If you take a look at the exciting vehicles currently in production, you will see that the industry has made a phenomenal shift due to the myriad technological advances and inventions that are now incorporated into automobiles. Consumer expectations have changed as well, with car buyers expecting not only the new technology but also sustainability.
According to some market estimates, the automotive industry is likely to go through more rounds of innovation and growth and will achieve a value of more than $115 billion by the end of 2025. Enterprise Resource Planning (ERP) software has been a key enabler of many of the breakthroughs in the auto manufacturing space, allowing automotive equipment manufacturers to smoothly and efficiently manage their business processes and in turn, drive higher productivity and progress.
The automotive industry has utilized ERP solutions for quite a while. However, in the current scenario, ERP has become a necessity, considering the mounting competition in the sector, the rising demand for automotive production and the dire need to deliver top-flight products. As a result, automotive ERP has evolved to help each manufacturer deal with the fast-changing industry in a unique way. The implementation of an intelligent ERP allows companies to adapt the user experience to meet and take advantage of changing business environments and assists in the management of processes leading to improved production and delivery of high-end components. Briefly, below is how ERP technology is adding to the operational efficiency of auto manufacturing companies:
Streamlines Processes – Manufacturing and delivery of vehicle components depend upon a series of processes including production, procurement, assembly, testing, supply chain, etc. All these processes are complex and demand superior management and synchronization at all stages. ERP, by integrating internal and external processes and by automating them, brings efficiency into the system. It enhances the capabilities of auto components manufacturers to plan and execute processes, minimizing the need for manual intervention.
Strengthens Communication – Advanced, up-to-date ERP software facilitates a quicker and smoother flow of data and information within the organization. By automatically extracting and compiling data from different software systems and integrating it into a unified system, ERP software makes it possible for different process owners to gain access to real-time information on key aspects like resource availability, production and delivery status, inventory updates, etc. This information can be useful to managers making important decisions.
Enables real-time tracking – The implementation of ERP software enables manufacturers to track in detail the status of products and processes in action. It, therefore, lends visibility and control to the process owners who otherwise would receive status updates usually at the end of the day and only become aware of problems at a late stage. In the absence of an appropriate ERP solution, corrective measures cannot be taken quickly which leads to bigger problems.
Inventory Management – By integrating an ERP solution into their business system, manufacturers can anticipate the demand for products and materials well in advance. This helps them to plan their production and procurement processes. Situations like surplus or shortage of inventory can be avoided, as manufacturers are able to maintain a check on their inventory. This enables stock operations to be well optimized and the right products delivered at the right time to the right person.
Quality Check – Quality control is an important aspect in the automotive space, increasing the safety and durability of the vehicles manufactured. ERP solutions have advanced quality control features, which assist the quality aspect from the planning stage to the delivery of products. The progress of the components is tracked in real-time, and problems, if any, can be identified and corrected in real-time to enable high-quality standards to be met.
By utilizing an automotive ERP solution, auto components manufacturers are able to adopt a more streamlined approach to executing their processes, which assists them in reaching their goals of increased operational efficiency, a rise in productivity, a reduction of waste, a reduction in costs, and above all, a top customer experience. An ERP solution improves the ability of auto manufacturers to address industry standards, like Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE), as well as their customer’s needs in a better way. And that is where it all ends – the customer!
With all the latest innovations in-vehicle technology, the automotive sector will continue to grow in influence. Automotive ERP software will also continue to modernize and make deeper inroads in the industry and the impact would be a noteworthy one.
Author: Debajit Roy, Country Director, QAD India has over two decades of experience in the IT industry with a strong track record of driving digital and cloud solutions portfolio for the professional services segment. The company entered into the Indian Market in 2009, QAD Inc. (Nasdaq: QADA) (Nasdaq: QADB) is a leading provider of flexible, cloud-based enterprise software and services for global as well Indian manufacturing companies.
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