Indian auto industry is gaining significance on the global footprint; even they started to export few products to OEM. Adoption of global best practices, ensuring the quality and manage the effective supply chain need to be taken care by auto Industries. The auto components industry is highly dependent on the OEMs. This leads to pressure from the OEMs for implementation of standards in terms of quality and delivery reliability which impacts the investments in this sector.
Also as per the Resolution GSR 207 (E) and Notification MoRTH resolution, F. No. H-25011/4/2011-P&P (Toll) Vol. II. dated 28th September 2011, all automotive companies using RFID tags for automotive e-toll collections. Since the technology is in use can have multiple other option to utilize.
There are three challenges faced by the auto industry that can be addressed using RFID technology.
Just-In-Time (JIT) Implementation
Existing RFID products in the market cover three major processes that impact automobile supply chains and can possibly address the challenges mentioned above.
- Outbound and Inbound logistics can be automated, where sub processes such as generating serial numbers, commissioning and associating RFID tags with components, tracking shipments, automatically triggered advanced shipment notices can be handled by the RFID solution.
- Track and Trace Process can be used to authenticate genuine parts in the supply chain and this reduces product recall liability.
- Kanban Process, which has traditionally been a manual process, gets automated using RFID. It eases JIT implementation for parts manufacturers as well as OEMs.
Increasing Insurance Premium to Cover Product Recall Liability
Globally product recalls have stretched OEM reputation as well as financials. One of the main reasons for such inflated numbers is that OEMs lack the ability to track the major components that go in making a vehicle on a per vehicle basis and thus, they are forced to recall entire product lots instead of only the faulty products.