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


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