The impact of export growth in the automotive industry has positioned SA as a global industry player. With the influx of new automotive export contracts, SA`S automotive industry is booming and industry growth has been announced by many of the big players. Not only will the car manufacturers benefit - the spin-off is an increased demand on suppliers of parts to these car manufacturers to intensify their output.
According to reports on the web site, Wheels24, Toyota South Africa is to increase its production considerably with the aim of supplying the European market, Volkswagen SA has recently been awarded an export contract worth R12 billion over the next six years, Nissan SA has received a R1 billion contract to export locally built single cab pick-ups, BMW South Africa`s upgraded Rosslyn plant will have the capacity to produce 60 000 vehicles per year and increase BMW`s export capacity to R50 billion, and the bulk of Daimler Chrysler AG`s C-Class Mercedes-Benz is destined for the export market.
"The increased growth within the industry will put pressure on car manufacturers to produce to a specific timeline and minimise their costs by maintaining inventory levels as low as possible," said Bryan Nelson, managing director of QAD South Africa, supplier of ERP solutions for manufacturers. "A major opportunity lies in shortening the response time, throughout the supply chain, to customer changes in demand. Enhanced electronic communication and a more responsive, integrated supply chain are essential to the supplier in providing improved visibility and reaction time to events occurring at the car manufacturer.
"In traditional supply chains, companies cover uncertainty by stocking `safety` inventory, an expensive, high-risk strategy. In order to optimise supply chain performance and for a true partnership relationship to exist, car manufacturers and their suppliers need to move more quickly toward cross-company visibility by opening up the necessary information systems and processes to each other. In this way, inventories and transaction costs can be reduced substantially and transactions can be executed with increased speed. Electronic Data Interchange (EDI) facilitates the transfer of structured data, by agreed message standards, from one computer application to another by electronic means. The data can be processed automatically and unambiguously between two companies," said Nelson.
Cascade Engineering, manufacturer of plastic components for the automotive, furniture and waste management industries, is a user of multiple components of the QAD MFG/PRO enterprise suite -from its base financial and manufacturing functionality to newer additions like the EDI ECommerce module and Supply Visualization.
"The increased efficiency is evident in virtually every aspect of Cascade`s business - from the way it manages customer orders to its processes for planning and scheduling the flow of material through its factories and its procedures for shipping products," said Lowell Johannsen, Cascade`s IT project manager. "Our business is primarily in the automotive industry, which is why we needed a system that can handle release management through EDI.
"When we receive orders, either through EDI or over the Internet, they go directly into the order management component of MFG/PRO," said Johannsen. "That allows us to run a material requirements plan at any time during the day."
According to Johannsen, the investment by Cascade Engineering in QAD`s MFG/PRO has more than paid off. "We have received multiple benefits from the suite. Our inventory control process improved dramatically, with inventory turns increasing 47 percent, and inventory accuracy improving by 25%. With EDI ECommerce and Supply Visualization, we will achieve 100% connectivity with our trading partners."
Web collaboration technology enables the car manufacturer to integrate its inventory management system into a secure Web layer simply and automatically, which allows all authenticated suppliers to search inventory levels of the car manufacturer in real-time through their browsers, without worrying about data integrity or timeliness. Car manufacturers have access to a supplier`s data to check order status and enter orders directly into the system. The result is a shortened response time to customer changes in demand.
The use of EDI can provide the supplier visual access to the stock levels in the factory via the Web, thus enabling enhanced electronic communication, enabling lower inventory levels without having to build in costly safety stock buffers. This level of co-operation results in significant reductions in inventory and associated transaction costs. Over time, it can lead to the integration of other processes, such as design, production engineering and materials planning.
Shortages can be communicated instantly back to the car manufacturer using integrated messaging and chat facilities. With this technology, the car manufacturer saves overhead in inventory while significantly improving customer services and achieving competitive advantage.
"Manufacturers in the increasingly competitive automotive industry are constantly looking for ways to streamline their supply chain and reduce costs. EDI and Web-based inventory visibility applications will assist the manufacturer realising this goal," said Nelson.
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QAD enterprise applications leverage advances in Internet and enabling technologies to provide critical functionality for managing manufacturing resources and operations within and beyond the enterprise, enabling global manufacturers to collaborate with their customers, suppliers and partners to make and deliver the right product, at the right cost and at the right time. Manufacturers of automotive, consumer products, electronics, food and beverage, industrial and medical products use QAD applications at 5 200 licensed sites in more than 80 countries and in as many as 26 languages. For more information about QAD, telephone +27 (0) 11 461 6900, or visit the QAD Web site at www.qad.com.
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