Automotive parts manufacturing ERP systems strengthens these companies against disruption by increasing the one thing no supplier ever has too much of: quality management.
More features, more responsibility
As advanced safety features and in-dash gadgetry become part and parcel of the standard car-buying package, the onus of R&D falls squarely on automotive parts suppliers, not the manufacturers they supply.
The market for automotive cockpit electronics is worth more than $34 billion, according to a report from MarketsandMarkets. These features now also comprise a greater share of total vehicle value. Whereas comparable parts in older models accounted for 1 to 2 percent of cost, today that percentage hovers between 8 and 12 percent.
The quality of these precision electronics, therefore, carries over with that added responsibility. Integrated quality checks on outgoing supplies, facilitated by an end-to-end ERP solution, will strengthen quality assurance without disrupting production and shipping. The same can be said for incoming materials or supplies and purchasing operations.
Competing with giants
Online sales of auto parts are both a blessing and a curse for the industry, depending on whom you ask and who's playing the game.
Online sales for car parts are projected to hit nearly $9 billion this year.
On the one hand, online sales for car parts are projected to hit nearly $9 billion this year, a 16 percent increase over 2016.
On the other, Amazon's recent announcement of a foray into the sector sent parts producers scrambling. Amazon will undoubtedly bite a sizeable chunk out of that market share, and those online gains are supposed to be the saving grace for brick-and-mortar operations with plateauing and declining sales.
For parts suppliers without an online presence, ERP software can act as the foundation on which to build dynamic e-commerce. For those that already have an online store but are looking for a way to optimize processes and leverage their data more effectively to compete, that's exactly where ERP triumphs. In either situation, ERP will uphold quality management standards as the competition amps up by reducing administrative burdens and increasing agility.
Traveling to parts unknown
In an effort to diversify risk and drive long-term growth, many auto parts manufacturers have started to branch out beyond their sector, using their injection molders and ingenuity to assess the potential of consumer-grade and aerospace products. Moreover, others have ventured into or bolstered their presence in the auto parts aftermarket, which is expected to break the $1 trillion mark globally by 2022, according to Global Industry Analysts Inc.
As companies add to their product portfolios, formulate processes unlike their traditional production lines and participate more in aftermarket sales, they will all need to pay careful attention to quality. Entering new markets puts any business, even a well-equipped one, in a vulnerable position with regard to design excellence, and top performance in the auto parts aftermarket requires a great deal of transparency into inventory and customer purchasing habits. An ERP system with CAD integration and easily accessible cross-departmental data takes care of both.
Learn more about how automotive parts manufacturing ERP in your plant can incorporate new technology to enhance quality and drive competition by downloading our e-book, "KPI Playbook for Modern Manufacturers."