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Chuck Fenton Principal Research Engineer

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Presentation on theme: "Chuck Fenton Principal Research Engineer"— Presentation transcript:

1 Chuck Fenton Principal Research Engineer
Collaboration Sophistication and the American Automotive Supply Chain Migration to ebXML Messaging Chuck Fenton Principal Research Engineer

2 Overview Background on the U.S. automotive supply chain
History of electronic commerce in the automotive supply chain Migration issues and direction 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

3 Background U.S. Domestic Economy
Motor vehicles and equipment account for about 9 percent of the total manufactured goods (U.S. Department of Commerce, 1998) About 4 percent of manufacturing employment (U.S. Department of Commerce, 1998) About 5 percent of personal consumption was spent of motor vehicles and parts; greater than $250,000 million (BEA, 1998) Major end user of key materials such as alloy steel, aluminum, and synthetic rubber creates derived demand (Womack, 1998) Source: Interoperability Cost Analysis of the U.S. Automotive Supply Chain, Smita B. Brunnermeier, Sheila A. Martin, Research Triangle Institute, March 1999 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

4 Background Manufacturing Supply Chain Tiers
Original Equipment Manufacturers “Big Three” (Daimler Chrysler, Ford, GM) First Tier hundreds of companies some large, some small Infrastructure Suppliers Subtier thousands of companies mostly small Source: Interoperability Cost Analysis of the U.S. Automotive Supply Chain, Smita B. Brunnermeier, Sheila A. Martin, Research Triangle Institute, March 1999 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

5 Background Automotive Industry Action Group (AIAG)
The Automotive Industry Action Group is a globally recognized organization founded in 1982 by a group of visionary managers from DaimlerChrysler, Ford Motor Company, and General Motors. The purpose: To provide an open forum where members cooperate in developing and promoting solutions that enhance the prosperity of the automotive industry. AIAG's focus is to continuously improve business processes and practices involving trading partners throughout the supply chain. Source: About AIAG, 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

6 History AIAG Electronic Commerce Highlights
Formed as a committee under American Production and Inventory Control Society (APICS) 1981 – Communications Project Team formed to develop guidelines for data communications and telecommunications techniques at all levels of supply within the automotive pipeline 1982 – May 5, AIAG Incorporation 1984 – Moves to ASCI X12 1989 – First standards body to print position paper supporting EDIFACT 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

7 History AIAG Electronic Commerce Highlights
1995 – Telecommunications Project Team is created to develop the Automotive Network eXchange (ANX) 1996 – AIAG and ‘Big Three’ collaborate on a common set of EDI requirements, business process narratives, and training for suppliers 1998 – E5 1.0, Guideline for Electronic Commerce Message Routing On TCP/IP Networks 2000 – E5 2000, Guideline for Electronic Commerce Message Routing 2000 – Announces support of ebXML initiative Source: AIAG History Highlights, 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

8 Automotive Supply Chain Tier – Present Status
Migration Service File Collaboration Sophistication Message Yesterday Today Tomorrow Lower Middle Upper Automotive Supply Chain Tier – Present Status Adoption Migration E5v2 Bisync FTP SMTP E5v1 ebXML Collaborative Framework ebXML Message Service 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

9 Automotive Supply Chain Tier – Present Status
Migration Migration occurs over time and tier Collaboration sophistication increases with time Upper tiers can move lower tiers to greater sophistication only as fast as aggregate costs for migration can be consumed Service File Collaboration Sophistication Message Yesterday Today Tomorrow Lower Middle Upper Automotive Supply Chain Tier – Present Status Adoption Migration E5v2 Bisync FTP SMTP E5v1 ebXML Collaborative Framework ebXML Message Service 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

10 Automotive Supply Chain Tier – Present Status
Migration Historically, cost for sophistication decreases over time; more comes free with what ever you are buying Waiting for low cost solutions may mean lost opportunity Service File Collaboration Sophistication Message Yesterday Today Tomorrow Lower Middle Upper Automotive Supply Chain Tier – Present Status Adoption Migration E5v2 Bisync FTP SMTP E5v1 ebXML Collaborative Framework ebXML Message Service 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

11 Automotive Supply Chain Tier – Present Status
Issues Increasing sophistication can increase complexity, which drags time to cost reduction because of increased implementation cost Return on investment is hard to justify against existing long lived working solutions; legacy solutions inhibit migration to new solutions Service File Collaboration Sophistication Message Yesterday Today Tomorrow Lower Middle Upper Automotive Supply Chain Tier – Present Status Adoption Migration E5v2 Bisync FTP SMTP E5v1 ebXML Collaborative Framework ebXML Message Service 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

12 Automotive Supply Chain Tier – Present Status
Issues The promise of ebXML was for small and medium organizations: the lower tiers of the automotive supply chain ebXML: Needs to support ‘transient channels’, ie IP dialup, where there is transient connection at one end Service File Collaboration Sophistication Message Yesterday Today Tomorrow Lower Middle Upper Automotive Supply Chain Tier – Present Status Adoption Migration E5v2 Bisync FTP SMTP E5v1 ebXML Collaborative Framework ebXML Message Service 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

13 Direction Adoption and Initiatives Proposal
The going forward solution announced by Covisint Automotive Manufacturing Data Exchange (AMDX) Forth coming announcements by AIAG and Original Equipment Manufacturers It will take time – tactical implementation of pieces of the ebXML framework to achieve a long term strategic solution Proposal AIAG Message Routing Work Group has proposed Transient Channel be considered as an addition to CPP/CPA to address requirements for ‘dial up’ 8/21/ Copyright 2002 Sterling Commerce, Inc. All rights reserved.

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