Importance of ERP in the auto component industry in India – reality and challenges

The Indian Automobile Component Industry has emerged as a sunrise sector of the Indian manufacturing industry and a key stakeholder in the global automobile manufacturing industry.

The Automotive Industry in India is estimated to be a 145 billion dollars segment in the year 2016 and will contribute to about 10% of India’s GDP. The Indian auto components industry is one of the fastest growing manufacturing sectors which is both forward and backward integrated with other engineering and manufacturing divisions in the country.

In the eve-changing ever-growing and competitive marketplace, it is very important for Automotive manufacturers gain operation excellence. To sustain the current growth trajectory and face the increasing competition in the global and domestic markets, the Indian auto component firms will have to create a new set of competitive advantages based on value-capture rather than cost reduction. IT is a key enabler for the Indian auto component firms to achieve these aspirations

Auto component manufacturers face challenges when they require Quick access to reliable business information as the auto component firms possess disparate systems including manual paper-based processes that lead to disconnect amongst the supply chain constituents which impedes real-time decision-making and secondly, it results in creation of ad-hoc sources of information, which in turn leads to problem of non-accurate data.

The auto component manufacturers incur high costs in inventory due to lack of visibility of the stock in work-in-progress stage. An insight on the inventory in WIP stage can help the companies plan their production more efficiently towards meeting the delivery schedules.

A well implemented ERP gives visibility into strategic information at every juncture .An ERP solution Improves business processes and enhances collaboration. With visibility throughout the operation and embedded support for a wide variety of manufacturing processes – including make-to-stock, make-to-order, configure-to-order, engineer-to-order, just-in-time (JIT) manufacturing and materials control , and lean operations, ERP for Automotive helps  gain operational excellence. Some of the other benefits of an ERP implementation are elucidated below .

* Increase Operational efficiency
* Gain Business Visibility
* Improve Customer Relationship
* Streamline Production
* Monitor & Control Expenses
* Reduce errors
* Get accurate, timely information
* Global reach, better inventory visibility, reduced distribution costs

For automotive suppliers, it is critical that they have a capability to integrate information and processes within the company, as well as between themselves and their customers and suppliers, so that they can deal automatically with changes of whatever nature and pass information on to the required area to take action. By implementing collaborative processes, component manufacturers can establish long-term contractual relationships with their trusted partners

Given the increasingly complex world in which automotive suppliers operate, it is hard to see how better business practices can be instituted effectively without appropriate technology. In order to achieve their goals, automotive suppliers need to consider ERP systems that provide an integrated view of various processes.

Sage India offers ERP solutions for Auto component industry in India, you can visit


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