e-business initiatives by manufacturers and Tier 1 suppliers could become a ‘nightmare’ unless better data links are established further down the supply chain, according to European automotive industry body Odette.
In a bid to avoid this, Odette — the European industry’s electronic data and logistics standards organisation — hopes to create a ‘virtual map’ of the supply chain and promote common data communications throughout.
John Canvin, Odette’s international general manager, said that without better data flow, online marketplaces and other e-business initiatives that were launched by the industry’s major players risked falling short of their goals.
‘To obtain information from top to bottom of the supply chain — including the logistics companies in the middle — could currently take 50 or 60 days,’ said Canvin.
‘From OEM to Tier 1 is not such a problem, but by the time you get as far as Tiers 3 to 4 and beyond there are all sorts of processes being used.’
Canvin said Odette aimed to map the hugely complex network of information passing every day between the thousands of companies in the European industry.
‘We need to see who is talking to who, and how,’ said Canvin. ‘Once we can identify all the flows of data from order to delivery we will be able to see where it needs speeding up.’
He added: ‘Some of it may be working perfectly well, but there will be other areas where improvements can be made.’
Once the ‘virtual map’ is complete, Odette plans to look at how a range of new technologies could be used along the supply chain, such as XML or web-based EDI.
The organisation said it was taking a strictly supplier-neutral approach, with no axe to grind for any particular technology or service provider.
Odette is working with similar organisations outside Europe, including its US equivalent, to make sure the project reflects the automotive industry’s global nature. Canvin warned the advent of major e-business initiatives could cause considerable pain for companies further down the supply chain if sufficient uniformity is not in place.
‘If everyone is doing their own thing, the whole process will be a complete mess. Without adequate standards in place it will be a nightmare, especially for the suppliers,’ said Canvin. He compared the arrival of web-based technologies with the widespread introduction of EDI to the industry in the 1980s.
‘There was a mass of different systems in use, and some reluctance by people to change the way they did things because they thought they might lose some competitive advantage,’ said Canvin.
‘They soon realised that it wasn’t a ‘them and us’ situation but a genuine opportunity.’