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I would like to generate the product SKU automatically for every product created in admin panel.

I have found this extension which works to generate the SKU based on product name and it's category, but I would like to change it in such a way where the firs 4 characters of the SKU are it's manufacturer name.

Can anyone help?

--> https://github.com/vijays91/Magento-Auto-SKU-Generator.git

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I assume you modify the code based on that module, place the following codes after line 18 $new_sku = ""; in app/code/local/Learn/Autosku/Model/Observer.php:

$manufacturer_name = $product->getAttributeText('manufacturer');
if ($manufacturer_name.length > 0)
    $new_sku .= substr($manufacturer_name, 0, 4);

P.S: Depends on your requirement, if you don't wont to keep category name, comment out line 19-25

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