Productivity in the Automotive Sector demands smarter ERP Solutions

Friday, August 21, 2020


The global automotive business is experiencing rapid change. Even as it braces itself for the impact of trade wars and economic slowdown in China and India, OEMs are re-building their organizational structures to create lean and efficient set-ups. The auto sector has begun to prepare for several potentially disruptive challenges: Industry 4.0, stricter emissions regime, and the massive push towards electrification. This worldwide restructuring of their operations and supply chains is aimed at being profitable in a time of unprecedented change. Key to building a world-class operation is a future-ready ERP solution that can give OEMs the competitive edge.

Integrated shop floor

The manufacturing process is becoming increasingly integrated with the larger manufacturing eco-system. With big data and robotics, every vehicle, indeed every vehicle part manufactured can now be tracked online making real-time adjustments in production possible. This data can be looped back into the manufacturing eco-system: to inventory management, defect tracking, production scheduling and time to market response. The IoT is also transforming global supply chains as suppliers track usage patterns, and respond to changes anywhere in the global business, in real time.

ERP solutions are enabling smart integration helping OEMs work ever more collaboratively with their worldwide supplier networks, even choosing the right suppliers across various component categories to ensure alignment with manufacturing requirements. This is helping OEMs lower operational costs and enhance their return on investment.

Software-driven process

Big data is transforming OEMs from not just being car manufacturers but also users of diverse software from design to product updates, and CRM. From shop floor to factory gate, and from dealer showrooms to aftermarket service, IT enablement is driving change. Moreover, compliance requirements for eco-friendly materials, and emission norms is generating data in their trillions that can be analyzed to create value across the entire manufacturing process. This is where a future-ready ERP solution can unlock value enabling OEMs to create an agile and profitable manufacturing organization.

Integration with financial functions

No company can expect to be profitable if its financial functions aren’t aligned to realities of the manufacturing process. Here is where ERP can help OEMs to make their operations more cohesive, weeding out inefficiencies and identifying synergies. ERP solutions can create a connected value chain that kicks in from supplier portals and which can are linked to the OEM’s financial modules. This helps the tracking of RFQs, bills, invoices and their impact on revenues, in real time.

From legacy to cloud-based solutions:

To benefit from tech-enabled change, OEMs must invest in ERP solutions that are future ready. Legacy systems can serve the purpose up to a point but the advantages of having a bespoke solution is essential to staying ahead of competition. The future belongs to cloud-based ERP systems that are easier to implement and manage, and integrate men, machines and materials seamlessly. This provides real time access to all stakeholders from a data perspective without having to compromise on potential benefits that would be lost with multiple systems.

Mobile-enabled ERP

While the shop floor gets integrated across supply, finance and inventory, what facilitates the human capital element into the entire process is mobile-enabled ERP solutions can empower employees across functions to align with challenges from supply to production, purchase to invoicing, and inventory management. A mobile-enabled solution guarantees a real time response to the challenges of auto manufacturing.