Feature Automotive supply chain


How can ERP benefit the automotive supply chain?


To stay competitive, automotive manufacturers need to manage information freely across global boundaries. And when it comes to the supply chain, they need to be able to exchange information across multiple business software systems with ease, gaining visibility into key business processes to improve decision-making and control at every level of the supply chain. Rakesh Kumar, global industry product director manufacturing industry, Microsoft Business Solutions takes a look at why manufacturers are now looking to a new generation of ‘out of the box’ Enterprise Resource Planning (ERP) solutions to create the dynamic supply chain collaboration that powers nimble and efficient operations


utomotive manufacturers aim to produce quality products at the lowest possible cost and still exceed customer expectations. Achieving this consistently and cost- effectively relies on a deep understand- ing of the supply chain, especially when it comes to managing the com- plexities of formulating and producing product to custom specifications. The business complexities for man- ufacturers are significant. Maintaining market share in the increasingly com- petitive landscape requires that orders are processed more quickly - increas- ing execution and delivery reliability rates - while giving customers better information on order status and man- aging compliance with legal and regu- latory requirements. This requires tremendous agility and a truly dynamic operating environment that’s capable of assimilating real-time infor- mation flows across supply chain touch points with ease.


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But when it comes to joining the supply chain management ‘dots’, auto- motive manufacturers face serious technical challenges in terms of process and data flows – especially when it comes to integrating the ‘spaghetti soup’ of systems controlling customer, supplier and production functions. To resolve this, manufacturers are taking a fresh look at enterprise resource planning (ERP) as a means to gaining that all important ‘single ver- sion of the truth’ and equally crucial seamless connectivity to customers and suppliers.


Background to ERP


In the past ERP has received a mixed reception. When the first commercial


Automation JUNE 2012


ERP software packages arrived in the 1990s, promising to integrate all data and related organisational processes into a unified single information system, ERP was regarded as an unwieldy, inflexible, costly and com- plex monolith unsuited to supply chain management.


But manufacturers have been miss- ing out on a critical IT opportunity, because ERP has changed. Today’s next generation ‘out of the box’ supply chain management specific ERP solutions, such as Microsoft Dynamics AX, have evolved into scalable end-to-end platforms that effec- tively streamline and automate business processes across the supply chain.


Industry specific functionalities Previously business software vendors tried to fit a single ERP solution around the needs of diverse industry verticals including vehicle manufac- ture. Often the software used did not support the appropriate terminology or the industry specific complexities in manufacturing operations. A manu- facturer of cars, for example, would


Today’s ERP


solutions are said to make ‘joined up’ streamlined supply chain management an achievable reality


extend these solutions further by pro- viding more granular requirements to help customers in specialised fields. This ensures that solutions meet the requirements of customers more easily and add significant value to the busi- ness itself.


Alongside delivering that all impor- tant data unity within the enterprise - connecting inventory, production, purchasing and sales management, for example - today’s ERP solutions utilise customisable Web services to make it


‘ERP offerings, like Microsoft Dynamics, provide a core set of industry specific functionalities that meet the requirements of the automotive industry’


have substantially different require- ments to one manufacturing semi-con- ductors. This caused significant user dissatisfaction.


Now ERP offerings, like Microsoft Dynamics, provide a core set of indus- try specific functionalities that meet the requirements of the automotive industry and developers use indepen- dent software vendors (ISVs) who can


simple to connect with suppliers, logistics providers and customers, and enable seamless real-time data exchange and process sharing. Easy to deploy and featuring easy- to-use intuitive tools that can be accessed across the manufacturing operation, from the shop floor upwards, today’s ERP solutions are said to make ‘joined up’ streamlined


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