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


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

●     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
      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.

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