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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

Forward linkage Insurance and oil industry

Backward linkage Rubber, steel, plastics and

electronics

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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

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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

processesAvailability and implementation of IT not a

critical business challenge

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What is the expectation from

IT?

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Challenges faced by IT heads

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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

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Measuring the IT effectiveness

Increased productivity

Increased revenues

Customer satisfaction

ROI analysis

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Critical business processes

Order receipt and demand management

Production planning and scheduling

Order processing

Material handling

Accounting

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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

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Adoption of IT

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IT applications and

infrastructure

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Categorization

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IT Strategy

Level Current Level of IT usage Possibility Ahead

Level I 1. No/Less IT support

2. No/Less IT skilled workforce

3. By Owner/Child of the

owner/Young employees

Lay the foundation of IT programme by

tracking of information, ensuring data

accuracy & role of email-based

transactions

Level II Presence of basic IT

infrastructure

Support for reducing transaction errors

In purchasing, bill of material,

invoicing, dispatches, etc.

Level III 1. Use IT for regular

transactions2. Use data for operational

analysis

Establish and implement planning

system which will lay the foundation forbetter decision making.

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

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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

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Integrated Approach

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Relationship

Corporate

Plant

MRP II/

ERP

MES

PLCRobots/

AGV

DCS

production planning,

scheduling

recipes

process setpoints

operating instructions

batch,

production run

reporting or

completion

actual process conditons,

completion of process steps

and operations, performance

of equipment and raw

material and operator

actions

Planning When/What to make

Planned/standard lead times/

yields/wastes/costs

Execution

Production management/tracking- WIP, equipment, operators

Production scheduling

Quality control/SQC

Costing

Maintenance

Management functions -

Communications, reporting

Control Ladder logic

Continuous feedback

PID

Advanced control

Focus

Customer

Decision Location

Office

Focus

Product

Decision location

Factory

FocusProcess

Decision location

Shop/Plant Floor

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Tata Technologies

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 advancedtechnolo .

Better at making IT work today

Better at making IT work better

tomorrow

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Key Benefits

Scalable, customized MES solutions

Benefits at a number of application and price

points

Mistake-proofing at assembly and productionstages

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

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Way Ahead

Manufacturing companies

Identification of current position in the

hierarchy

Why IT adoption not a key challenge andpriority

Measure of effectiveness

IT viewed as Integral to competitiveness

Work closely with the IT firms

Focus on reducing lead times to reduce

costs

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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

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Way Ahead

Industry associations

Impart domain knowledge

Organize exhibitions and marketing efforts

Invest in creating Innovation inmanufacturing fund

Use the hierarchy model for promotion of IT