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Of late, technology has become imperative to run any decent-sized automotive industry; Whether it is a vehicle manufacturer or an auto components supplier, IT has found widespread usage in the sector. As one of the most mature verticals, the Indian automotive industry has for long used IT in various facets since the 1960s when IT usage was limited to data processing and technology including accounts processing, maintaining inventory transactions, records and related MIS. The focus then was on Batch Mode of operations.

As one of the earliest adopters of IT, the automobile sector has always deployed the latest cutting-edge technology right from projecting the costs involved in doing business to using IT as an important tool to counter competition.

The key drivers responsible for the increased adoption of technology in the automotive sector are the two Cscustomer and competition. The customer is the king here and the two Cs indicate the responsiveness toward the customer, whether proactive or reactive. For instance, if a company needs to be proactive, it also needs to understand the customer pain points and collate data from primary sourcesdealers and customers. A strong method of data collection is required, ie, when the customer walks into a showroom, it is imperative that all the relevant information is captured, which can be used later to define the customer requirements, says Hilal Isar Khan, CIO, Honda Motors.

And this data collection can only be done with the enablement of systems to collect data in order to play with data to arrive at the management information system. This enables the management to chalk out a strategy in terms of product launch and product positioning.

The second important driver is competition, ie, reducing the time to market. With growing cutthroat competition, companies are feeling the heat to penetrate newer markets. And this can only be achieved by shortening the product lifecycle, which, in turn, is possible if data is collated from suppliers in time.

Cost reduction, too, is an important element in an industry where material costs assume a huge proportion of the total cost; it is the customer value which drives IT deployment. And this customer value, meanwhile, is linked to the changing expectations of the customer in an environment where he has a choice, says N Chandrasekaran, special director, Information Management Systems, Ashok Leyland.

Driving IT Adoption
The T of IT has found a place on the shop floor through control systems used with plant machinery while the I has been deployed in the back-office stage. In the early stages of IT infiltration, organizations used computers for payroll processing, financial accounting, resource management, procurement, and IT enabled MRP followed by integrated ERP, says N Chandrasekaran.

Technology is an important tool to capture data from end-to-end transaction and this data is then used in supply chain, dealer, and finance management.

I believe that benefits are much more than cost reduction and automation Arvind Tawde, Group CIO, Mahindra & Mahindra	We are able to design products much faster and are developing complex and advanced products using IT Manish Gupta, head IT, Tata Motors	Agility is the name of the game and as an automotive company we constantly need to work on increasing agility Rajesh Uppal, CIO, Maruti Udyog	Customer value drives IT, and is linked to the changing expectations of the customer N Chandrasekaran, special director, Information Management Systems, Ashok Leyland

The key requirement in the automotive sector originates from the shop floor, which requires a lot of system support in terms of material planning, production planning, and quality control. But, most importantly, technology is used to define business strategy in such a way that business objectives are met and at the same time product quality is not compromised.

Usage of technology is not just limited to offices generating a few MIS reports and doing the financial accounting but for providing real time manufacturing support for tracking inventory; planning procurement, planning production on the shop floor; tracking quality-related issues like vendor rejections, shop floor rejections, jigs and fixture tracking, defect analysis and quality improvement support systems, says Prabhakar Deosthali, consulting head, IT Solutions, Kinetic Communications (the IT arm of Kinetic Group).

The demand of the automotive segment in terms of IT solutions can be broadly divided into three categoriesend-to-end ERP package for complete coverage of transactions within the enterprise; extended system for the ecosystem and partners like dealers (dealer management system) and suppliers (supplier collaboration system) and a supply chain management; and specific technology solutions that go into the manufacturing of cars, like Telematics solutions, navigation system, air bag system, key-less entry system, etc.

Any automotive unit would also require IT support in terms of various systems including product development, manufacturing resources planning, inventory control, depot and branch operations, integration of the system with dealers and service centers, business intelligence systems for market analysis, real time interaction between the plant systems, and the business and MIS systems at the head office.

Benefiting from IT
Complex supply chain and end-to-end processeswith suppliers at one end and dealers, customers at the otherare seamlessly integrated and effectively manage using IT. I believe that these benefits are much more than cost reduction and automation, says Arvind Tawde, Group CIO, Mahindra & Mahindra.

The initial wave of IT adoption involved getting the end-to-end basic transaction systems in place, essentially the ERP. The opening up of the organizations boundaries to include partners like dealers and suppliers followed this up. The earliest IT initiatives were related to the optimization required on the shop floor. These initiatives, known as MRP (manufacturing resources planning), resulted in IT systems vendors offering solutions called MRP-I and MRP-II, says Deosthali.

Even as dealers and suppliers have been connected individually to the companys enterprise system through dealer management system and material transaction system, the two (dealer and ERP and supplier and ERP) have been disjointed from each other. The focus is now on integrating dealers, suppliers, and enterprise systems into a seamless system and creating a real-time Web-based end-to-end system.

Tata Motors, for instance, even connected its dealers online for all sales transactions including after-sales, thereby achieving greater market-related efficiency and higher customer satisfaction. Significantly, Tata Motors is the only company in the world where dealers work online on a common database shared with the OEM. It helps us capture market demand on a real-time basis and align supply chain accordingly, says Manish Gupta, head, IT, Tata Motors.

Ashok Leyland, too, is not far behind when it comes to using the online medium for better dealer-supplier coordination with the main unit. While a Web-based portal is in place for supplier performance management, dealers can order their part requirements via the Web, says N Chandrasekaran.

The dealer management systems are in the process of moving from a decentralized to a centralized architecture. Most of the auto companies are now looking at a common system hosted at their website with the availability of real-time dealer data so that inventories, back orders of dealers, transportation, and dispatch details can be done effectively.

Manufacturing processes have come out of the boundaries of the organization and have extended much beyond it. With suppliers and service providers becoming partners in manufacturing, the challenge is to manage business partners effectively and efficiently. The increasing complexity of products and processes is also becoming a key challenge, says Tawde of M&M.

The other area where IT is increasingly finding usage is product designing. Gupta of Tata Motors believes that automotive companies are able to design products much faster and are developing complex and advanced products using IT.

The complete design can be simulated using IT, which enables auto companies to crash the time to market and bring in better design quality. So, for instance, if you have a good drawing system, you have the ability to interact with the principal and the supplier, thus bringing in the benefits of both time and cost.

Increasingly, a majority of auto companies are now beginning to use IT in providing improved customer experience. With customers being the kings here, the product has become an important part of the overall customer offering. Other aspects like after sales service, product presentation, and customer interaction form an integral part of the customer experience.

On the Horizon
Technology in an automotive company has moved from its initial stages when it was seen as a cost of doing business; at that time one needed to provide systems for function processes. This stage also included integrating all these diverse processes since it was advisable to have minimum islands of applications for ease of integration.

The second stage was when IT was used as a medium of growth; in this stage, automotive companies started using the data gathered because of system enablement for business understanding. The current stage is using technology more as a strategic tool for gaining the required edge in the market on the basis of data gathered under which automotive companies are doing dashboard solution and analytics, says Rajesh Uppal, CIO, Maruti Udyog.

Agrees Gupta that IT has moved from basic back office functions like ERP to manufacturing, design, and customer care. Moreover, automotive companies are looking to strengthen their manufacturing and design processes and deploy solutions to engage customers, he adds.

The technology trends in the segment are on par with, or even ahead, of global trends. The competitive environment, customer expectations, need for faster turn-around time in bringing new products, and infrastructure development are all making the auto sector look at global sourcing, lean development, lean manufacturing, supplier collaboration, extensive MES deployment and integration, engineering research, embedded vehicle intelligence. IT has gone beyond the conventional ERP, and IT solutions are increasingly becoming a strategic need rather than playing the support role, says Ashok Leyland.

Essentially IT in the automotive segment is all about how fast a company can adjust to the market requirements and bring about the resultant change on the shop floor. Agility is the name of the game and as an automotive company we constantly need to work on increasing agility, says Uppal.

In the coming times, the trend for IT solutions would be tilted more toward integration on the shop floor such as interfacing the plant automation systems and the supervisory control and data acquisition systems (SCADA) along with IT systems for job shop scheduling and planning processes. On the business front, there could be dependency on business intelligence for market analysis, product mix strategies, and sales forecasting.

Stuti Das
stutid@cybermedia.co.in

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