The Indian Auto Component Industry

Production Approx 75 lakh vehicles per year Turnover INR 150,000 crores Provides employment to 1.3 crore people Contributes 20% of indirect tax revenue Significant linkages with the rest of the economy
linkage Insurance and oil industry Backward linkage Rubber, steel, plastics and electronics
Forward

Competitive advantage from the sector to India capability to manufacture the entire range of auto components ex: engine parts, drive, transmission parts, electrical parts etc. 22 out of Indias Top 500 companies auto component manufacturers Expected CAGR (2006 to 2014) 17% Exports could grow by 34% in the above period

Business Challenges

Availability and volatility in costs of raw material Procurement of raw material Meeting customer demand for product quality Quick access to business information
Disparate

systems including manual paper based processes

Availability and implementation of IT not a critical business challenge

What is the expectation from IT?

Challenges faced by IT heads

Factors influencing the adoption of IT

Better inventory control Better business process flow Competitor pressure Need to exhibit technological advancement to customers Streamlined finance and products

Measuring the IT effectiveness

Increased productivity Increased revenues Customer satisfaction ROI analysis

Critical business processes

Order receipt and demand management Production planning and scheduling Order processing Material handling Accounting

Order receipt & Demand Mgmt

Receiving the orders Providing a timeline for the delivery Projection of demand Achieved without manual intervention Orders accepted through extranet, reducing the time taken to receive orders

Adoption of IT

IT applications and infrastructure

Categorization

IT Strategy
Level Level I Current Level of IT usage 1. No/Less IT support 2. No/Less IT skilled workforce 3. By Owner/Child of the owner/Young employees Presence of basic IT infrastructure Possibility Ahead Lay the foundation of IT programme by tracking of information, ensuring data accuracy & role of email-based transactions Support for reducing transaction errors In purchasing, bill of material, invoicing, dispatches, etc. Establish and implement planning system which will lay the foundation for better decision making.

Level II

Level III 1. Use IT for regular transactions 2. Use data for operational analysis

Level IV Use DSS and customized software so as to make quicker and better decisions

Prepare for enterprise-wide IT implementation, data transfer between multiple locations & integration of various business functions

MES (Manufacturing Execution System)

Heart of CIM (Computer Integrated Manufacturing) MES is the middle ground between ERP and individual machines and automation controls MES provide overall control and management of the factory floor, and provide updated information the ERP

Integrated Approach

Relationship
Corporate
production planning, scheduling

MRP II/ ERP

batch, production run reporting or completion

Planning
When/What to make Planned/standard lead times/ yields/wastes/costs

Focus Customer Decision Location Office

Execution
Production management/tracking - WIP, equipment, operators Production scheduling Quality control/SQC Costing Maintenance Management functions Communications, reporting

Focus Product Decision location Factory

Plant
recipes process setpoints operating instructions

MES
actual process conditons, completion of process steps and operations, performance of equipment and raw material and operator actions

PLC

Robots/ AGV

Control
Ladder logic Continuous feedback PID Advanced control

Focus Process Decision location Shop/Plant Floor

DCS

Tata Technologies
Better at making IT work today Better at making IT work better tomorrow
End-to-end Manufacturing Execution System (MES) customization and implementation services enable real-time production control; thorough data collection and reporting; industry-leading manufacturing domain knowledge paired with advanced technology.

Key Benefits
Scalable, customized MES solutions Benefits at a number of application and price points Mistake-proofing at assembly and production stages Drastic reductions in rejections Increase in down-the line-efficiencies Data collection to pinpoint product genealogy and support root-cause analysis Accurate and real-time feedback on inventory Tighter integration with supplier chains

Way Ahead
Manufacturing companies Identification of current position in the hierarchy Why IT adoption not a key challenge and priority Measure of effectiveness IT viewed as Integral to competitiveness Work closely with the IT firms Focus on reducing lead times to reduce costs

Way Ahead
IT firms Understand manufacturing firms current level Create network of small and large IT firms Service models that provide choice and flexibility Focus on entire supply chain Develop firm specific focus based on its capabilities

Way Ahead
Industry associations Impart domain knowledge Organize exhibitions and marketing efforts Invest in creating Innovation in manufacturing fund Use the hierarchy model for promotion of IT