A Study of Commercial Aspects of warehouse Management System of

ERP in Automobile Sector in Maharashtra

A Ph.D Sysnopsis
Submitted To

Dr. Babasaheb Ambedkar Marathwada University,

Aurangabad.
For the Registration of the Degree of
Doctor of Philosophy
In
Management Science
Under The Faculty of Management Science
By
Mr. Mudassar Khan Durrani
Research student
Under the Guidance
of
Dr. Mohammed A. Raffey
Assistant Professor
U.G.C Academic Staff College
Dr. Babasaheb Ambedkar Marathwada University,
Aurangabad.
January - 2015

"A STUDY OF COMMERCIAL ASPECTS OF WAREHOUSE

MANAGEMENT SYSTEM OF ERP IN AUTOMOBILE SECTOR
IN MAHARASHTRA
___________________________________________________________
1. Introduction:A warehouse is a commercial building for storage of goods.
Warehouses are for manufacturers, importers, exporters, wholesalers,
transport business, customs, etc. They are usually large plain buildings in
industrial areas of cities and towns and villages. They usually
have loading docks to load and unload goods from trucks. Sometimes
warehouses are designed for the loading and unloading of goods directly
from railways, airports or seaports. They have cranes and forklifts for
moving goods, which are usually placed on ISO standard pallets loaded
into pallet racks. Stored goods can include any raw materials, packing
materials, spare parts, components, or finished goods associated with
agriculture, manufacturing and production
We need different types of goods in our day-to-day life. We may
buy some of these items in bulk and store them in our house. Similarly,
businessmen also need a variety of goods for their use. Some of them
may not be available all the time. But, they need those items throughout
the year without any break. Take the example of a sugar factory. It needs
sugarcane as raw material for production of sugar. Sugarcane is produced
during a particular period of the year. Since sugar production takes place
throughout the year, there is a need to supply sugarcane continuously. But
how is it possible? Here storage of sugarcane in sufficient quantity is
required. Again, after production of sugar it requires some time for sale or
distribution. Thus, the need for storage arises both for raw material as
well as finished products. Storage involves proper arrangement for
preserving goods from the time of their production or purchase till the
actual use. When this storage is done on a large scale and in a specified

manner it is called warehousing. The place where goods are kept is

called warehouse. The person in-charge of warehouse is called
warehouse-keeper. Warehousing refers to the activities involving
storage of goods on a large-scale in a systematic and orderly manner and
making them available conveniently when needed. In other words,
warehousing means holding or preserving goods in huge quantities from
the time of their purchase or production till their actual use or sale.
Warehousing is one of the important auxiliaries to trade. It creates time
utility by bridging the time gap between production and consumption of
goods. The effective and efficient management of any organization
requires that all its constituent elements operate effectively and efficiently
as individual SBUs / facilities and together as an integrated whole
corporate. Across the supply chains, warehousing is an important element
of activity in the
2. Need for Warehousing:Warehousing is necessary due to the following reasons.
Seasonal Production
You know that agricultural commodities are harvested during
certain seasons, but their consumption or use takes place throughout the
year. Therefore, there is a need for proper storage or warehousing for
these commodities, from where they can be supplied as and when
required.
Seasonal Demand
There are certain goods, which are demanded seasonally, like
woolen garments in winters or umbrellas in the rainy season. The
production of these goods takes place throughout the year to meet the
seasonal demand. So there is a need to store these goods in a warehouse
to make them available at the time of need.

Large-scale Production
In case of manufactured goods, now-a-days production takes place
to meet the existing as well as future demand of the products.
Manufacturers also produce goods in huge quantity to enjoy the benefits
of large-scale production, which is more economical. So the finished
products, which are produced on a large scale, need to be stored properly
till they are cleared by sales.
Quick Supply
Both industrial as well as agricultural goods are produced at some
specific places but consumed throughout the country. Therefore, it is
essential to stock these goods near the place of consumption, so that
without making any delay these goods are made available to the
consumers at the time of their need.
Continuous Production
Continuous production of goods in factories requires adequate
supply of raw materials. So there is a need to keep sufficient quantity of
stock of raw material in the warehouse to ensure continuous production.
Price Stabilization
To maintain a reasonable level of the price of the goods in the
market there is a need to keep sufficient stock in the warehouses. Scarcity
in supply of goods may increase their price in the market. Again, excess
production and supply may also lead to fall in prices of the product. By
maintaining a balance of supply of goods, warehousing leads to price
stabilization.
Enterprise resource planning (ERP):
Is business management software usually a suite of integrated
applications that a company can use to collect, store, manage and
interpret data from many business activities, including Product planning,

cost, Manufacturing or service delivery, Marketing and sales, Inventory

management, Shipping and payment, etc. ERP provides an integrated
view of core business processes, often in real-time, using common
databases maintained by a database management system. ERP systems
track business resources cash, raw materials, production capacity and the
status of business commitments: orders, purchase orders, and payroll. The
applications that make up the system share data across the various
departments (manufacturing, purchasing, sales, accounting, etc.) that
provide the data. ERP facilitates information flow between all business
functions, and manages connections to outside stakeholders. Enterprise
system software is a multi-billion dollar industry that produces
components that support a variety of business functions. IT investments
have become the largest category of capital expenditure in United Statesbased businesses over the past decade. Though early ERP systems
focused on large enterprises, smaller enterprises increasingly use ERP
systems.
The ERP system is considered a vital organizational tool because it
integrates varied organizational systems and facilitates error-free
transactions and production. However, ERP system development is
different from traditional systems development. ERP systems run on a
variety of computer hardware and network configurations, typically using
database as an information repository. The characteristics and application
areas of Enterprise Resource planning Systems are as follows
3. The Characteristics of Enterprise Resource Planning:Select the right software
It may seem obvious but it doesnt always happen. ERP software
vendors are typically bullish when it comes to the capabilities of the
software theyre selling. You need to put them through a rigorous and

structured selection process to find out which system suits your business
best.
Select the right implementation partner
Just as important as selecting the right software is selecting the
right implementation partner. This is the company youre relying on for
their expertise and experience in implementing and getting the best out of
the software that youve bought. Who can afford a team of consultants
who dont know what theyre doing or are only learning about the system
at your expense?
Plan the project carefully
Make sure your timelines are realistic and that youre clear on
whats going to be done and whos going to do it. Basic stuff, but its
always well worth putting the effort into planning before the project
starts.
Be clear on the project scope and stick to it
Scope creep is a major risk in most projects. Its potentially a
killer as it eats into resources (both people and money), can have a
complicating effect on other elements of the project, and can even delay
the project.
Focus on the expected benefits
How do we define a successful implementation? We believe that
success cant just be measured by the usual criteria of on-time and onbudget. The real success of the project lies in achieving the expected
business benefits. Business benefits realization should be integral to
every part of the project.
Select the best possible implementation team
Underestimating whats required from the internal project team is a
common problem. Their skills, experience and effort are crucial to a
successful project. Free up your best people for the project and accept

that their ability to do their usual jobs is going to be very limited or nil for
the duration of the project. This can be costly and may involve backfilling
to release people. The people you need on your project team are probably
those you can least afford to lose, but remember that the time your team
will spend working on the project will be a multiple of the time required
from the ERP vendor and will shape the operation of your business for
years to come.
Ensure theres commitment from the top
If your organization senses that senior management arent 100%
behind the project then why should they care about it? The project needs
to seen to be driven from the top down. Conflicts between the project and
the day-to-day running of the business will arise: such issues need to be
managed carefully.
Ensure theres adequate end user training
After putting huge effort into designing and configuring the system
its easy to think all the hard work has been done. But the system doesnt
run by itself: the users need to be trained on how to use the system
properly. You may even have users whove never used an ERP system
before. Skimp on training at your peril, especially for remote or mobile
users.
Dont forget about reports
Think about your current systems and the reports that you use to
run your business now. How long has it taken to develop all the various
reports that you use now and will the new system deliver all the reports
you need out of the box? Probably not is the usual answer, so think
about what reports you will need to operate from Day
Manage change effectively
One absolute certainty is the introduction of the new system means
things will change. Business processes and procedures will change.

Job/role definitions will have to be updated (some roles may cease to

exist). Users may be fearful of what the changes mean for them. If you
proactively manage change youve a much better chance of a trouble-free
cutover.
Application areas of Enterprise Resource planning Systems
Accounting/Finance, Human Resources, i.e. employee information
management, Manufacturing, Customer Relationship Management
(CRM), i.e. sales, customer service, Project Management, Product
Development, Data Warehouse, Purchasing, Supply Chain Management,
Inventory Management, etc.
4. Functional Areas of Warehouse in ERP System:Enterprise resource planning ERP is a description of systems that
employ innovative information technology to manage all sorts of areas in
companies. Major corporations, in particular, could hardly function
without tailor-made ERP software. One component of ERP can be a
warehouse management system (WMS). With its assistance, precise
warehouse management can be Conducted even in the most complex
storage and distribution systems. As a result, inventory monitoring can be
improved and the entire supply chain can be designed more efficiently.
One elementary factor in optimizing a companys important core
business processes is the fast and precise retrieval, integration and
collection of information. Enterprise resource planning ERP is a system
that uses modern information technology to manage the functions of
various company divisions and to create transparency in the process.
Through the use of ERP - and, as a Result, a single data model for all
company-relevant information significant amounts of internal
integration can be achieved. This is an important benefit especially for
international companies. But small and mid-sized companies can profit

from tailor-made ERP solutions as well. For the entire supply chain, an
ERP system with a shared data model is a desirable solution - but the
implementation of it is extremely complex. The trend toward outsourcing
is also raising the systems cost because the number of companies in the
supply chain continues to expand.
Advanced planning systems (APS) represent an extension of the
ERP in terms of relationships with other companies. These systems
represent complex logistics structures and processes in a supply chain,
and facilitate fast responses and optimal inventories and capacities. For
this purpose, APS uses data managed by ERP systems. In the automotive
industry, for instance, the supply chain can be mapped all the way to the
pre-suppliers of a system supplier. As a result, critical paths can be
recognized and supply squeezes prevented at an early point in time. The
essential business processes in a company can be almost completely
covered by new ERP systems, and the execution of these processes can be
supported in real time. Different business sectors can sometimes place
widely different demands on an ERP system. In response to these needs,
major providers like SAP, Oracle and Microsoft offer solutions specially
tailored to individual sectors. Such special solutions already are in place
for aerospace &defense, the automotive industry, banks, the chemical
industry; logistics service providers, telecommunication, insurance firms
and universities, among other areas. This graphic shows the functions of
an ERP solution provided by SAP.
Efficient storage administration through Warehouse management systems
Warehouse management systems (WMS) represent a further
evolutionary step from the inventory management systems (IMS) used in
the 1980s and early 1990s. The traditional IMS only enabled stored items
and storage positions to be administered and conveying systems to be
managed. But todays WMS can do much more. Among other things, they

permit numerous important indicators to be monitored and develop

multifaceted strategies for optimizing the systems in use from these
indicators. As a result, complex storage and distribution systems can be
easily managed, monitored and optimized. A traditional IMS was
generally used as a black-box system that was separated from the
central company software. In contrast, the WMS began to be increasingly
networked and integrated into the ERP at the end of the 1990s. As
modular software, the WMS offers a scalable functional range within the
framework of the ERP: The core functions of a WMS support the basic
processes in every Companys warehouse area: e.g., receiving, storage,
warehouse management, picking, retrieval, shipping, inventory and forms
management. The expanded functions of a WMS include batch/serial
number management, management of empty bottles and returns.
Additional modules offer connections to self-contained software
packages like RFID software or pick-by-voice /pick-by-light systems.
One other important function is support that is provided to the
management of linked storage facilities. As a result, the inventories of
several warehouses can be balanced with one another or particularly highquality items can be distributed only upon notification from centrally
located warehouses. Similar to the concept of the ERP, function-adding
modules are installed only if the company actually needs the particular
service.
Types of Warehouse Management Systems (WMS)
Because there are so many different types of warehouses and the
definition of warehouse operations is different for every warehouse, there
are many types of warehouse management systems (WMS). Trying to
determine which WMS is best for which warehouse can be a daunting
and expensive task, even for the best warehouse operations
specialists. Let's break down warehouse management systems into the

different types of software modules available on the market today. By

looking at the types of software packages available, we might find a clue
as to which system is best for which warehouse. The three basic types of
warehouse management software are as follows: package or commercial
off-the-shelf (COTS), Hosted systems and Proprietary systems.
A package, otherwise known as a commercial off-the-shelf
solution, is a warehouse management template that can be easily
configured to work against a variety of database systems depending upon
the infrastructure of the firm implementing the solution. Most
warehousing functionality has been included such as asset tracking and
definition, material-handling supervision, scheduling modules for trips
and docks, stockyard management, shelf life supervision and much more.
Once a package has been selected, consultants typically schedule
workshops to flush out functional requirements and specifications, which
then convert to configuration requirements for ultimate implementation
and migration from your current system to the new system. As with any
software implementation, if the requirements are well-defined at the
inception of the project, using a COTS system can go very smoothly.
Drawbacks with packaged solutions are generally related to performance
with the occasional problem of desired functionality not being available.
Hosted WMS solutions are relatively new to the scene. These use
the Internet for access to WMS software. Organizations no longer need to
purchase software to operate their warehouses. The core software for a
hosted WMS is owned and operated by the hosting company. All the
functionality required to run your warehouse is available through your
browser. Typically, these solutions are best for smaller warehouse
operations, but new functionality is being added every day.
Proprietary systems are really the benchmark by which many of
today's packages and hosted systems are measured. Aberdeen recently

reported that nearly 60% of all warehouse management software is still

proprietary in nature. Apparently custom software providing the specific
functionality, responsiveness and flexibility required, is still a viable
solution for many organizations. One drawback to proprietary systems,
however, is the high cost of ownership relating to custom service and
maintenance. In general, the resource expertise required to maintain a
custom software package comes with a high training price tag. Yet, when
cost is sufficiently reduced, and accuracy and productivity is increased,
proprietary systems can be quite attractive as they have been for
companies like Wal-Mart.
The commercial Role of Warehouse Management System of
Enterprise Resource Planning in Automobile Industry. According to
industry reports every year, India manufactures more than 11 million
automobiles and commercial vehicles making it the seventh largest
automobile manufacturer in the world and fourth largest exporter in Asia.
75% of the vehicles produced are two wheelers and about 16% of them
are passenger cars. At present, it is a 35 billion dollar industry providing
employment to about 13 million people.
The market demand for automobile industry is determined by
affordability, infrastructure, product innovation and fuel price. With stiff
competition growing every day and with changing market needs, key
players are forced to bring out innovative features, reduce infrastructure
costs and produce automobiles that have advanced designs at affordable
prices. In the whole process, there are some key challenges that are faced
by the automotive industry, as mentioned below.
High maintenance cost of production facilities, Vendor management,
Inventory management, Issues related to labor and land, maintaining
efficiency in global product delivery, Reduction in environmental impact
of materials used etc.

ERP systems have the required capabilities to streamline processes

and overcome majority of the challenges mentioned above. This is one of
the major reasons why many players in the industry are implementing
ERP solutions. For example, Ramco on Demand ERP helps automotive
industries track, analyze, control materials, machine, labor and cost. It
also enables seamless integration of inventory, purchase, sub-contracts
and accounts. Other features include,
Managing bill of materials, Process streamlining, Shop floor
management, Production forecasting, Order management, Production
analysis, Accurate analysis of rejection, rework etc.
These features enable automotive manufacturers to efficiently plan,
schedule and execute their production process in plants that are located
across different places.
Following terms are to be considered while studying above subject.
Speed: Speed is defined as the time taken to implement the ERP system
in an organization. While designing ERP, the time taken by the
organization to implement ERP must be taken into account.
Scope: ERP should consider and include all the functional and technical
characteristics required by the organization.
Resources: Resources are everything that is needed to support the project.
This includes people, hardware, systems, software, technical support etc.
All these resources must be taken into account.
Risk: Risk is defined as the factors that resist the overall success of ERP
implementation. Therefore, all the risks that will arise must be taken into
account while developing ERP.
Complexity: Complexity is the degree of difficulty anticipated during
implementation, operation and maintaining the ERP systems. Care must
be taken to minimize the complexity while designing ERP.

Benefits: Benefits are the extent to which the company uses the functions
of the ERP software. To get the maximum benefit from ERP, care must be
taken to design the ERP by following the procedures followed by the
organization.
5. Role of ERP in Automobile Sector:
The business processes of the automotive and automotive supply
industry make big demands on all those in the supply chain. The highest
priority in this industry sector is ensuring that delivery deadlines are met.
Scheduling and logistics procedures are challenged daily. Furthermore,
efficiency, costing, cost management and data transparency play a huge
role in remaining competitive. ERP Business Software has reliably
supported the demanding tasks of its users in the automotive and
automotive supply industry for many years. All relevant and standard
processes are clearly and efficiently displayed - for example, the typical
industry sector demands such as administration of blanket orders, forecast
delivery schedules, JIT delivery schedules and also controlling
cumulative quantities, storage means and returnable packaging
management or management of lot and serial numbers. The online
integration of the standardized EDI processes according to VDA, Odette,
Edifact and ANSI X12 automates processes, minimizes manual effort and
eliminates sources of error. ERP delivers on these critical requirements.
Product cycles are becoming continually shorter. Continually changing
logistics or process concepts demand a high level of flexibility from the
supporting ERP system. The ERP Business Software ensures that these
requirements are realized quickly and with relatively little effort. Besides
a broad spectrum of process and industry sector knowledge, as well as
software implementation expertise, one of the basic tasks of ERP is to
have constant communication with customers and active cooperation in

associations such as the ITA. This is how trends and changes are
recognized early on and quickly realized. Through this, ERP helps ERP
users with their competitiveness in their demanding market segments.
Significance of Study
This study will be significantly important in view of productivity,
working system, employee satisfaction, Inventory management,
production cost reduction, waste management, etc.
Objectives of Study
To study the role of ERP system in Automobile industry.
To study the effect of Warehouse Management System module of
ERP in Automobile Industry.
To study the cost effective solution of Warehouse Management in
Automobile Industry.
To study the role of warehouse management module of ERP on
working of employees of automobile industries
To study the impact of ERP on the productivity of Auto cluster
industries
Research Methodology:To achieve the above objectives, the employees working in automobile
industries in Maharashtra area are to be selected. Looking at the nature of
the topic and its scope, the methodology of study has to combine the
library research and the fieldwork. The library research was aimed at
survey of literature, compilation of secondary sources of information and
cutting out the theoretical information that could help in building up to
conceptual foundation of the subject. Survey can be done from selected
respondents on the basis of convenient random sampling. The response

will be collected through the structured questionnaire as well as through

personal interview. Primary and Secondary sources will be used for
collecting the information on the research topic.
Primary Data
The Primary source will mainly be confined to interviews of the
automobile industry employees.
Secondary Data
Under the secondary sources, various libraries and selected industrial
units will be visited for collecting the information from the books, Annual
reports and office records. Experience survey method will be used for
detail research. The available fact and data will be analyzed by
percentage ration.
Hypothesis of the Study
ERP has vital role in management of data and other warehouses.
ERPs module of warehouse management system particularly in
Automobile industry is a complex problem to implement.
Different commercial aspect of implementing ERP for warehouse
management in Automobile industry is necessary.
Geographical Area for study:The present study covers the regions of Maharashtra State. However, at
some levels the coverage of the study, if necessary would be extended up
to other States or even up to country level so as to highlight the related
aspects of the subject.

Reference period for study:-

The reference period, while collecting the secondary data is not restricted
to particular number of years, since it is found necessary to seek the
references even prior to independence when the industrial units start by
rural entrepreneurs. The detailed study covers the period from the year
2005 to onwards.
Table 1: Status Table (Source: Web Reference)
Sr.N
o
1
2
3
4

Zone
Aurangabad

Name Of Company

No. of

Skoda
Mercedes-Benz India
Gabriel India
Tata Autocomp System

Employees
200
200
200
200

Pune

Ltd.
5
Tata Motors
200
6
Mahindra&Mahindra
200
7
Bajaj Tempo
200
8
Eicher
200
9
Ford India
200
Mumbai
10
Mahindra&Mahindra
200
Note: Table contents are taken from different sources of Internet
25% sample is proposed from100% companies
Total sample size: 500 samples
Table 2: Sample Table
Sr.N
o
1
2
3
4
5
6
7
8
9

Zone

Name Of Company

No. of Samples

Aurangabad

Skoda
Mercedes-Benz India
Gabriel India
Tata Autocomp System

50
50
50
50

Pune

Ltd.
Tata Motors
Mahindra&Mahindra
Bajaj Tempo
Eicher
Ford India

50
50
50
50
50

Mumbai

10

Mahindra&Mahindra

50

Chapter Scheme:
1
2
3
4

Introduction
Review of literature
Automobile Industries of India
Warehouse Management System of Enterprise Resource Planning

in Automobile Industry
Performance evaluation of Warehouse Module of Enterprise

Resource Management in Automobile sector

Summary, Suggestion & Conclusion

References.
- Prashant R.Nair, Venkitaswamy Raju, Anbudaya shankar S P,
Overview of Information Technology tools for Supply Chain
Management
- Bartholdi III JJ, Hackman ST (2006), Warehouse and distribution
science.
- Ramaa. A, K. N. Subramanya , T. M. Rangaswamy, Impact of
Warehouse Management System in a Supply Chain, published in
International Journal of Computer Applications, IJCA Journal
Volume 54 - Number 1 Year of Publication: 2012
- Dave Piasecki, Warehouse Management Systems (WMS)
- Wen-Hsien Tsai, Study of the Impact of Business Process on the
ERP System Effectiveness
- Ravi Seethamrajua, , Diatha Krishna Sundarb, Influence of ERP
systems on business process agility
- R. Addo-Tenkorang and P. Helo , Enterprise Resource Planning
(ERP) :A Review Literature Report
- Zahra Barzegar and Leila Nohekhan, Studying components of
enterprise resource planning and ranking their importance
Web References
- http://www.skoda-auto.co.in
- http://www.mercedes-benz.co.in/
- http://www.gabrielindia.com/
- http://www.tacogroup.com/
- http://www.tatamotors.com/
- http://www.mahindra.com/Contact
- http://www.bajajauto.com/
- http://www.eicher.in/
- http://www.india.ford.com/
Research Student
(Mudassar Khan Durrani)

Research Guide
(Dr. Mohammed A. Raffey)