ERP on AUTOMOTIVE INDUSTRY

ANUJ SHAH MBA Tech (IT) R.NO 119

Introduction:
With an enormous database of almost 2TB of business-critical data in the environment, upgrading the SAP applications presented a major challenge. There were also around 2,750 in-house developments based on SAP ABAP that had to be adjusted to ERP and Unicode. Finally, the project could not be allowed to interrupt or damage business operations VW FS chose to work with IBM Global Business Services as its trusted partner to plan every step of the project, starting with a pilot study in 2005.In order to globally revolutionize its processes of engineering, manufacturing and after sales, Volkswagen Group should consider ERP for automotive portfolio of solutions. An ERP solution together with system used in the company for electronic billing of material can help and support company for achieving considerable saving from cost from operations of engineering and production. A seamless integration can be achieved by an ERP solution by integrating different processes of production, logistics and financials. This integration will result in enhanced, efficient, effective and most importantly transparent operations of motor assembly. Furthermore, an important aspect of ERP is Customer relationship management. Volkswagen Group can benefit a lot from it by streamlining the fulfilment of spare parts and their collaboration throughout its dealership network in Europe. ERP also offers functionalities that are suited best for The VW Group and will help it achieve their goal of efficiency enhancements. This enhancement can be achieved by globally standardizing all the processes in their operations. As per the need of The VW Group, ERP will provide them with a system giving uniform and consistent material bills so that the workflows involved in production and engineering are streamlined. ERP will allow The VW Group to tailor a system that is comprehensive and will always be working without any glitch. Vendor: IBM Global Business Services IBM Business Partner: SAP Solution: SAP ERP 6.0 Within just 11 months, replacing the older systems with an integrated suite of SAP ERP applications. During the release weekend, staff worked 24x7 to ensure timely completion, and we even managed to begin final tests a few hours early, says Stephan Woffleben

Features
Service delivery to end-user: These services will make sure that the critical data, analytical tools and applications are readily available and accessible to the employees so that they can perform their job tasks effectively and efficiently and shall also support organizations model for different processes of shared services. Different portals for employees and managers can be maintained and will offer them role based access. Furthermore, services can be provided to the employees on field like the sales representative of The VW Group to report offline the critical information. Business Performance: In order to predict the business performance through compliance so that deep insight of the business financials across the organization and will tighten the control of finance. The financial supply chain management, management and financial accounting of The VW Group can be automated by ERP as it rigorously supports the corporate governance mandates like Sarbene-Oxly etc. Human Resource Management: The processes of Human Resource can be optimized with help of solution which is completely integrated with the global human resource management. Every efficient ERP solution takes in to consideration this very aspect with great consideration. And hence maps to the value system of the Group. The potential of the workforce can be maximized but supporting flexibility, growth and innovation. ERP solution can provide and hence can increase the compliance in order to pace up with the regulations around the globe. Business Cycle: Complete end to end cycle of business processes for procurement and logistics can be managed with the ERP module available for care business operations. These processes may range from generating self-service request to simple payments and invoices. Furthermore, in context of The VW Group, the entire life cycle processes of product manufacturing and development in real time can be effectively managed by delivering high quality products hence increasing customer satisfaction. Performance Management: Another important feature of ERP is that it provides the support for the complete performance management lifecycle. It delivers measurements and metrics personalized for the improvements in business insight and decision making. ERP provides analysis tools for finance, operations and human resource and in addition to this it also supports combined reporting of financials and statutory; risk management, planning, and forecasting, scorecards and strategy management, and budgeting.

Benefits of Implementing ERP

Reduce Time-To-Market Cycle Of New Product In the early processes of product development, collaborative environment is required to bring on platform all the key stakeholders so that the time to market cycle of designing and development of innovative products is reduced and shall produce the cars more in accordance with the customers need and demand. Thus the key barriers for The VW Group in order to achieve an effective and efficient value chain are performance goals, consumer preferences, and alternatives for possible cost savings which does not allow the easy incorporation of value chain in the overall design. It is required that all the information should become transparent so that each stakeholder can have transparent view of the processes. SOLUTION The solution to this issue is also provided by ERP itself. ERP allows collaborative work environment so that idea and suggestion can be shared and exchanged. This is achieved with help of ERP by using its collaborative project management aspect and by enabling this solution to be web-based i.e. people can work online in a virtual workplace hence globally scattered team members can work together and can get issues resolved. Therefore, the activity control of the product lifecycle execution can be effectively done. Challenge: Higher Outputs, Lower Stocks and Reduction in Waste Solution The VW Group is well known for adopting lean approaches for manufacturing so that significant improvements can be achieved in services like operational customer related. Unfortunately agile manufacturing is not supported by most of the ERP systems and hence companies are forced to develop processes in their operations, extensive workarounds or may disable significantly their manufacturing portions of applications to control agile manufacturing effectively. SOLUTION It is important to choose an ERP solution that will help The VW Group to identify blockages in the line of production and may help simulate the assembly line on the demand of different models. It should further provide The VW Group with make-to-stock, assemble-to-order, engineer-to- order, or other similar environment and all these environment offering should be independent of functionality sacrifices that are necessary for methods of manufacturing. It is important for The VW Group support an environment with dynamic flow however should also maintain control over its operations.

Challenge: Globalization and Competition Since the numbers of automobile vendors are limited, therefore there exists a furious competition among them. As we know that missed deliveries are a challenge that VW may face and it could cost them hearty and vehicle production may face serious disruption hence for every minute production is down due to missing parts a loss of thousands of dollars will be faced by the company. Therefore, it is important for The VW Group that they should focus on the practices like lean manufacturing and just in time. These practices will force suppliers to stick to their schedule of delivery till the order of customer is fully complied only with hours and minutes instead of days. SOLUTION The solution for The VW Group of this challenge is that again selection of solution should be such supports cross organizational functions and activities that provides process flow which are completely integrated with each other which may range from taking order till the release of cash. The business process that can ideally execute this release to cash tasks will have to optimize process between operational and financial departments of an organization. These processes will include release management, order management, warehouse management, and accounts receivables.

Conclusion:
In order to meet its customers need The VW Group and other vendors in automobile industry have to position themselves uniquely so as to improve their ability to better understand and meet the customers need and to remain profitable by having competitive edge in the market. Furthermore, although majority of the companies in this industry are following back to basic approach, the VW Group needs to focus on a strategy that will incorporate emerging technologies and will lead it towards the core competency improvements. This emerging technology should come from strategic solution like an ERP. ERP will help the VW Group understand their issues and can provide it with best solution it can go with. Such solution will be specifically designed for the VW Group. As matter of fact, ERP will help the VW Group and its dealerships around the globe to transform their process in business ranging from designing to production and all other important aspects of business so that a big strategic objective can be met.