Final ERP - Presentation

ERP in Automobile Industry

Group 4Mantri AnkitNayeem T GPaul George

Rahul MashruKhushboo GargMaria Varghese

Nancy NathanPoornima Saikumar

Agenda for the Day … Automobile Industry

in General Role of IT in Auto

Industry ERP, Its Benefits &

Need of ERP in Auto Industry

Case Study – Maruti Udyog

Future Trends

Nayeem

Khushboo

Poornima

Rahul, Ankit, Paul & Maria

Nancy

Automobile Sector The Automotive Sector is one of the key

segments of the economy having extensive forward and backward linkages with other key segments of the Economy.

India holds huge potential in the automobile sector including the automobile component sector owing to its technological, cost and manpower advantage.

India has a well developed, globally competitive Auto Ancillary Industry and established automobile testing and R&D centers.

Automobile Industry in India9th largest automobile industry . 2nd largest two-wheeler market.11th largest Passenger Cars producers. 4th largest in Heavy Trucks.2nd largest tractor manufacturer.Annual production of over 2.3 million

units.The monthly sales of passenger cars in

India exceed 100,000 units. 

Indian Passenger Vehicle Market

Passenger Cars 52% 17% 19% - 1% 5% 2% 2% 2% 1% - <1% <1%

Utility Vehicles 2% 18% 1% 42% 21% 1% 10% 1% <1% - 4% - <1%

Multi Purpose Vehicles

100% - - - - - - - - - - - <1%

4th largest Passenger Vehicle Market in Asia

The Key Players …

Commercial vehicles

TATA Motors, Ashok Leyland, Swaraj Mazda, Mahindra & Mahindra ,Force motors, Eicher Motors

Passenger vehicle

TATA Motors, Maruti Udyog, Honda Motors, Toyata, Skoda, Mahindra & Mahindra, Daimler Chrysler, Hindustan Motors

Two Wheeler Hero Honda, Bajaj Auto, Honda Motors, TVS Motors, Yamaha , Kinetic Motors

Three Wheeler Bajaj Auto, Piaggio India

Bajaj Auto, 24.4%

TVS Motors, 17.7%

Yamaha, 3.8%

Others, 5.8%Honda

Motors, 8.5%

Hero Honda, 39.8%

Maruti, 50.37

Hyundai, 19.17

Tata Motors, 17.19

Honda, 5.33

Others, 5.73

Two wheeler Passenger vehicle

Automotive Trends The Indian automobile industry, though in

its nascent stage, is expected to set the ball rolling in the Indian Economy as well.

With the emergence of the financially sound middle class, the four-wheeler segment is set for tremendous growth and one can expect of more impetus to the economy from this sector.

No wonder that this industry has become the centre of attraction for most of the global automotive giants the world over.

IT in Automobile Industry Information technology has an increasingly

transparent financial sector have become key driving forces in business -- operations, strategies, structures, ownership, and performance.

The ability of traditional firms to achieve competitive advantage is predicated, in part, on their capacity to develop efficient, internalized information systems to provide market coordination and linkages between their operations and global commodity & financial markets.

The role of information technology (IT) in this process has never been in the foreground: it has always been infrastructural, making possible subtle but profound changes in nearly every aspect of the industry.

Mapping Path to Innovation Innovation in product and service design,

business process execution, and demand-chain planning & execution.

Companies, across the board, are implementing multiple initiatives to shorten the order-to-delivery time

Companies are pursuing product development process efficiencies while implementing collaborative product design and engineering within divisions and among their partners for efficient Supply Chain.

Joint planning, aggressive budget allocations, and a flexible, standards-based infrastructure that makes back-office information accessible to partners -- regardless of their IT infrastructure -- will enable the IT organization to achieve its business purposes.

SWOT AnalysisSTRENGTHS

Development of Just-In-Time Inventory Methods

Automotive Supply Chain

Assembly Line Manufacturing

WEAKNESSES Lacking Infrastructure Slowing pace of

growth Companies are not

improving after sale services.OPPORTUNITIES THREATS

Increasing Consumer Demands, Technology Development, Globalization

Usage of Alternative Power Trains

Hydrogen as Automotive Fuel

Global Crisis Company not focusing

on R&D under great risk

High Competition from Foreign Players

Lack of Technology for Indian Companies

Enterprise Resource Planning (ERP) Enterprise resource planning (ERP)

is an Integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources.

It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders.

Components Transactional Backbone

Financials Distribution Human Resources Product lifecycle management

Advanced Applications Customer Relationship Management (CRM) Supply chain management

Purchasing Manufacturing Distribution

Warehouse Management System Management Portal/Dashboard

Decision Support System

Benefits Reduction of Lead – Time On - Time Delivery to Customers Reduction in Cycle time Effective utilization of resources Satisfaction to Customers Improved supplier performance Increase flexibility Reduced quality costs Improved information accuracy & decision making

capability. Help reduce operating costs. Facilitate Day-to-Day Management. Support Strategic Planning. Order Tracking Reduces risk of loss of sensitive data

Necessity of ERP in Automobile Industry

Quick access to reliable business information.

High costs in inventory due to lack of visibility of the stock in work-in-progress stage.

Visibility into strategic information at every juncture .

To gain operational excellence.

Benefits of ERP in Automobile Industry Increase Operational Efficiency Gain Business Visibility Improve Customer Relationship Streamline Production Monitor & Control Expenses Reduce Errors Get accurate, timely information Global reach, better inventory visibility,

reduced distribution costs

Case Study – Maruti Udyog Maruti Suzuki India Limited has led India’s

car market for more than a quarter of a century.

First established in 1981, the company is now a fully-fledged subsidiary of the Suzuki Motor Corporation.

Its principal activities include the manufacture and sale of motor vehicles and spare parts via a 300-strong dealer network scattered across India.

Case Study – Maruti Udyog The year 2002 saw Maruti add finance,

leasing, insurance, and pre-owned car businesses to its portfolio, increasing the scale of its operations and prompting a review of its processes and systems.

Oracle Consulting was engaged to install a number of Oracle E-Business Suite modules and integrate them with Maruti’s existing systems.

Oracle also assisted Maruti with change management, a critical part of the process to ensure quick user acceptance.

Need To Strengthen Management Control Complexity of the IT environment and

reliance on certain people to maintain the systems, as the business is undergoing a period of rapid expansion, it was important to have a system that could scale easily.

To minimize the impact of the system change on its business, Maruti decided on a phased migration to Oracle E-Business Suite. As a first step, the company decided to replace its financial, purchasing, and human resources systems with Oracle Financials, Oracle Procurement, and a range of Oracle Human Resources applications.

Need To Strengthen Management Control Addition of 4 new business sectors in

2002 created further pressures, requiring constant monitoring & human intervention to keep the system operating across the hundreds of locations Maruti serves within India.

To support this growth and improve efficiency, the company decided to revamp its information technology systems to provide end-to-end visibility into the organization.

Integrated HR Systems Smartens Workforce Management

A period of rapid growth saw Maruti’s workforce expand to 5,000 people across India, and the company discovered that using mismatched systems to manage human resources was inadequate. What the company needed was a single, integrated system to manage its employees.

After implementing a range of Oracle Human Resources applications, Maruti reported better control over HR functions such as recruitment, payroll, compensation management, leave management, competency assessments, and staff development.

Standardization Improves Financial Insight

The problem with using multiple systems to manage finances was the lack of control over processes and information quality.

With Oracle Financials, Maruti was able to standardize on a single financial management platform.

Standardization Improves Financial Insight Each office followed different workflows,

which often meant one division lagged behind another in delivering information.

Differing data formats required tedious consolidation, preventing real-time access to critical statistics.

The company achieved tight control over accounts payable and accounts receivable, and gained a comprehensive general ledger that assists in the management of all financial information.

Streamlined Procurement Costs Some subsidiaries of Maruti had a

rudimentary system, while others relied on basic spreadsheets to manage the process.

This made it difficult for the organization as a whole to have control over capital and services purchasing, leading to escalating costs and excess inventory.

Streamlined Procurement Costs With Oracle, Maruti now has a

standardized platform to oversee procurement.

The company has set up a list of preferred suppliers to cut down on the number of vendors it deals with and ensure it has control over costs.

An automated workflow sends purchase orders along the approvals chain and keeps staff in the accounts payable department aware of all procurement activity.

Why Oracle?? Maruti has a successful history of Oracle

implementations The open interfaces of Oracle E-Business

Suite offered the best integration with Maruti’s legacy systems

Standardizing on Oracle technology and applications would also lower support costs and ensure easy upgrades in the future.

By engaging Oracle Consulting, they had an easy access to technicians with an in-depth understanding of the product and consultants with extensive project management experience and business understanding

Oracle Implementation Process Oracle Consulting deployed the Oracle

Human Resources modules. Oracle Consulting provided three months

of post-implementation support, and also assisted Maruti for one month in the lead-up to the company’s year-end closing.

Other Benefits Gained by Maruti Gained deep insight into financial

performance by using Hyperion to analyze budgets and consolidated accounts

Ensured a smooth rollout by engaging Oracle Consulting to supervise the design and deployment of the solution, and manage the implementation team

Achieved seamless integration with legacy systems, ensuring senior managers have visibility into business performance

Promoted user acceptance by developing extensive training programs to help staff transition to the new system

Future Trends & Processes in Automobile Industry

Automobiles today resemble “computers on wheels” because of the increasing number of digital systems under the hood and inside the passenger cabin.

Vehicle manufacturers offer more sophisticated electronic systems addressing vehicle safety, telematics, and infotainment.

Hybrid Vehicles wherein combination of Gas & Fuel to run vehicles to be used.

Future of IT in Automobile Industries Companies that spend more than 3% on

I/T (as a percentage of revenue) are significantly more likely to view I/T as an investment (79% investment vs. 21% cost) than companies that spend less than 3 percent (57% investment vs. 43% cost).

Tier 1 parts suppliers and Tier 2 systems suppliers were the only sectors to not cite "investment" more frequently than "cost." Vehicle assemblers were the most likely to believe that their executives support the investment perspective (82%).

Future of IT in Automobile Industries Linking systems and supply chain

partners Redesigning business processes to

enhance information flow “Reengineering business processes

through IT" cannot be accomplished without an organization structure (environment) that supports change and investment in process analysis and improvement tools/techniques such as Six Sigma.

Powertrain & Safety

Engine ManagementElectronic SuspensionBraking SystemsPower SteeringAirbagsGearbox

Convenience & Vehicle Controls

DashboardLights/SeatsClimate ControlVoice RecognitionRemote Keyless EntrySecurity Alarm SystemsWiper/Window Control

Driver Assistance

Night VisionLane Departure WarningCollision WarningPark/Reverse AssistTire Pressure Monitoring

Infotainment & Communications

TelematicsNavigation/GPSMultimedia SystemsAudio SystemsRear Seat Entertainment

More Technology Oriented Automobile Products

Evolution of Platform Concept Cat Model Differentiation is provided

with one basic diagramFast Automotive Innovation Cycle

A typical Automotive Design Cycle is approximately 24 to 36 months

Quick Prototypes Increasing Digital Content

Navigation Systems, Rear Seat Entertainment Systems, & Driver Assistance Applications

More Technology Oriented Automobile Products

Driverless Cars Fully Autonomous Vehicle Already Exist as prototype

New Energy Source & Materials A Variety of Alternative Fuel Vehicles

includes Electric cars, hydrogen cars, and compressed air cars

Thank You