Story by:
Ashish Bhatia
A provider of flexible, cloud-based enterprise software and services for manufacturing companies the world over, QAD Inc., is looking at tapping business from Indian automotive companies. CV manufacturers especially. Founded in 1979, the company has embarked on an expansion plan in India. In what is claimed to be a strategic move, the expansion activity involves the addition of a new floor to its existing office premise. This would help the company to not only increase its reach in the Indian market, but also seek business from CV Original Equipment Manufacturers (OEMs). Averred Pamela Lopker, Founder & President, QAD Inc., “As part of a larger plan to expand and focus on Indian automotive companies QAD cloud looks at CVs.” “The QAD ERP solution, she claimed, is in use by 93 out of the 100 top-selling automakers in the world, and could prove to be the game changer for Indian CV makers as well.” Said to be a dominant player in the automotive space, the company is looking at a larger share of business from Indian auto OEMs and suppliers.
Impressed by the performance of the Indian ancillaries which according to a report by the India Brand Equity Foundation (IBEF), that the auto components industry expanded by 18.3 per cent to reach an estimated valuation of USD 51.2 billion in FY2017-18, QAD, expressed Lopker, is buoyed by the inherent market demand and rapid infrastructure developments. She drew attention to the Automotive Component Manufacturers Association of India (ACMA), outlook, which anticipates an industry turnover of USD 100 billion by 2020 backed by strong exports ranging between USD 80 and USD 100 billion by 2026. Accounting for 2.3 per cent of India’s Gross Domestic Product (GDP), the Indian ancillaries employ an estimated 1.5 million people, directly and indirectly.
Confident of India becoming one of the world’s most important automotive manufacturing hubs; Lopker mentioned that QAD in India is keen to support the industry in the best possible manner. “QAD India has provided solutions and services to India and the Asia Pacific region for many years. Growth in these places reflects on our ability to expand and serve existing and new customers. Our CV customers especially,” she stated. Claimed to offer an award-winning ERP solution, QAD, is chalking out a strong game plan for the CV space. Providing enterprise software and services for global manufacturing companies in the life sciences, consumer products, food and beverage, high technology and industrial manufacturing space apart from automotive.
The ‘QAD Cloud ERP Automotive Edition’ to the CV industry is claimed to have been designed such that it includes an integral supply chain management. The cloud-based ERP software is aligned to industry best practices, and supports the evolving needs of commercial vehicle ancillaries especially. Explained Lopker, “Our solution will help CV suppliers to effectively manage customer requirements. Incorporating QAD analytics, which would enable CV manufacturers across the globe to monitor costs, reduce risks and enhance performance, Lopker explained, “The QAD Cloud ERP includes Channel Islands User Experience (UX), and is enabled by the QAD Enterprise Platform. This reduces the need for customisation.” QAD customers can boast of an ability to adapt quickly. They can convert disruption into a competitive advantage. “The QAD’s non-intrusive extensions and new applications can be written by customers and partners without creating rigidity in the system,” said Lopker.
With many disruptions and customer requirement changes coming the way of CV manufacturers, QAD is looking at playing a vital role, assisting them to re-engineer their processes and ways of working. According to Lopker, QAD is offering products to Anything as a Service (XaaS), QAD according to Lopker, see’s a potential in demand for products that meet the unique demands of each customer. These span across ‘make to order’ and ‘at scale’. They help tackle digital transformation of manufacturing through new technologies like data lakes, machine learning and artificial intelligence. A recent upgrade for example has QAD extending the capability of its Channel Islands UX and the underlying QAD Enterprise Platform. Looking at expanding customers throughout its solutions. It is expected to enable customers to personalise their experience and extend the capabilities of QAD Cloud ERP with little to no coding required. The company enhanced a wide number of its offerings, including the QAD CEBOS Quality Management System (QMS) and QAD Automation Solutions (AS).
Winning many awards including the Frost & Sullivan 2018 North American ERP for ‘Automotive Customer Value Leadership award for its QAD Enterprise platform. QAD has come to enjoy a USD 100 million recurring cloud revenue. It is not dabbling in the cloud any more. As a result of the constant recurring revenue source from its cloud offerings, the company has achieved the status of a ‘Cloud Company’, with a billion dollar valuation.
Q. Tell us about QADs’ presence in India, and about the expansion plans?
It’s been over 20 years since I visited India (in 1997). Back then the office was very small with just two to three employees. We today have expanded to an employee strength of 234. We have primarily been involved in supporting our global customers in India. Many of these are automotive OEMs. There are also customers from other industries like consumer packaged goods, life sciences and electronic companies, about 34 per cent of business comes from automotive suppliers. QAD is known for its solutions that help excel. We enjoy a dominant position in the automotive supplier business. For the next year (FY2019-20), we are looking at a considerable expansion. We want to focus on global companies but expand further by working with Indian companies.
What about global trade wars and protectionism?
Starting 20 years ago, the border started opening up. The European Union (EU) opened up; China opened up. The North American Free Trade Agreement was very open for trade not just between Mexico and Canada but for the trade with China, India and other markets of the world. There has been some backlash. Not just the US, the UK, but even Germany, India, China and Brazil have started to feel the need to close their borders and seek local products to help expand the economy. I think that’s only reasonable given the extent of globalisation. This will last a few years and will come back to a neutral point in my opinion. In a way it’s great because it has spurred a lot of local growth everywhere. So you will see a lot of countries imposing taxes. There will be lack of taxes too. For example, car manufacturing will see certain per centage of the components being built locally. Localisation will generate a tremendous amount of excitement by opening up the job market.
How is QAD adapting in such a scenario?
We have focused on our cloud growth and are closing on a USD 100 million recurring revenue. We have been growing at 30 per cent plus. We are providing a world-class capability over the cloud.
How would cloud ERP help?
Not only will cloud ERP play a role in prototyping, it will also aid in manufacturing of certain components. Automation in manufacturing will also mean very few people on the shop floor exist. Robotics will take over starting off with the 3D printer for instance.
How does the Indian automobile industry compare?
India in the automotive space is emerging. I think it’s doing well at 10-18 per cent a year. However, if you go back in time 10 years ago, the hubs for automotive were traditionally the US, Germany, Japan and China. While India is joining the list it is yet to attain a similar level. But it is growing and that’s important.
What is unique about the QAD ERP offering?
It was in 1993 that we decided to focus on the automotive industry. We took an opportunity to learn a lot through lean manufacturing; through Japan. We had a few very good automotive suppliers that helped us to learn a lot. Be it lean manufacturing, supply chain management or Electronic Data Interchange (EDI), we could take to every industry. In order to compete, there was a need for a lot of retooling in the automotive space. We saw an opportunity. We began with Johnson Controls initially in the US who later spun the business off to Adient. That was a very successful partnership and the one that got us started in the ERP space. From thereon we were able to gather traction with automotive part suppliers. We are working today with all them. We are setting the standards for the future. We are involved in writing and teaching the standards to automotive suppliers.
How does a QAD solution work on a shop floor?
The MMOG\LE standards are the global standards for supply chain management processes that provide industry best practices. They specify both quality and lean capabilities. As part of the consortium that wrote these standards, we engineered ways to improve manufacturing. For example, an OEM only sends the order through EDI and many companies may still print that order and enter it into their system. As someone who is looking to be a good automotive supplier that’s a practice which is strictly forbidden. You need to have it integrated with your ERP system which in turn will help eliminate mistakes and reduce the time taken. At the shop floor, everything either needs to be barcoded or has to be integrated with the machine especially in case of large quantities. If a supplier is using manual ways then there is a room for error or for quality issues to creep in. It is quintessential that everything is connected as a result. The need is to move to a pool production rather than order production in order to better respond to the orders coming in.
As easy you make it sound, what about tackling manufacturing?
I think that’s the beauty of our product. It is an end-to-end integrated solution It has well documented practices that are flow-charted and built in. We have actually been called by companies like Ford and GM to turn around a supplier that’s not doing well. We have been able to do that within a six-week period.
QAD Adaptive Applications
Introducing QAD Adaptive Applications and QAD Adaptive ERP to help manufacturers respond to change quickly, QAD, according to Anton Chilton, the Chief Executive Officer at QAD, Adaptive Applications his company offers are a greater fit for today. The software suite features an Adaptive User Experience (UX) and is built on the QAD Enterprise Platform. All needs of the manufacturer including supplier relationship management, e-invoicing, EDI, trade management, supply chain planning, demand planning, transportation execution or other enterprise solutions are met. Rebranding its three divisions, each of which supplies solutions in the Adaptive Applications portfolio, QAD has renamed its Precision Software as QAD Precision. The global trade management and transportation execution software. DynaSys, has been renamed as QAD DynaSys. CEBOS, which produces enterprise quality and compliance management solutions, has been renamed QAD CEBOS. The company, according to Chilton is exploring emerging technologies in the realm of machine learning, data lakes and digital twins.
