by April 2, 2012 0 comments

Indian automobile industry constitutes two types of sub industries –those involved in building automobiles and others who’re involved in building automobile components. The latter is the one where SMEs come into picture and would be our focus area here. Automobile industry in India has huge potentials thanks to the growth of the middle class along with their overall economic growth. This is the reason of attraction for international brands who are trying hard to find new market for their products due to stagnated growth of auto sector in Europe, US, and Japan.

Potential of Indian automobile industry can be best understood by following features: India is the second largest two wheeler market, fourth largest commercial vehicle market, eleventh largest passenger-car market, and fifth largest bus and truck market. With these facts in mind, let’s talk about auto-component sector in particular. This segments is further divided into five sub segments –engine parts, drive transmission and steering parts, suspension and brake parts, electric parts, and body and chassis. According to the Automotive Manufacturers Association of India (AMAI), this sector is projected to grow at a CAGR of 10% till 2015-16; India is projected to be among top five automotive economies by 2025. The Indian automotive industry is largely classified in four clusters –Chennai, Pune, Pithampur, and NCR.

In view of such huge potential, the Government of India has launched a 10-year plan —-Automotive Mission Plan (AMP), 2006-16 which aims to make automobile industries’ contribution to GDP more than 10% while providing employment to 250 lakh people.

Challenges in Automobile Industry

Being a manufacturing vertical, usage of IT is always a challenge in this cluster. People especially those working at lower ranks are always skeptical about using IT which makes implementation and then execution of packages like CRM or ERP a big challenge. Automotive parts manufacturers or auto components industry is highly dependent on OEMs. This leads to pressure from OEMs for implementation of stringent controls over quality of component and reliability of delivery. In modern competitive environment local manufacturers of component are under huge pressure to adapt to global standards so that delivery and quality can be controlled. To overcome these challenges IT has a huge part to play.

Challenges of automobile industry can be categorized into three levels depending on the size of the company. There are those who have basic IT structure in place and are looking to implement complex packages to gain competitive edge and then there are those who have small or negligible IT budget to lack of understanding about how IT can actually be helpful to them.

Supply chain

This is an end to end system that involves tracking from raw material stage to the point when finished good is actually delivered to customer. This means that all the different suppliers and the main manufacturers have to align their process so that there is least inventory in the system. In fact the main agenda of supply chain is to somehow minimize capital tied in the inventory. Auto component manufacturers are suppliers to OEMs, therefore to get regular business they have to streamline their supply chain which can only be achieved by choosing a good SCM package

Inventory tracking

Weather it is finished good, work in progress, or raw materials, it is always nightmarish to track inventory. Success and failure of SCM depends on how accurately can you track your inventory. One way to achieve this is using unique identification for each part which in turn can be achieved by RFID.

Reaching out

The only way to reach out to prospective customer is to get involved in activities through which one can get in touch with customers and understand their requirements; the most economical way to achieve same is using Internet. Start with creating social media page and add your customer, keep track of what customer needs and what industry trend is.

24×7 Mercantile House

24×7 is India’s leading distribution company of vintage auto parts. Naveen Pamnani director of 24×7 had the vision to sell automobile parts, engineering goods and hand tools directly to end consumers. In 2011, he realized the immense potential of the Internet and started selling spare parts for vintage bikes and scooters on eBay. Today, the company specializes in customized body parts for vintage British Bikes like Royal Enfield, BSA, Triumph, Norton, AJS, Lambretta and Vespas and also specializes in restoration of vintage bikes. Naveen Pamnani has built a successful and sustainable business leveraging ecommerce. Here are few milestones that he has achieved:
In the first month 24×7 Mercantile House clocked sales of over $10000.
The company is 100% online and has more than 10000 customers spread over the globe from US, UK, Australia, Europe and even Uruguay and Israel.
Total annual sales volume US$1 Million – US$2.5 Million

“Indian industries primarily depend on conventional energy. However, the cost of conventional energy is ever increasing and has a significant impact in terms of GHG”

Please highlight some compelling IT solutions for Indian SMEs?

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GreenField Software (GFS) is a pioneer in campaigning for economic and sustainable change through enterprise software focused on Energy & Environment Management. The fundamental aim is to help a customer determine its current energy and improve operational energy efficiency, reduce energy costs and lower GHG emissions as well as help the customer manage & report on voluntary or compliance related guidelines on environment including recycling, waste and water management.

GreenField Software is in the market with three software products belonging to the GFS Crane family:

GFS Crane DC: Data Center Infrastructure Management (DCIM) software.
GFS Crane MR: a Manufacturers’ Repository that is licensed as an option with GFS Crane DC but also can be licensed as an independent product
GFS Crane SMS:Energy & Sustainability Management (ESM) software.

We provide advisory services in the following areas:

Data Center Energy & Operational Efficiency, including Data Center Best Practices
Data Center Thermal Mapping
Sustainability Strategy, including preparations for Sustainability Reporting
Optimal Energy Mix and Total Life Cycle Capital Costs for renewable energy options
Waste Management.

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What other technologies can be used to make organizations more energy efficient and report sustainability?

Energy Efficiency is dependent on three parameters: (a) age, condition and power consumption of machinery deployed, (b) Chemistry (for most chemical operations)), manufacturing technology (for other industrial operations) or computing methods (for a Data Center), and (c) processes followed. We provide information management systems that focus on processes. The system has the provision to capture benchmarks for different sub-processes industry-wise. It then monitors energy consumption and compares with benchmarks. Our analytic tools identify leakages and sub-optimal processes and then recommend measures for improved energy and operational efficiency. The system also captures list of all equipment along with their age and power consumption details. It then makes recommendations which equipment may be consolidated, retired or replaced.

What are your expectations from IT in India in terms of energy efficiency and sustainability management?

Indian industries primarily depend on conventional energy. However, the cost of conventional energy is ever increasing and also has a significant impact in terms of GHG. emissions. For energy intensive industries these are becoming huge business risks. Organizations are therefore looking at measures beyond annual energy audits.

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