It is now much easier for local automotive component manufacturers to access the global market, thanks to a new SAP-based solution. The solution allows manufacturers to easily integrate with original equipment manufacturers (OEMs) worldwide and trade electronically.
According to Business Connexion's Eastern Cape regional chief executive, Gert Cronj'e, not many of the more than 400 medium-sized companies in this sector have a SAP solution, while nearly all of the OEMs they supply are SAP users.
However, the SAP All-in-1 solution marketed by Business Connexion brings synergy to the relationship between component manufacturers and OEMs, and helps in opening up the global market for component manufacturers.
Cronj'e adds that the small and medium-sized companies have very specific requirements and needs.
"The nature and size of these organisations requires a cost-effective solution that has the right balance between standardisation and customisation, and that is industry-specific and repeatable."
He says this is where the Business Connexion All-in-1 solution fits in. "It is a pre-packaged solution that includes content, tools and methodologies and can be implemented through a cost-effective, turnkey project."
Given Business Connexion's experience and record of accomplishment in the automotive sector, SAP appointed the company as one of its channel partners, accredited for the automotive component supplier sector.
With the huge gap in software systems between the OEMs and their component manufacturers, there is a real need with the vast majority of the large and even some of very small component manufacturers to run software systems that have alignment or compatibility with the OEMs' systems.
"These automotive component manufacturers are looking for more advanced functionality in their software, and integrated applications that can bring their manufacturing processes and logistics together. While they are attracted to the SAP solution, perceived cost and lack of flexibility was a prohibiting factor," says Cronj'e.
Business Connexion developed the All-in-1 template for the automotive component supplier industry based on the standard SAP ERP solution. The All-in-1 solution targets companies with 25 users and upwards and represents a solution that is comprehensive, yet flexible enough to meet the unique needs of the automotive component suppliers. It is also scalable, which allows for growth in terms of company size or functionality.
"In this sense, template means that the solution is preconfigured with automotive industry best practices and scenarios and localised to the South African environment. Also included are specific organisational structures and local programmes, such as the Motor Industry Development Programme (MIDP), which is a huge drive to improve productivity and export and import potential of these organisations."
A large percentage of the recent growth in the automotive industry came because of the MIDP incentives. Only through globalisation will companies be able to take advantage of this incentive in the future. "It is not only to supply the local OEMs, but to supply the global manufacturers as well. A few of these SMEs are already exporting and making use of the incentives. The business application in place must take account of this from a local perspective, be able to measure and report on MIDP activity," concludes Cronj'e.
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