Automotive Business Gets a Tune-Up

March 31, 2011 by Daniel Hardt & Ralf Weinmann

TRADEsprint – leading ERP software for the automotive parts industry (image: Fotolia)

TRADEsprint – leading ERP software for the automotive parts industry (image: Fotolia)

When the time came for Lorch, a Bosch contract wholesaler, to move to different business software, CEO Axel-Christof Schmid-Lorch had his concerns: Wouldn’t an SAP-based solution be too complex, the necessary licenses and consulting too expensive? Luckily, SAP partner cormeta ag – itself a midsize business – was there to put these worries to rest.

Lorch ultimately opted for a version of TRADEsprint that cormeta has tailored to the automotive parts industry. With SAP Business All-in-One at its foundation, this integrated ERP solution comes preconfigured to handle 80% of all common processes. The corresponding implementation project required a total of eight months.

In its very first year with TRADEsprint, Lorch saw a 35% reduction in data processing costs, and IT integration at new locations went off without a hitch. The company upgraded its TRADEsprint solution some two years ago.

A new sales and workshop cockpit

One of the latest advancements within TRADEsprint is a new sales and workshop cockpit that cormeta unveiled at this year’s REIFEN convention.

This cockpit combines all of the key processes involved in selling automotive parts –assembly management and invoicing, store sales, scheduled maintenance management, warehouse and store inventory management, and point-of-sale accounting, as well as automatic handovers to financial accounting systems – in an interface that enables users to add and remove fields to suit their specific needs. It also covers online inquiries directed to the makers of TecCom, a B2B platform for the European market for spare automotive parts, during document creation.

The main benefit for employees is the ability to work with a uniform system. At Lorch headquarters and stores, employees no longer have to switch between various applications.

Next page: Expansion, factoring in personnel costs

The new sales cockpit (screenshot: cormeta ag)

The new sales cockpit (screenshot: cormeta ag)

CEO Axel-Christof Schmid-Lorch (photo: cormeta ag)

CEO Axel-Christof Schmid-Lorch (photo: cormeta ag)

Geared for expansion

TRADEsprint’s intuitive user interface enables new employees to get their bearings quickly and with minimal training. CEO Schmid-Lorch sees this is an important aspect of the solution, particularly when it comes to integrating the IT infrastructures of newly opened branches.
Lorch has expanded significantly since implementing its new solution, making seven acquisitions in the process – including a major takeover in Switzerland. And TRADEsprint has grown alongside the company.

The ERP software also accounts for country-specific characteristics, such as the customs regulations and tradition in Switzerland of rounding prices off to the nearest five cents. “Whether stipulated by law or particular to our company, new requirements are relatively easy to meet. We don’t have to start from scratch,” Schmid-Lorch says. With 16 locations in southern Germany and neighboring areas, Lorch is one of the leading dealers in its segment.

Cost factors: Personnel and logistics

“Since staff and logistics present the biggest cost factors in our industry, they’re the main focus when you start optimizing processes,” Schmid-Lorch explains. This is why he considers end-to-end processes and economical resource management further essential advantages of integrated SAP software.

Lorch can now realize potential savings thanks to TRADEsprint and functions such as automated time- and region-based delivery control, which the company plans to implement soon.
The establishment of a detailed recall transaction has also helped Lorch reduce its expenses by improving its overview of customer returns. For example, the company can now determine whether a return came from its own stock or from a vendor’s order and whether the reason for the return involves product defects or incorrect delivery.

Next page: Online sales, tips for small businesses and midsize companies

Picking at Ernst Lorch KG (photo: cormeta ag)

Picking at Ernst Lorch KG (photo: cormeta ag)

The headquarters of Ernst Lorch KG (photo: cormeta ag)

The headquarters of Ernst Lorch KG (photo: cormeta ag)

Online business accounts for 40% of sales

Lorch has also optimized its ordering process, enabling the material requirements planners to access the TecCom platform directly from the sales cockpit. Rather than switching to a Web browser, employees can now place orders in the SAP system, which automatically forwards the orders to the correct vendors. The planners receive digital order confirmations through the platform.

According to Schmid-Lorch, the new system also supports the company’s online business, which has proven to be a competitive sales channel. Lorch now generates 40% of its overall sales through the Internet – quite a jump from the 10% the company registered just five years ago.

Lorch’s short-term plans include opening a new online shop. “An integrated ERP system like TRADEsprint makes processes more efficient, which gives us back resources we can use for our core business and expansions into new fields of business,” says Max Knobel, the company’s sales director. That’s an advantage growing businesses can’t afford to pass up.

Tips for small businesses and midsize companies

Schmid-Lorch advises smaller-scale companies in the industry to take an incremental approach to their ERP projects. Rather than implementing all of their ideas all at once, companies should start with areas essential to efficiency and then proceed step-by-step. Schmid-Lorch also recommends adhering to the out-of-the-box functions that software provides, especially when a company is expanding and constantly dealing with new guidelines. “Solutions based on a common market standard like SAP offer better compliance and expansibility than applications from niche providers,” he says. Schmid-Lorch does concede, however, that there will always be areas – the workshop, for instance – in which specialized programs can provide better process coverage.

Nevertheless, it cannot be denied that all areas of a company – from sales to accounting – benefit from the integrated data storage that ERP solutions provide. Schmid-Lorch’s summary is accordingly clear: “Have we ever regretted our decision to go with a solution based on an established software standard? Not for a second.”

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