More functionality, more responsibility
With advanced safety features and dashboard gadgets becoming part of the standard car purchase package, the responsibility for research and development falls squarely on auto parts suppliers rather than the manufacturers they supply.
According to a report by MarketsandMarkets, the market for automotive cockpit electronics is worth more than $34 billion. These features also now account for a greater share of the total value of a vehicle. Comparable parts for older models accounted for 1 to 2 percent of the cost, while today that percentage hovers between 8 and 12 percent.
Therefore, the quality of these precision electronics comes with additional responsibility. With an end-to-end ERP solution, comprehensive quality checks on outgoing materials will enhance quality assurance without interrupting production and transportation. The same applies to incoming materials or supplies and procurement operations.
Compete with giants
Online sales of auto parts can be both a blessing and a curse for the industry, depending on whom you ask and who's playing the game.
Online sales of auto parts are expected to reach nearly $9 billion this year.
On the one hand, online sales of auto parts are expected to reach nearly $9 billion this year, up 16 percent from 2016.
On the other hand, Amazon's recently announced entry into the industry has left component makers scrambling. Amazon will no doubt take a sizable bite out of that market share, and those online gains are supposed to be a lifeline for the brick-and-mortar business as sales stagnate and decline.
For parts suppliers that do not have an online presence, ERP software can serve as a basis for establishing dynamic e-commerce. For companies that already have an online store but are looking to optimize processes and compete more effectively with data, this is where ERP wins. In either case, as competition intensifies, ERP will uphold quality management standards by reducing administrative burdens and increasing flexibility.
Go to unknown parts
To spread risk and drive long-term growth, many auto parts manufacturers have begun to expand beyond their industry, using their injection molding machines and ingenuity to evaluate the potential of consumer and aerospace products. In addition, other companies have ventured into or strengthened their presence in the automotive parts aftermarket, which is expected to cross the $1 trillion mark by 2022, according to Global Industry Analytics Inc.
As companies increase their product portfolios, develop processes that differ from traditional production lines, and become more involved in aftermarket sales, they all need to pay careful attention to quality. Entering a new market puts any business, even a well-equipped one, at a disadvantage when it comes to design excellence, and peak performance in the automotive parts aftermarket requires a great deal of transparency about inventory and customer buying habits. An ERP system with CAD integration and easily accessible cross-departmental data can do both.