What's new in automotive supply chains? Although technology is an enabler, better business practices are resulting in better supply chains these days. Here's a look

Automotive Design & Production, Feb, 2004 by Lawrence S. Gould

Creating commonality is at the core of what automotive companies and the SCM "solution providers" (i.e., software vendors and trade exchanges) are clamoring about. These supply chain participants incur unnecessary costs maintaining multiple products that add no extra functionality to the job at hand, which is to access, view, exchange, and use data. For example, a Tier 2 supplier typically uses several supply chain visibility products when communicating with its multiple Tier 1 customers. Because these suppliers often can't afford customizing every software product or integrating it to their back-end systems, the suppliers often buy multiple software products--just like individual suppliers investing in multiple computer-aided design products depending on the electronic design standards imposed by their customers. In addition to the cost incurred, the suppliers have to manually reenter data into each visibility product.

The IV & I Project will establish one set of data exchange standards for the supply chain and its users, including the vendors providing SCM software, the trade exchanges, and even those enterprises writing their own SCM software in-house. This standard eliminates all the additional costs in multiple (and redundant) software investments, including ongoing maintenance, change control, training, employee education, and the actual time to operate the various systems. The goal is to let trading partners use the visibility software product of their choice for all of their customers. This data exchange is more than just displaying a webpage on the Internet. "We are actually going to pass data that is machine readable, that can automatically be integrated into back-end systems, and that can be used without human intervention," explains Snack.

The IV & I Project recognizes the needs of low-end suppliers. These suppliers typically only want to look at data on the web because it's much easier for them, requires little capital investment, and their operations require little externally supplied data. In this case, the IV & I Project establishes a standard so that these suppliers can "rip and read" data as required.

To date, several software vendors have incorporated the IV & I format into their software, which is now being tested at NIST. This test bed, says Snack, will enable the IV & I teams to "debug and strengthen the solution set before releasing it for industry use." Vendors (and internal software development groups) need not fear their product differentiation/competitive advantage will go away because of the IV & I standards. Software will still be differentiated by how the software vendor presents data to end users, provides data interoperability (particularly with back-end enterprise systems, such as enterprise resource planning), and responds to user needs (ease of use, cost, maintenance, revisions, and the like). "It comes down to the same old things: cost, quality, delivery, and service," comments Snack.

AIAC members can get the IV & I business object documents free. Non-members will have to pay a fee; however, because the AIAG is using Open Application Group Inc. (OAGI) as its repository, AIAG documents are freely downloadable from http://www.openapplications.org.