Navigating the Road Ahead: ERP for Automotive Industry Challenges

Posted by SAP Silvertouch on April 21st, 2023

SAP Business One is The global automotive industry is experiencing a boost as new technologies like e-vehicles and self-driven cars continue to lead the way. But let's face it- the competition is also rising. Moreover, the industry is still vulnerable to global headwinds like the energy crisis, rising gas prices and more. 

Now is the right time to adopt an ERP solution for the automotive industry and prepare your automotive business for the future. But what is an ERP for the automotive industry?

What is an ERP for the automotive industry, and how does it help companies? 

ERP stands for Enterprise Resource Planning. These are comprehensive software solutions that come with in-built tools that help organizations automate repetitive tasks, ensure data security and increase overall efficiency across all departments.

An ERP for the automotive industry is a similar software solution that helps the company achieve its goals through heightened technological solutions. ERP solutions for the automotive sector come with modern capabilities that help companies with inventory management, customer relationship management, accounting processes, and compliance. 

Benefits of Implementing the Best ERP for the automotive industry:

If you are having second thoughts on an ERP solution for the automotive industry, then here are seven benefits to change your mind.

1. Smart and smooth collaboration:

   An ERP brings the entire organization under one platform. Previously where departments were siloed, now they could effectively communicate and collaborate. 

2. Increases access to real-time data:

   Intelligent cloud-based ERP software solutions give access to real-time data that enables managers to take quick action. Up-to-date information helps the automotive industry stay on top of resource availability, customer information, employee management, manufacturing status, and so on.

3. Process automation:

   The ERP software solution will automate several tiresome business processes, such as manual data entry. Process automation also eliminates errors and stores accurate and up-to-date information. 

4. Enhanced regulatory compliance:

   Automotive businesses must comply with several regulations, especially safety and pollution norms. Implementing an ERP solution with regulatory and compliance capabilities that makes life simple. The software also allows you to adhere to the standards and monitor deviations. You can also whip up the requisite reports for submission to the regulatory authorities.

5. Better inventory management:

   ERP systems can improve inventory and production processes. You can avoid the problems of excess or inadequate inventory, delay in shipments, and holding costs using the best ERP software for the automotive industry. They help create leaner operations, synchronized delivery of raw materials, and accurate data on inventory. 

Different Components of Automotive ERPs & Their Impact on Your Business

Most ERP software for the automotive industry can be customized to fit unique organizational needs. However, there are five non-negotiable components that should be present in the software solution when you deploy it. 

1. Product management:

   Automotive companies need an ERP empowered with product management functionalities. The tool will help you with product lifecycle management, product scheduling, product quality management and performance tracking. Each of these functions improves manufacturing and product management operations.

2. Customer relationship management:

   A report by KPMG says that by 2030 a large population will purchase cars online. It can pose a significant challenge to automotive dealers and sellers. An integrated customer relationship management tool will allow the sales team quick access to correct customer data, real-time communication and more. CRM capabilities can also be used to identify the best sales channels, predict trends, and optimize marketing.

3. Service scheduling tracker

    As an automotive company, the operations do not end with selling a vehicle. Rather it unleashes a series of follow-ups and maintenance services. A service scheduling tracker will give you access to a comprehensive customer database and insight into the post-sales services. 

4. Reporting tools and analytics:

   ERPs gather a vast volume of data from different departments. Therefore, an in-built analytics module may help generate data-based insights to optimize the above aspects, improving operational efficiency. It can also help you identify the most-effective dealers and sales channels. 

5. Integrated HRM and Accounting tools:

   The ERP must contain accounting and human resource management tools since these are the building blocks of an organization. Automotive ERP with built-in HRM functionality can identify skill gaps and help the company hire the right talent. Similarly, the accounting tool will help manage the funds, debtors, and creditors and correctly analyze the company's asset-liability situations. 

How Can Automotive ERP Solutions Help Businesses with Cost Reduction & Efficiency 

1. Reduced cost:

   Although an ERP for the automotive industry is expensive, its benefits pay for itself. Scattered processes often lead to losses. The ERP brings all operations under one single interface and reduces the cost of maintaining several systems. 

2. Higher ROI:

   An ERP will also lead to higher ROI along with reducing costs. Since the operations are streamlined and the communication between departments gives greater visibility of business processes, increases the efficiency of business activities, and improves customer satisfaction.

3. Enhanced productivity:

   As the employees no longer engage in tiresome work, they can focus on value-generating activities. Better integration, communication and saved time improve their productivity. 

4. Data security:

   Data breaches can cost your automotive business dearly. Your systems can contain valuable customer information, insight, and confidential data. An ERP for the automotive industry improves the data security of your system and prevents data theft. 

Implementation of ERP solutions for the automotive industry:

Implementing an ERP solution for the automotive industry is a disruptive process, internally and externally. It affects all operations. Therefore, it is important to have a defined step-by-step process that can reduce disrupting workflows.

Identify stakeholders

First, identify who will be affected by the ERP implementation. The best ERP for the automotive industry should come with all the required functionalities mentioned above. Once you plan to implement a comprehensive ERP software solution, you will impact all departments.

Define a change management process

Implementing ERP can and will trigger employees at different professional levels. Before the implementation, design and define the change management process. It should include training procedures, test runs, and final deployment.

Select the right vendor

Finding the perfect vendor who can offer the best ERP software for the automotive industry is crucial at this stage. When choosing the ERP vendor, remember to check their technical expertise and post-sale support services. 

Start the journey:

Implementing an ERP for the automotive industry is like a marathon. You have to be slow and steady. Here are six steps to follow once you have hired an ERP vendor:

1. Identify and define the process owners 

2. Implement the ERP in different phases

3. Define the test processes and validate the outcomes

4. Train the employees and the end users

5. Launch the final version.

6. Monitor the processes, capture results and analyze them.

Implementing an ERP for the automotive industry requires technical skills and a deep understanding of the industrial requirements. 

Conclusion

Deciding whether to deploy an ERP for the automotive business or how to get started can be a daunting task. To simplify it and break down the process, you need expert SAP ERP guidance. That's where we come into play. 

Want to know more about how your automotive business can benefit from an SAP ERP for the automotive industry? Contact Silver Touch Technologies Limited to book a consultation call today!