The concept of “just-in-time” manufacturing could have been invented for the automotive industry, one with tight supply chains that demand highly-integrated and specially-designed ERP software.
But there’s a gap, one that I believe isn’t being addressed and could place even the most sophisticated automotive manufacturer at risk.
The gap is packaging.
Here’s my central premise:
A perfect Just-In-Time (JIT) automotive environment, that manufactures every part right when it is needed, will still grind to a halt if the packaging necessary to ship this part is not available. The overwhelming majority of ERP software products fail here, and this can be an expensive failure for automotive manufacturers.
I’ve written a white paper that considers the central role that packaging plays in the automotive manufacturing value chain, and the importance of an ERP system that has fully-integrated package management, as automotive ERP from IFS does.
While you can also apply my arguments to many other industries, I believe that the demanding requirements of automotive supply chains mean that packaging management is of intense concern. Logistical processes depend more and more on the availability and proper handling of elements necessary to bring the product to market – including packaging.
In the white paper, I discuss package management complexity that an ERP system must deal with in a sector like the automotive industry.
It is considerable:
The starting point is the identification of empty packages. In most cases, it is enough to typecast a package with generic descriptors … a Euro pallet, for instance, with specific dimensions and material. At this level, uniform dimensions, reusability and quantity in stock can be managed. Sometimes, it is necessary to individualize certain characteristics, such as exact weight, integration into Kanban circuits, etc. so that the package can be identified even after several cycles.
The white paper includes assessment in three key areas:
- Flow of goods and flow of packing material are closely connected
- The package flow must be exactly tracked
- The whole is more than the sum of its parts
And my conclusion is clear:
Unless ERP addresses packaging management, a substantial and critical element of the business will be invisible to executives using ERP … just as if a portion of the business has disappeared into a black box. This is a core part of your product and ability to serve your customers in the automotive industry.
Please download a free copy of the white paper “What One ERP Failing Could Hamstring Your Automotive Lean Initiative?” for the complete picture.
How do you see this issue – and the solution? I’d love to hear your opinions.