ERP in the Auto Industry

We have all heard the stories about the auto industry over the last 5 years. The decline in auto sales greatly depressed ERP aspirations of automotive. But things change. At Ultra Consultants we are seeing an increase in auto industry interest in ERP solutions. The Tier I, II, and III auto suppliers are beginning to look at modern ERP solutions to help improve business processes.

Good News for Auto Suppliers

The good news for these companies is that ERP has matured considerably in the last few years. Modern ERP systems now include much more than “ERP”. These modern enterprise systems now address many important business processes for auto industry suppliers such as:

• Bid Management – manage the bid process and the evolution of new parts for new models and in-model revisions
• Product Lifecycle Management – track and manage product innovation and product change
• Quality Management – control management of the auto industry quality standards – APQP/PPAP
• Support for TPS Principles – tools for the implementation of lean manufacturing concepts: value stream mapping, Kanban, Heijunka
• Demand Planning – manage demand plan and demand forecast from a multiple market sources for a complex product hierarchy
• Production Planning – visualization of demand versus capacity down to the machine and tool
• OEM Certification – ERP vendors have gotten many of their customers through the OEM certification process
• EDI– all of the EDI sets required in the auto industry
• Labeling – existing templates for labels require by OEMs
• Preventive Maintenance – manage the scheduling of machine maintenance integrated with production schedule

The footprint of these systems continues to expand every year.

ERP Vendors Suitable for the Automotive Industry

The group of vendors that serve the auto industry has become clearer for the buyers. Auto suppliers want to be certified by the OEM’s. Therefore to sell in the auto industry, ERP vendors must add capability to their products to facilitate certification with the vendor.

In a recent ERP selection for a Tier I supplier in the auto industry, we asked the vendors two key questions to qualify the vendor:

1. What percent of your customer base is automotive Tier I or II suppliers?
2. How many of your customers systems have been certified by a major OEM?

There are a number of choices. The vendors we felt that had focus and capability for the above function for mid market auto industry Tier I and II suppliers were:

• SAP
• Oracle
• Microsoft
• Infor
• Epicor
• IFS
• Plex
• QAD
• Glovia
• Solarsoft

There are a lot of choices. Their solutions address auto industry, but their technology platforms and cost of ownership vary.

The auto industry in America is back. The surviving auto suppliers are seeing increased demand. These companies now want to improve their productivity. Many are turning to ERP vendors to supply the systems needed to improve their productivity.