Key Features of Automotive ERP Software
The automotive manufacturing and supply industry is a challenging space. Whether you are an original parts manufacturer (OEM) or a supplier and distributor, speed and efficiency are always part of your imperative. Either you need to manufacture as quickly and efficiently as possible or you need to distribute and supply parts in the fastest, most cost-effective way you can. Either way, you need to harness the power of information. Enter: ERP solutions for the automotive industry. Automotive ERP software consolidates all the critical functions in the business into one unified platform for easy access and usability by the team. The result? Better efficiency, more agility, better business!
For what features should a company in the automotive industry be looking? We discuss some of the key factors to consider below.
The automotive industry is an industry governed by safety protocols, quality tracking, and warranties. It is also a highly regulated industry with industry bodies and government regulations having a great impact on the process. It is in this light that choosing an ERP software with powerful batch, parts, and materials suppliers tracing is critical. Should a warranty claim be made on a vehicle it is imperative to be able to trace the part back to the correct supplier. In addition, should any safety concerns arise with a part or raw material, your ability to trace not only where the material came from, but to isolate which production run or batches contain the offending item is critical to managing product recalls. Your ERP system of choice should be fully auditable, making sure that key parts and stock data are held: where have materials come from, and where have they gone? These are questions that your automotive ERP system needs to be able to answer easily.
As per any industry, holding excess stock results in excess holding costs, meaning less cash on hand. Depending on how high or low your company is on the automotive value chain, each stock holding item can be extremely expensive, so that even marginal miscalculations can have a large cost impact. Increasingly the industry is moving toward lean manufacturing which tries to reduce waste (such as holding costs) without sacrificing productivity (by having downtime while waiting for parts to arrive).
Most good ERP systems have inventory optimising modules. Inventory Control software helps to ensure data is entered only once into the system and then all aspects of the controlling inventory are updated. For example, capturing a customer sales order results in stock levels being checked and shortages highlighted. Once supplier purchase orders are captured, this information is reflected as being stock that is on order. With all of this information and having minimum and optimum stock levels per product, suggested purchase orders can be extracted and production schedules can be worked out. In a manufacturing environment Material Planning Requirement (MRP) reports and information can be extracted. Using costs on supplier invoices, costs prices are kept up to date, ensuring that Gross profit (GP) margins are correct. Using historical information, slow-moving and bestselling products are identified, so that the levels of safety stock can be correctly balanced. A good ERP system will help the automotive manufacturer or supplier maximise stock availability while minimising inventory holding costs.
Supply Chain Monitoring
When it comes to production keeping tabs on your supply chain is imperative, especially when demand is very high or volatile. If production schedules are tight it is necessary to keep a close eye on your suppliers and ensure that there are no issues with raw materials and parts. If these are seen, contingency plans can be made early on. Likewise, if demand drops off, your ERP system can timeously inform the production team of the decrease, so that excess stock is not manufactured, and unneeded raw materials are not ordered. Your ERP system should store historical data or demand and supply fluctuations, and these are invaluable in planning things such as production maintenance and downtime, as well as sales initiatives for when demand historically drops off.
Mobile Device Compatibility
Gone are the days where a dusty and greasy desktop PC sat on the workshop bench for production teams to update as a side-line task. Today’s ERP systems are all about on-the-go and on-the-job mobile data-capturing. Production and warehouse teams can scan barcodes or QR codes instantly for stock receiving, for stock issuing, updating batch numbers, dispatch numbers- all in real-time. When your ERP system takes on a mobile aspect, efficiency and compliance are exponentially increased as employees update your system almost effortlessly and in real-time. Production teams can access on-the-second order updates, and sales teams have instant views on stock prices and stock levels. They can also easily update customers on the exact stage of production of orders. Making your ERP system go mobile makes you agile, efficient and helps all employees to provide you with the powerful information you need, without impacting their core job efficiency too much.
Whether your organisation needs to manage invoicing or keep track of the status of your contracts and other obligations, a fully functioning customer relationship management (CRM) module will compile all this information. What is key here is that this is linked into your ERP system so that all sectors of the business can benefit from this powerful data. Updated sales information allows production to see which order is for which customer, while historical sales information assists the marketing team on what initiatives to design for which customer. Customer account information is critical for the parts and service departments when repairs or warranty claims are made. Without client information linking back into supplier records, production batches, and previous orders, it would be very difficult for departments to access this information. Equally the habits and preferences of your customers are helpful in planning supply and production to meet predicted demand. Your ERP system allows the CRM system to be a powerful tool for all departments across the business.
ERP systems are critical to a complex industry such as the automotive industry. Key to the success of any software project is making sure you select the correct ERP product that has the appropriate features that meet the unique needs of the automotive world. When carefully selected and properly implemented ERP systems are invaluable business partners for those in the automotive industries.