi Automotive.

Future research directions include extending the

observation window to evaluate ERP's sustained

organizational influence, systematically monitoring

Xiaomi's official disclosures to collect operational

datasets, and refining implementation benefit

analyses to enhance scholarly rigor. Comparative

investigations across NEV manufacturers of varying

scales will empirically validate ERP systems'

adaptability in automotive digital transformation

initiatives, while cross-industry benchmarking could

reveal sector-specific optimization pathways. These

efforts will advance theoretical frameworks for

intelligent manufacturing ecosystems while

informing practical strategies for Industry 4.0

adoption.

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