End-to-end integration vital in auto industry: KPMG

Chennai, Dec 12: End-to-end integration is the most important supply chain management challenge in the Indian automotive sector, according to a study conducted by the KPMG.

KPMG, the global network of professional services firms of KPMG International, undertook the study to analyse the key challenges being faced by different sections of the Indian auto industry. The findings were released in the form of a report at 'Auto SCM India 2006' being organised here by the Confederation of Indian Industry (CII).

The report attempted to identify areas that needed significant attention and tried to identify trends and opportunities for stakeholders in the auto segment.

The key strategy in achieving the integration of auto supply chain would be aligned towards process improvements and increased investments in information technology, the study said.

Commenting on the report findings, KPMG National Industry Director (Industrial Markets) Yezdi Nagporewalla said that ''with global supply chain becoming more and more critical for Indian automotive players, the majority of the players are likely to set up their own operations in other countries in the next five to ten years.'' According to the findings, exports would be the focus area for Original Equipment Manufacturers (OEMs) with nearly 25 per cent of the respondents expecting more than 40 per cent of their revenues from exports in next five years.

Costs, quality and timely delivery continued to be key areas of concern for players due to increasing competition and pressure on margins.

Nearly 77 per cent of OEMs and tier-1 suppliers had already outsourced their inbound logistics activities.

Presently, Gulf countries, Europe and North America were the key markets where India players were looking to export. As per the respondents, the potential markets for future, include Asia Pacific and Japan, the study added.

UNI