One of the most vital parts of the automotive industry is sales and manufacturing. In order to maintain adequate quantities of resource material, inventory management is required, which is where ERP is again a savior for this industry as it comes with inventory management protocols that remove all the hurdles that would have come in the way of proper and efficient inventory management.

Without an ERP, the automotive industry cannot deliver their orders timely as the company would not have been able to manually and efficiently manage upgrades and customizations. This gives an additional reason for the need for ERP in the automotive industry. Now, with the help of an ERP, vehicles can be ordered and stored at the dealership studios.

For example, you are a company that builds cars by procuring parts and components from multiple suppliers. Now, in order to track the requisition and purchase of these goods and to ensure that each component across the entire procure-to-pay process uses uniform and clean data connected to enterprise workflows, business processes, reporting, and analytics, you use an ERP system.

Another example is you are an automotive manufacturing company, and you have deployed an ERP system. Due to this, a component known as front brake pads, as manufactured by you, is uniformly identified by part name, material, size, lot number, source, supplier part number, cost, serial number, and specification, along with a plethora of other descriptive and data-driven items.

Further on, the use of the ERP system will also ensure that the above-mentioned attributes and data fields roll up to the correct account in the company’s general ledger so that all the costs are properly tracked and represented.

This is very important for calculating various figures like the cost of goods sold, gross profit, etc., because if, for example, front brake pads were called front brakes in one system, brake pads in another, and front pads in the third, and it would become tough for your manufacturing company to figure out how much is actually being spent annually on front brake pads, and whether for example it should switch suppliers, or negotiate for better pricing.

Considering that ERP systems can bring solutions for aspects like inventory management, customer relations, product delivery, marketing inefficiencies, and shipping, ERP systems are important for the automotive industry.

More so because when the various features of ERP combine, it traces and analyzes every departmental action of your organization to exercise better control over actions that lead to productivity and efficiency.