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SAP ERP Solution: An Overview of ERP for Automotive Industry

Published: Apr 19, 2023  |   | 
SAP ERP Solution: An Overview of ERP for Automotive Industry

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 automotive industry?

What is an ERP for 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 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 automotive industry:

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

Benefits of Implementing the Best ERP for automotive industry

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.

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.

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.

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.

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.

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.

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.

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.

Reporting tools and analytics

ERPs gather a vast volume of data from different departments. Therefore, an inbuilt 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.

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

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

Reduced cost

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

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.

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.

Data security

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

Do You Know?

Adoption Rate of ERP Solutions

ERP solution gains ground swiftly in the corporate world. Here are some interesting stats that support the statement.

The ERP software market in the Asia Pacific region is expected to reach USD 26 billion by 2026

53 percent of businesses consider ERP and CRM as their priority investments

Adoption of ERP software in mid-sized businesses had grown at a CAGR of 8.27 percent from 2020

The global ERP software market is expected to reach USD 105.26 billion by 2022

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 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 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

  • Identify and define the process owners
  • Implement the ERP in different phases
  • Define the test processes and validate the outcomes
  • Train the employees and the end users
  • Launch the final version
  • Monitor the processes, capture results, and analyze them

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

Talk with our ERP Consultant and Transform your Business to Achieve Business Goals

Concluding of ERP for automotive industry

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 automotive industry? Contact Silver Touch Technologies Limited to book a consultation call today!

FAQs about ERP for automotive industry

What is the automotive industry?
The automotive industry refers to the production, development, and sale of vehicles, including cars, trucks, buses, and motorcycles. It is a global industry that involves a wide range of companies, from manufacturers and suppliers to dealers and service providers.
What Are the Benefits of ERP for Automotive Industry?
ERP software can provide several benefits to the automotive industry, including increased efficiency, improved inventory management, streamlined production processes, enhanced supply chain management, & better decision-making through real-time data analysis.
Why Is ERP Important for the Automotive Industry?
ERP is important for the automotive industry because it can help organizations streamline their business processes and operations, leading to increased efficiency, reduced costs, and improved customer satisfaction.
What Are the Challenges of Implementing ERP in the Automotive Industry?
Effective planning, communication, and training can help overcome these challenges and ensure a successful implementation of ERP in the automotive industry.

More Resources About ERP