A New ANX For Everyone

Automotive Industries,  Feb, 2000  by Gail Kachadourian

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Finally, a lower cost connection gives sub-tier suppliers access to the industry's online purchasing network.

Until now, the Automotive Network eXchange (ANX) subscriber base has been limited to mostly automakers and Tier I suppliers, mainly because the costs involved have been too high for the sub-tier suppliers. This exclusivity is about to change.

A new, more economical option geared toward bringing in the Tier 2 through Tier 4 suppliers is being introduced this month. It's a dial-up connection to the ANX that provides a lower bandwidth at a lower price. According to Tracy Trent, senior vice president of e-business solutions for the La Jolla, Calif.-based Science Applications in Commission (SAIC), the move will help reduce cycle times by increasing the efficiency of transferring OEM project information down the supply chain. Founded in 1969, the SAIC is a technology research and engineering company that specializes in technology development and analysis, computer system development and integration, technical support services and computer hardware and software products.

Other e-commerce experts agree. "The concern for smaller companies has been traditionally associated with needing lower bandwidth and lower cost, and that is exactly what this represents," says Peter Rosamilia, SAIC vice president. "Thirty thousand Tier 2, 3 and 4 trading partners have been targeted, and the expectation would be that hundreds of dial-up subscriptions would be granted over the next six months."

The ANX subscriber base is preparing to increase at the same time that General Motors and Ford launch their own online purchasing networks, TradeXchange and AutoXchange, respectively. Those networks join DaimlerChrysler's e-commerce extranet system, the Supplier Partner Information Network. OEMs requiring their suppliers to do business with them on these systems means increased traffic on the e-commerce highway. However, while GM, Ford and DaimlerChrysler are registered ANX users, they are not yet ready to threaten suppliers with a use-it-or-else mandate. All three OEMs are still accepting transactions across the World Wide Web.

According to Mark Duhaime, acting chief technical officer of B2B (business-to-business) for Ford, larger suppliers that account for the majority of Ford's orders are using the ANX because it is cost-effective for them.

"The smaller suppliers are not doing the same type of volume business, and it is not smart for them to use the ANX right now," he says.

"The goal is 100 percent participation with the people who need to use it. ANX is a sledgehammer on the nail for some situations, and the key tool in your toolbox on others."

In addition, Trent says the upcoming possibility of two non-automotive industries signing up to use the ANX will assist further in lowering usage costs for the entire automotive industry.

As the industry increases its online business, Trent and Rosamilia say they are working toward widening the ANX's capabilities in the very near future. Their ultimate goal is for the ANX to become the preferred medium for the majority of industry-wide communication, including videoconferencing, voice over IP (VOIP), and other streaming services, including audio streaming and real-time collaborative design applications.

"We see a role of the ANX to enable the more sophisticated functions of the exchange," Duhaime explains. "The next release is to go into real supply chain management and product development."

RELATED ARTICLE: ANX: The Procurement Channel

Launched in November 1998 by the Southfield, Mich.-based Automotive Industry Action Group (AIAG), the ANX is an ultra-fast, high-security network that facilitates electronic communication for OEMs and suppliers. An alternative to using the World Wide Web, the ANX uses passwords, encryption and firewalls to ensure the security of sensitive information.

Managed by the SAIC, the ANX is primarily used for the electronic transfer of procurement information to its subscriber base of 310, with 210 additional companies currently in the subscription process.

For OEMs, the ANX provides a secure network for tracking suppliers' quality and price, and sharing confidential CAD files. For suppliers, it is a fast, easy way to be among the first to know when an OEM or supplier posts a bid request. The ANX then enables open lines of electronic communication between project partners. In addition, with ANX comes a dedicated management team that guarantees the secure and timely delivery of information.

--GK

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