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 http://www.sagesoftware.co.in

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India ERP Market – A scenario

In the last decade, ERP software has exploded into the global business landscape. With the opening up of the Indian economy, there has been a turnaround growth in different industry verticals thereby helping them reach a level of maturity that demands advanced technology to efficiently manage and streamline their processes. This growth and along with the associated competition and quest for enhancing market share has led the organizations to re-look at its processes and procedures and put in place proper processes enablers and solutions to make its business more efficient and effective. Many Indian industries already have realized the need for ERP solutions, and the industry-related market growth should match the expansion of the sector as a whole.

According to a research report, The Indian ERP market experienced compounded annual growth rate of 25.2 per cent during the period 2004-2009. The market was $83 million in 2004, and is projected to be around $160-180 million in 2010. Some of the potential target segments which have shown high penetration are Automotive, Steel, Consumer Durables, Engineering, Retail, Communications and Textiles thereby making it attractive for the ERP vendors

An ERP package can streamline and automate different important functions of an organisation such as accounts payable, accounts receivable, activity management, benefits administration, and billing, invoicing and cost tracking (for project-based businesses), payroll, Sales and Marketing. With ERP, companies can also improve cash management, while manufacturing firms can practice more effective capacity planning and cost containment.

Major Benefits

●     A primary benefit of ERP is easier access to reliable, integrated information, elimination of redundant data and the rationalization of processes, which results in substantial cost savings.

●    It enables decision-makers to have an enterprise-wide view of the information they need in a timely, reliable and consistent fashion. The system provides consistency, visibility and transparency across the entire enterprise.

●     The integration among business functions facilitates communication and information sharing, leading to dramatic gains in productivity and speed.

Market Trends in the Indian ERP Market

●     SMBs as a potential market for ERP Vendors: Most of the mid sized organizations are working with applications which are non-integrated and on disparate technology architectures, built in-house. This has resulted redundant technology, loss of support, non availability of critical information at the right time resulting in overall business loss. ERP vendors in India will have a great opportunity when they explore into the untapped areas of the SME segment with innovative practices tuned to mid size organisations processes and business needs. Companies like Sage Software has focused on this segment in a major way, which we can see their various product offerings for SMBs on http://www.sagesoftware.co.in

●     Adoption of ERP as a Service (SaaS) SaaS (Software-as-a-Service)-based Enterprise Resource Planning (ERP) is an on-demand deployment of ERP software, where the user can access the software through license as a Web-based service. It provides an alternative to implementation or maintaining ERP software. SaaS – based ERP includes finance, order management, inventory control, purchasing and manufacturing functionality. The increasing popularity of the SaaS-based applications account for the growth of ERP, as the enterprise resources are maintained by a service provider.

There needs to be no doubt in the promising opportunities and prospects of ERP in the future in both software and non software sectors. Whether your growth plans include buying and selling in the global marketplace, adding more talent to your team, or expanding your services, ERP has the tools and the flexibility to successfully accelerate your business expansion and streamline existing business and operational processes thereby improving efficiency and productivity.

Understanding Operations Management In an ERP System

Along with the financial module perhaps the other most important module in an ERP which forms the core of the system is the operations module. The operations module comprises of the following elements.

Purchase Orders

The Purchase Orders module provides a comprehensive, fully integrated purchasing system. You can combine multiple purchase orders on a single receipt and multiple receipts on a single invoice. The Shippable Backorder report helps identify orders that can be completed based on recent Inventory Receipts.

Order Entry


The Order Entry module allows you to enter orders and sales returns and print invoices, credit notes, order confirmations, picking slips, and shipping labels. You can track transaction details and sales information on-screen and in printed reports. Order Entry integrates fully with Inventory Control and Accounts Receivable, so you always know your inventory levels and the status of your customer accounts.

Inventory Control

Inventory Control is a complete multi-location inventory management system that keeps track of stock levels and processes inventory receipts, shipments, returns, and adjustments. Inventory Control includes extensive screen inquiry and reporting functions to give you the detailed, current information crucial for effective inventory management.

Lot Tracking

Lot Tracking traces lots back to your vendors, or down to your clients, making this otherwise time-consuming task a snap.

Industries as diverse as pharmaceutical, food products, and plastics all require thorough inventory management – including the ability to determine at a moment’s notice which vendor provided you with a product, and which customer took delivery of a specific batch.

Lot Tracking gives you the power and flexibility to comply with regulatory requirements and to provide better service for your customers and internal operations staff.
Lot Tracking helps you manage such important information as source, expiration date, lot, and batch quarantine, as well as additions and maintenance. It is the ideal addition for clients in industries where lot and expiration tracking is crucial.

  • Full integration with Order Entry, Inventory Control, and Purchase Orders.
  • Flexible allocation/generation of lot numbers during PO receipt and order entry.
  • Full transaction history, through your organization, including purchases and sales inquiry.
  • Comprehensive set-up options for comprehensive lot inventory management.

Serialized Inventory

Serialized Inventory adds the power of serialized inventory management to your Inventory Control, Order Entry, and Purchase Orders modules.

  • Full integration with Order Entry, Inventory Control, and Purchase Orders.
  • Flexible allocation and generation of serial numbers during purchase order receipt and order entry, providing a single point of serial number entry/maintenance.
  • Full transaction history.
  • Comprehensive setup options for complete serialized inventory control.

This is the ideal complement for Sage Accpac customers using the Inventory Control, Order Entry, and Purchase Orders modules. With Serialized Inventory, you can track your serial numbers from Purchase Orders to Inventory Control to Order Entry and historical inquiry – with complete integration.

Serialized Inventory can automatically assign system-generated serial numbers to items not serialized at the time of receipt to help you keep better control of your stock. Serialized Inventory even allows you to track serial numbers by units of measure other than that in which you track your stock

Sage India launches Accpac ERP Professional edition for 1 Lakh to address the SME segment in India.

Madurai based Sun Pressing (P) Ltd, a leading automotive component manufacturing company to implement Sage Accpac ERP Professional edition

New DelhiApril 26, 2010 Sage India today announced the launch of Sage Accpac ERP Professional edition to address the requirements of the SME market in India. Mr. Thomas Abraham, Managing Director, Sage India, stated, “ There is a huge market in India of companies who have outgrown a basic accounting package and are seeking to implement an ERP. This segment is looking for an easy to use, fully featured ERP that can be implemented easily and is also cost effective. By introducing the Professional edition at Rs One Lakh, we believe the ‘sweet spot’ of SME decision making has been achieved. Sage Accpac has been localized to Indian tax requirements and comes with a built-in module for TDS. “

He further added, “We are also pleased to release Sage Accpac ERP version 5.6 with a host of new features. This includes Sage Accpac Intelligence that facilitates designing of reports from various data sources, Report scheduling, Report consolidation, Import & Export of reports and OLAP Cubes ”.

Madurai based Sun Pressing (P) Ltd, will be implementing Sage Accpac ERP Professional edition.. Commenting on their decision to implement Sage Accpac, Mr. D.Dhanushkodi, Managing Director, Sun Pressing (P) Ltd, said, “ Sage Accpac Professional edition is ideally suited for the SME segment and will help us make a significant improvement in our business processes. This is just what the doctor ordered for companies like ours that have been using basic accounting packages over the years and are now ready to make the change for a fully featured ERP at an affordable price. We are also pleased with the consulting services offered by Sage Accpac implementation partner, Excelencia (I) Tech Consulting who have specialized in the SME segment. We believe there are many companies in markets like Madurai who would be ready to adopt this edition of Sage Accpac ERP”.

Mr. R Balakrishnan, Director, Excelencia (I) Tech Consulting, said, “ Sage has launched the right ERP product which will help SMEs in markets like Chennai, Madurai, Coimbatore accelerate their decision making to move up the automation chain to a full fledged ERP. Our company has specialized in providing consulting services to this segment and will be in a position to hand hold such companies in their journey of discovering the benefits of an ERP”.

Sage Accpac Professional Edition comes with,

  • Core accounting and operational modules that includes, System Manager, General Ledger, Accounts Receivables, Account Payables, Inventory Control, Order Entry, Purchase Order, Optional Fields, TDS, Report Manager
  • Five concurrent users

Sage Accpac ERP 5.6 benefits include,

Version 5.6 offers even more benefits that help to make internal business processes operate faster and easier, so users can spend less time focusing on daily tasks and more time on planning for future business success. It is also runs on the new Microsoft® Windows® 7™ operating system.

    • Save money on upgrade costs with higher quality, and faster implementation procedures.
    • Access decision-quality information and significantly improve your visibility into business measurements with the new Sage Accpac Intelligence application.
    • Gain a faster and more accurate view of your cash position with improved workflow in Bank Services.
    • Improve the productivity of your workforce with the many customer-requested enhancements throughout the software.
    • Better manage growth expectations and create loyal customers, while streamlining operations with SageCRM.
    • Lower operations costs through better management of your inventory
    • Lower total cost of ownership and facilitate secure system through virtualization.
    • Accelerate your collections efforts and improve your cash flow utilizing the now built-in AR Inquiry tool. You can also use this powerful tool to improve your customer experiences by providing faster and more informed responses.

About Sage India

Sage India is a subsidiary of the £1, 295m Sage Group plc, a leading international supplier of business management software solutions and related products and services for small to mid-sized businesses. Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and the group now has 5.7 million customers and employs over 14800 people worldwide. It works with over 30,000 reseller partners and over 40,000 accountants worldwide.

Sage has been present in India since 2001 with Head office in New Delhi with branches in Mumbai, Bangalore and Chennai and over 40 employees in India across Sales, Pre Sales, Technical Support, Professional Services, R&D and Finance.  Sage has over 40 partners in India who sell and implement its ERP, CRM & Payroll solutions and over 1500 customers who use its products in India.

Sage products in India are,

      1. Sage Accpac ERP
      2. Sage SalesLogix
      3. Sage CRM
      4. SageCRM.com
      5. ACT! by Sage
      6. Sage Pocket Payroll

About Sun Pressing (P) Ltd

Sun Pressing (P) Ltd is an ISO 9001:2000 company which is a pioneer in the field of automotive component manufacturing in India. Head quartered in Madurai and with offices in Chennai, they manufacture metal components for automotive applications like Control Arms, Oil seal shells, bushing, pads, flanges, grommets, buffers and engine mounting and silent blocks for rubber compounded components, sub assemblies and fabricated items.

For more information please Visit: http://www.sagesoftware.co.in

ERP- Key Modules to Look at for a Non Manufacturing Company in India

Whether your growth plans include buying and selling in the global marketplace, adding more talent to your team, or expanding your services, Your ERP software, should have the tools and the flexibility to successfully accelerate your business expansion. Supporting different languages and multicurrency transactions the ERP should have the ability to scale up to requirements, must have flexible deployment options and should be modular in nature so you can start with the modules you need and more as you and your organization grows.

Some of the important modules you should consider while evaluating an ERP are:

Core Financial

The financial modules of accounts receivable, accounts payable, the general ledger, are powerful tools to help you confidently manage your business’ complex finances. Once integrated with full multicurrency capability, powerful bank reconciliation and tax reporting features, flexible transaction processing options, and informative dashboards for analytical reporting, The Financials of your ERP will help you to manage your finances accurately. 

Core Operational

The core operational modules of  inventory control, order entry, purchase orders, and project and job costing streamline the order fulfillment process so your business delivers every time. The order entry and purchase orders modules should be fully integrated with project and job costing, offering the most flexibility in the way transactions can be processed, while the inventory control module allows you to manage thousands of items and create flexible price lists. You even have the option of determining how and when inventory costing is performed, offering you ultimate freedom in managing your business your way.

Customer Relationship Management

With a CRM, you can automate your business processes to synchronize sales, marketing, and customer care activities across your organization, giving you complete business and customer perspectives, anytime, anywhere. Regardless of how, when, or where your customers, partners, and prospects choose to interact with your company, CRM solution once integrated with ERP the whole solution delivers comprehensive, easy-to-use tools to help you confidently manage these relationships.

Business Intelligence

A business intelligence tool is an enterprise-wide reporting, budgeting, and consolidations application that is ideal for employees in remote offices and disparate departments who need to manage, distribute, and collaborate information from a single source. It allows users to quickly capture and process information into meaningful reports and to securely distribute them across the entire enterprise on demand.

Project Job Costing

The Project Job Costing module provides an effective solution for project managers in construction, job service, and other professional industries who require a time-and-material system. It delivers the tools necessary to manage the simplest to most complex contract or job. It makes the estimating, tracking, costing, and billing of projects easy and manageable – simplifying cost control and planning. The Project Job Costing connects project activities with company financials, provides extensive inquiry and reporting capabilities and helps ensure accurate and timely accounting and billing processes throughout the life of a project.

With the powerful features you get in Project and Job Costing, you can identify potential issues and determine success factors for any project. The automated billing features in this job cost accounting software streamline customer invoicing and reduce the time spend managing this process.

Which ERP suits your organization?
There are various ERP packages available from various companies. Most importantly we need to see the size, budget and processes while determining the ERP vendor. Companies like Sage India are most suited for SME and SMB. To know more about their ERP you can visit at http://www.sagesoftware.co.in

Financial Management- The heart of an ERP application

The Financial management module in an ERP software is the core module around which other modules of the system revolves. Any change in the modules of Inventory, Operations, Projects or Manufacturing ultimately effects the finance module therefore it becomes important that finance module of ERP is robust and is integrated tightly with other modules.

Key elements of the finance module of an ERP system are:

General Ledger The General Ledger module is the foundation of your accounting system, with flexibility that meets the current and future financial management requirements of organizations of all types and sizes. It provides a robust feature set designed to handle your most demanding budgeting and processing needs. General Ledger fully integrates with all modules and is the key to maximizing the efficiency and accuracy of your financial data.

Accounts Payable– The Accounts Payable module provides robust accounting features to streamline your entire cash flow process and help you save money. Accounts Payable has a powerful library of accounting and reporting features that facilitate rapid entry of vendor invoices, flexible cash disbursement and full check reconciliation using Bank Services. With this comprehensive financial management tool, you can prioritize payments, negotiate terms, reduce bad debts,—all in a timely manner. With its powerful accounting and reporting features, Accounts Payable makes it easy to manage the detailed information your company requires.

Accounts Receivable– With the Accounts Receivable module, you can manage your customers and fine-tune customer relations by keeping track of important sales information and outstanding balances. Accounts Receivable allows you to easily apply cash to outstanding invoices and create recurring charges for quick invoicing of monthly charges. Accounts Receivable is also fully integrated with Bank Services, for complete bank reconciliation.

Multi-Currency– The Multi-Currency module delivers powerful and comprehensive multi-currency accounting functions. Sophisticated multi-currency accounting management and the ability to process transactions in any number of currencies give your business the global competitive edge required in today’s business world. This multi-currency accounting software empowers your business to effectively manage currency balances, execute accounting transactions, create reports, and much more.

Intercompany Transactions– The Intercompany Transactions module lets you enter General Ledger and Accounts Payable transactions that affect more than one company by automatically distributing transactions across two or more companies. In addition, its built-in flexibility automatically generates intercompany loan account entries according to user-defined relationship tables called routes. Intercompany Transactions simplifies and significantly reduces the amount of work required for intercompany accounting.

Companies like Sage India has various financial modules in their ERP solutions. To know more you can visit http://www.sagesoftware.co.in

 

Engineering Services and Project Consulting companies keep their projects ‘on track’ with Project Costing based ERP Software

Engineering Services and Project Consulting companies across disciplines, namely, electrical, mechanical, electronics, construction, architectural and those addressing infrastructure execute projects wherein tracking Project Budget and Actuals for material, labor, revenue and other expenses is essential. These companies execute a wide range of projects across industry verticals which make it important for them to adopt best practices.

In order to deliver on milestones within budget you need to have effective co-ordination and communication between the various departments involved, coupled with accurate tracking of materials, expenses and revenues. In other words, you require a strong project management and job costing mechanism built into a robust accounting system.

Business Challenge

For every project, post analysis and requirement scoping, a detailed design and component selection is undertaken. A Bill of materials is then created which goes to the purchase department wherein it has to be logged in against the specific project. In such a complex scenario there is a major challenge in material management, tracking and planning. Also since there are various costs that have to be incorporated into the project billing, such as material cost, time cost of man hours spent by personnel from multiple departments, you require a system that could ensure accurate time and materials costing while providing estimates to its clients. The billing process is also quite complex as invoices need to be raised at any phase of the project, hence it is essential for project cost visibility at all times in the project cycle.

Apart from needing a project job costing solution, there is also a requirement for accounting software that could meet your financial requirements, ranging from Indian tax compliance and payment, accounts receivable and accounts payable, bank reconciliation and general ledger.

All small and mid-sized companies are concerned about the impact that growth would have on its technological investments and would want a modular, scalable solution that would adapt to its unique workings and keep pace with the organization’s growth.

Solution

An ERP system having a strong project job costing module that integrates with the financial modules and purchase order addresses these rigorous requirements. A sophisticated, robust operating and accounting system, The Project Job Costing module makes the estimating, tracking, costing, and billing of projects easy and manageable, thus simplifying the cost control and planning. Project Job Costing connects project activities with company financials, provides extensive inquiry and reporting capabilities and helps ensure accurate and timely accounting and billing processes throughout the life of a project. The powerful features incorporated in

Project and Job Costing help in identifying potential issues, tracking costs, ensuring profitability and determining success factors for any project. The automated billing features in this job cost accounting software streamline customer invoicing and reduce the time spent managing this process.

Benefits

The project and job costing module in an ERP enables you to place orders, receive materials, track materials and assign manpower against specific projects. Since it automatically tracks the project cost throughout its life cycle, it allows the managers to keep track of project profitability at all times.

The strong reporting feature avoids delays in the project work flow due to communication lapses, prevents misallocation of materials and ensures effective utilization of manpower and resources to guarantee profitability.

By providing a greater understanding of the profitability and multi-level costing of projects, the ERP also helps you to estimate better. Since it helps in tracking arrival and dispatch of materials at all times, it also facilitates supply chain management.

Companies like Sage India has their ERP solutions which are project based ERP helping SME and SMB’s. You can know more by visiting http://www.sagesoftware.co.in