How ERP enables traceability in the automotive parts and accessories industry

The automotive industry is in a perpetual state of change. Globally linked economies, tight competition, and emerging markets all force constant review of production goals, suppliers, and long-term strategies. The automotive industry sets some of the highest quality standards in manufacturing, driven by a need to ensure safety and a desire to control costs. Increasingly, car makers are asking their suppliers to provide full traceability of parts through the supply chain. If a batch of components proves to be faulty, it should be traceable back to its original manufacturer, and forward to the cars that may ultimately require repair or recall.

The global market for vehicles today is placing a greater demand on the experience inside the vehicle, rather than simply the ability to get from point A to point B. When manufacturers have to recall vehicles to workshops, they can certainly expect media attention. In the past Toyota had to recall 2.9 million vehicles due to defective airbags and Audi had to recall over one million cars on safety grounds, publicity that the manufacturers could do without. Such recalls are the result of subsequently recognized quality defects. The more complex industrial production processes become the more complicated and difficult it is to ensure the necessary quality standards.

With the focus in the automotive industry being improving quality, safety, reducing costs, optimizing processes, and ultimately improving time-to-customer throughout the supply chain, having a strong traceability within your organization is a key component to overall success.

What is traceability in the automotive industry?

Traceability for the automotive industry is a process that documents the genealogy of the parts and subassemblies associated with a specific vehicle or range of vehicles. The type of information tracked will vary, but some of the more commonly collected information includes but is not limited to: source of manufacturer, manufacturing facility, place of origin, production time and date, Lot number, part number, model number and components used in the assembly.

All this data can be accumulated and combined into a barcode and marked on the part. Barcode readers then decode the data throughout the part’s lifecycle and reliably transfer the information into an ERP software system ensuring full traceability for each part of a finished vehicle.

A robust traceability system

Traceability is especially challenging because problems can occur at any point along your supply chain, from R&D through materials handling to assembly and shipping. Broken or slow processes can be particularly costly and dangerous. To create a robust traceability system also means that you need to define the scope of your traceability. The scope defines what needs to be put in place to be able to track the entire supply chain and identifies elements required to ensure that the system encompasses the full traceability of the product. Examples include:

Supplier Traceability – Evaluate the scope required to incorporate traceability of suppliers and their products entering the organization.

Process Traceability – Evaluate the scope required to incorporate traceability of products through the organization (whether new products are produced or not).

Customer Traceability – Evaluate the scope required to incorporate traceability of products to the immediate customer.

Benefits of traceability

You may ask, is it worth putting a barcode on each of the thousands of parts that make up a vehicle? Yes, it is. By implementing a well-designed traceability system, organizations can prevent disaster and access other multiple benefits including:

  • Quality control
  • Fight against counterfeiting
  • Operational efficiency
  • Customer satisfaction
  • Meet compliance mandates


How can traceability be achieved?

The ideal ERP solution can provide a traceability system that offers full visibility throughout the value chain to ensure quality and continued compliance with regulatory requirements. It should provide the ability to trace, identify, isolate, report and place affected products on hold quickly and with minimum disruption. Navigating the complexity of a recall becomes simpler when you’re able to act quickly. A traceability system within ERP software enables automotive industry manufacturers the ability to effectively quarantine or place products on hold as well as to trace backwards and forwards, report on affected products, deal with customer complaints and effect returns. It is also important to note that manufacturers should consider an industry-built ERP solution to enable the automotive manufacturing sector to trace each individual component or part that makes up a product, whenever and wherever it is in the world. It is clear that traceability is no longer optional for manufacturers, not only from a regulation perspective but as a form of brand protection and reassurance to the customer.

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