Significance of TQM in price sensitive automotive industry


Automotive sector has been dynamic in inventing new manufacturing strategies owning to prevailing high level of competition. With this scenario the challenges faced by Original Equipment Manufacturers (OEM) have also multiplied over the years.

Customers are demanding individualized final products. This is especially true of the OEM. While the organizations will have some standard base products, the total number of options that they have to offer to the consumers should be plenty. ERP will allow management of these configurations.

Through the supply chain there is need for innovation and new product development with much reduced life cycle for development. Hence, the NPI (New Product Introduction) will greatly help in promoting concurrent engineering.

Automotive industry is characterized by the presence of dedicated customer-supplier relationships and the competition in the market is between supply chains and not individual organizations. Hence, supply chain efficiency is thus very important. The principles of Just-in-Time (JIT), Lean Manufacturing and others become very important here. ERP will help in promoting these concepts.

Another challenge faced by automotive industry is the pressure to reduce delivery time and cost. A comprehensive supply chain solution that crosses the organization boundaries (B2B) is required. Different elements of the supply chain interact very closely.

Quality Management module with support for advanced features like TQM will help to promote quality at source. This receives significance owing to the continuous pressure exerted to cut cost and improve quality.

As the automotive market is extremely price sensitive, the features of comprehensive costing and kaizen costing will be of special relevance here. Understanding the accurate cost of manufacturing and identifying all potential areas for reduction of costs is one of the keys to success.