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ERP - Automative Industry
1. 104- Ghanshyam Bheda
119- Anuj Shah
128- Aprajita Mehta
311- Lokesh Gada
327- Yuyutsu Tulshyan
ERP in Automotive Industry
2. Present Scenario
At present time, Indian automobile industry is
making a major contribution in increasing the
country's GDP by 9% every year.
New heights has been scaled by the industry in
the year 2011.
In January 2012, total automobile sales
21,14,157 units, an increment of 44.9%
compared to the sales units of same period last
year.
By 2050, the country is expected to top the
world in car volumes with approximately 611
5. Need for ERP in Automobile
Industry
1) Full Traceability : A system that enables to
accurately track individual bins, containers,
during manufacturing and distribution chain
2)Quality and Supply Chain Management:
Capability to track real-time data on
manufacturing and supply during production
6. 3) Electronic Document Management: Not only
does this save employees time, it speeds up
overall operations, reduces waste, and
minimizes room for human error
4) Inventory Optimization: excess inventory is an
unnecessary expense and contrary to the lean
manufacturing processes the enterprises are
embracing
Inventory optimization is a “must-have” ERP feature
for automotive parts manufacturers as excess
inventory is unnecessary expense
7. 5) Integrated Financials: To trace costs
associated with individual products and
product lines right down to the raw materials
used in production.
6) Built-in Barcode and OEM Shipping Labels:
Built-in support for printing, reading, encoding,
and utilizing barcode labels
8. 7) Built-in EDI (Electronic Data Interchange)
Templates
8) Tooling and Maintenance: Specifically
tracks which tools are used as well as the raw
materials used in the making of the product
how many parts are produced before
replacement or adjustment is necessary to
maintain proper quality specifications.
9. Industry Requirements
Kanban : Controlling Production and Material
Flow.
Planning/Scheduling for multiple models at
the same time in assembly line
Warranty Management
Just-in-sequence deliveries by suppliers
Managing vehicle information for vehicle
lifecycle
Managing dealer business
Car leasing
10. Different vendors provide different
kind of industry specific solutions.
Selection depends upon the
company and their requirements
12. Tata Motors
Since 1945 the largest automotive company
IT Solutions Provided by Tata Technologies
(Tata Motors subsidiary)
Huge Employee Base (30000)
Wide Scale production
One of the key businesses of the Tata Group
Very big distribution unit size
13. Why ERP?
No online real time data available?
Production Loss
Legacy systems not integrated
Inconsistent Data
Difficult interpretations
Independent planning systems
Cumbersome information flow
To scale up production and increase capacity
Backward Integration required
15. Why SAP?
30 years of working with automotive
organizations
1600 automotive companies worldwide rely on
SAP
SAP for automotive designed to help
automotive companies of virtually any size
Ready made processes for auto
manufacturers
17. What SAP covered?
Functional and Technical Consulting for
implementation of mySAP portfolio of products
SAP R/3 Implementations including Industry Specific
Solutions
BIW, CRM, SRM, APO, SCM, Enterprise Portals
Change Management
SAP Implémentation Audit
Identification of Risk Factors
Risk mitigation Planning
Solution / System Optimization
System Operations Plan
18. Project VECTOR
Value Enhancement by Collaboration through
Technology & Operational Restructuring
mySAP SRM 40 implementation
Mission: Revolutionize the supply chain by
under covering the hidden value through
technology driven Sourcing & collaborative
Purchasing
19. Phases of Implementation
Phase 1
Pilot implementation covering:
four locations for selected product categories and
four vendors each for direct and indirect materials
Was primed by SAP Consulting
Phase 2
Rollout of mySAP for Direct and Indirect Materials for
balance Product Categories and Vendors covering all
locations.
Also implement Invoice entry and Approval Modules.
Was primed by Tata Technologies Limited
20. 1997 : SAP version 3.4
First implementation was decentralized due to WAN
architecture.
4 Servers
3 manufacturing (Jamshedpur, Lucknow and Pune)
1 sales and corporate services (Mumbai)
2003 : SAP version 4.6 (Upgradation)
Single server architecture
Need to consolidate operations
3000 users
20 Modules of SAP implemented
22. SRM
Tata Motors has used the following
features
• Self Service procurement.
• Catalog and Content Management.
• Strategic Purchasing Scenario: Spend Analysis,
Contract Monitoring.
• Sourcing Scenario: Rfq
• Supplier Self Registration Module.
• Order Collaboration Scenario with full support for
Goods Movement.
• Usage of SAP Netweaver: People Integration,
Process Integration and Information Integration
24. Business Process – Supply
Strategy Development
Supply Strategy Development is
initiated by assessing the
organization’s supply needs.
Products and/or product groups are
combined into sourcing categories.
Categories are positioned according to
their business impact.
Market information, technology and
industry trends are collected along
with information about the supply
base.
Based on the analysis of this
combined information a supply
strategy is derived for each of the
souring categories.
DEFINITION
SRM COMPONENTS
• SAP Enterprise Buyer (Prof. Ed.)
• SAP Decision Support
• SAP Business Information
Warehouse
• SAP Collaborative Room
• SAP Supplier Collaboration
Services
Data
collection
www..
Strategic
analysis
Strategy
collaboration
25. Business Process – Supplier
Selection (commodity goods)
Strategic Sourcing is the process of
sourcing a strategic contact for a
material group where design
collaboration is less important.
A request for proposal is submitted
to qualified suppliers and
responses are evaluated. A contract
negotiation phase usually follows.
DEFINITION
SRM COMPONENTS
• SAP Enterprise Buyer Professional
• SAP Business Information
Warehouse
• SAP Decision Support
• SAP Dynamic Bidding
Strategic
Contract
Bid
Analysis
RFQ /
Reverse Auction
Bidding
scenario
26. Supplier Selection (commodity goods)
Create and
submit bid
Initiate
RFQ/Auction
Bid analysis
and
evaluation
Determine
Winner
Publish
RFQ/Auctio
n
SAP Dynamic Bidding
• RFQ/Reverse auction
capabilities in DB
• Initiate RFQ
SAP Dynamic Bidding
• RFQ/Reverse auction
capabilities in DB
• Bid invitation via e-mail
SAP Dynamic Bidding
• Online bidding in DB
• Attach document to bids
SAP Enterprise Buyer Pro
SAP Dynamic Bidding
• Contract Management in EB
• Integration of DB and EBP
SAP Dynamic Bidding
SAP Business Information Warehouse
SAP Decision Support
• Export of RFQ/Bid to BW
• Multi-parameter bid analysis1
27. Supplier Registration
• Supplier self-
registration
• Supplier
qualification
Design Collaboration
• New product design
• Collaborative project
management
Order Collaboration
• Account information
• Bidding event
notification
• Order management
• Invoice processing
• Dispute resolution
Supplier Connectivity
• Integration broker
• Supplier network
Collaborative
Replenishment
• Stock requirement
visibility
• Supplier managed
inventory
• Advance shipping
notification
Reduce administrative overhead for supplier
communication
Extend process control to your suppliers
Supplier Collaboration
30. Benefits
• Overall Integration of the departments – Finance,
Sales, Production etc.
• On Demand Decision making data
• Backward Demand Integration
• Reduction in inventory cost as real time info is
available
• Reduction in production bottleneck with better
scheduling
• Seamless integration across the Supply Chain
• Standardization of processes across plants at various
locations
• Reduction in manual efforts of Invoice Capture
• Reduction in Transaction Cost & Compress Cycle time
32. Hero Honda
A joint venture between Hero group and
Honda motor company in 1984
However split in 2010 year end
Discussion Scenario: May 2008
33. The Speed Breaker Ahead
In 2001 Hero Honda sold 1.3 Million bikes in a
single year creating record.
However they had over 20 million customer
base and counting across all geographies.
Handling customer complaints and after sales
service was a problem.
34. Old Process
Customer Complain Hero Honda Office
SAP entry by
personnel
Call Distributor or
service engineer
Distributor or service
engineer checks
stock
Office checks for
replacement
Goes back to
distributor or service
engineer over phone
Part delivered A Few
Days
35. Objective
The objective was to equip people with information
even when they are not in office or where they are
not able to access the internet
Since everyone carries a phone these days you can
push that information with a critical alert, to the right
person.
Vijay Sethi, CIO , Hero Honda said:
“We wanted information to be available to decision
makers when they needed it.”
36. The Solution
The solution lay in an SMS-SAP implementation that
would ensure that the requested information is
available in real-time and the problems were
eliminated.
The SMS based solution allows a Hero Honda staff to
share information with the company’s servers
irrespective of their location.
The information is flashed to the key personnel’s
mobile phone nation wide, removing their need of
logging onto the website.
It was termed as:
SMS PUSH-PULL service
37.
38. The Solution cont…
The solution was initially implemented in two plants of Hero
Honda in two phases
SMS push on December 2006
SMS pull on March 2007
Employee strength of 4000
Revenue of Rs.10089 crore
19 bike models at a cost of Rs.7 lakh.
The cost was broken down in two parts
Cost of not getting information
Cost-savings by negotiating with the service provider, to add
more value in terms of ROI.
The infrastructure cost for such was not huge. SMS charges
are based on the usage.
39. Benefits
Biggest benefit is that field staff have real time
information.
Assisting dealers to cull out any information from
the database. The planned, produced and the
actual production data is sent as SMS at the end
of the shift to all concerned people.
Another application of this is intimation across the
board to all the concerned employees in case of
any difference in actual and planned production.
A business alert is generated immediately, and
sent to the concerned employees, informing them
of the change in figures so everyone stays
updated
Customer wants to lodge a complaint or service requestGoes to Hero Honda officeEntry made In SAP system by personnelPersonnel from office would call the relevant distributor or service engineer and tell them about the defect.The distributor or engineer then checks his stock and revert back to the office.The office then checks for replacement stock and then go back to the distributor or customer over phoneFinally the desired part was sent to the customer.The whole process took a few days.