Automotive Supply Chain Data Exchange Trends

45 %
55 %
Information about Automotive Supply Chain Data Exchange Trends

Published on January 13, 2009

Author: awilensky



Major Recap Slides of the magnum opus report on automotive industry data interchange policies.

Automotive Data Exchange Economies • Separating Strategy From Technology • Understanding the Industry Dynamics • Spotting Trends • Seeing Business and Competitive Issues Clearly • Understand the Risk / Opportunity • Place Your Bets !

What’s Happening Now? Domestic Automotive Biz Technology Evolution • Punch Cards, Mag tape, • Rough Few Years Mainframe systems, EDI, • Michigan IT all Auto Sectors off avg. 60% IT contracts 2006 Exchanges, VANS, Hubs, Portals….whew! • Auto IT Data Ruin Rate is some portion of 5-9 billion. They want • XML Standards….the it back. Just getting wise. messiah is expected • Supply Chain has diversified • Canons, Live Semantics, since 1950’s – smaller suppliers, electronics, on the wire conversions, regulation, Vehicle EOL issues, and better competition. • Where are the carriers? • It’s Frothy. It’s getting even more interesting. Alt fuels…

Shifting Sands • Largest Supply Partners in Fiscal Free-Fall • Pushing from lean, JIT, to real time. • Small, Medium Biz, are the industry’s saviors • Aforementioned not 100% EDI (historically) • Also, EDI or not, do not have same IT resources for BizProc as giants (fat good it did them).

Shifting Sands (cont.) • Did bad IT practice start the slide? • AIAG says it was prime contributor • IT waste in Supply chain sucked 5B out of industry’s pocket; enough to cover labor margin competition shortfalls between US & Japan • Will the crumbling supply chain, shift to medium/small biz, repeat the crisis?

IT Industry to the Rescue • We ride the white horse – ASP, Internet, XML • From VANs (license to steal), to Hubs, Supply Portals, now ‘XML Super Supply Bus’; IT industry takes costs back out through architecture and innovation. • Even VANs, the evil culprits, are starting to deliver more value, and telcos are on a buying spree to consolidate and streamline • At any moment, the E2E industry can drop pricing by up to 50% and still compete!!! • Microsoft uses ADP !!!!! For HR and Global Logistics

Trends As OEM’s diversify from the major suppliers, two things happen: 1. Need more SMEs, and more data interfaces 2. OEM’s (domestic) become less the total focus of suppliers; still huge, but just a large piece of a diverse puzzle 3. As SME to OEM market transitions to open architectures to enable (WS-SOA) lower cost of interfacing – more opportunities for the medium and little guys enabled through hubs. Why?

Why? • OEM’s, victims of own inertia to change have started initiatives (AMDX, JADM) • Huge Disparity between sponsors and Doers (Big – Small) • Commerce hubs and SOA open mid-tier to the market. Re-use. Become Free of Captive Networks. What took so long. W3C!

Competitive Issues • Supply Chain Sector IT services 1.5B • Smallish pool – stable < 66% use EDI • <1/3 remainder is paper/email/custom/ New Age VAN • Retail OEM to Dealer services sector and aftermarket dominated by ADP/Reynolds 2-4b (how sliced) 85% of total EDI market. • New hosted hubs, ASPs, commerce nets on per use basis….never a better time for the last third of the supply chain to sign up. • New Supplier Hubs all the time – Telco VAN partnerships, Cutting edge IFR systems (Covisint)

It may not be enough to just compete - • VANs can slash KC pricing by 50% and survive, thrive. Traffic growing by 20-30% year. • Offering equivalent services is no incentive • Catering to ‘XML Faithful’, is a marginal biz proposition (Covisint lost 500M, Grand Central Tanked). • These services are core cash flow to end users – none dare mess with that.

Technology Jungle Guide • EDI to XML Religious Wars • Hubs EDIINT • SuperPlatforms • E2E (end to end providers) • B2B Portals for Verticals • Fundamental and Layered • Industry ESB • World Core Component Net • Demand Data Format Translation using Global Semantics – UDEF or CCM IFR

Three Architectures 1. Fundamental XML 2. Utopian AMDX-JADM ESB World CCM Enabled (SuperPlatform) 3. Realist SuperHub for EDIINT and XML Universal Access Three Competitors that Pose Risk: 1. E2E /VANS 2. Supplier Portals 3. Other Telcos on the acquisition warpath

Functionally No matter what path, they all must do certain, minimum things: 1. Provide interface edge to the CLOBS 2. Bear the data to the recipient, format blind using IFR or native data (with a promise) 3. Provide access to SME’s from browsers to mid range IS 4. Provide enough application diversity, to fill holes. Each product philosophy has holes. 5. Without all of the above, plus reliability, economy, and speedy cutover, there is no reason to leave a VAN or E2E

Fundamental XML Network Services • Let’s bust a myth – there is no routing at doc level. WS Address and Routing are NRFPT. No Global System. No back end. No one is home. Rather, anything can be routed at element level – even Flat files via FTP – if you wanted to. Nobody cares. All commerce policy is conducted at ends or in hubs, by databases, and by applications. • Basic services are security, validation, management (policy, monitoring), transformation is the specialty. Leaders are XPATH accelerator geniuses. Lets bust another myth – the XML promise is “canon” – the elimination of need to transform. If you are wasting cycles doing repetitive transforms, then get back to mapping your BODs. Transforms are transient in a utopian XML world. • Validation. Nuff said. If originating CLOB is clueless as to schema, we have a fundamental problem. Databases have been doing this well for years. Validation must be tied to exception handling in enterprise backbone. Native database communications are good at this.

Fundamental XML Services Cont. (XML BOX) • Wiring this to CLOB is as time consuming as any software approach • If there is any hope for this, look to network and datacenter engineers to justify. • Migrating existing services from corp. to carrier requires registry services – hardly well understood. Or, not yet common (there has been some progress). Waiting for ITU, CCITT, IETF • Don’t believe me? The entire industry is tiny, unstable, deployments of record are small, focused, particular, fussy. Hardly a good bet for a Telco to offer a vertical as a services offering • Too low level – to remote from business operational goals, too disconnected from the work of standards and trade bodies; except in focused, rare, crafty handmade deployments (RouteOne DataPower). • Let industry mature one more year – and see who survives as the general server market and SOA get cheaper, faster. It has happened every time and in every instance of hardware coprocessor specialization.

Utopian ESB SuperPlatform • A SuperPlatform contains a well integrated OS, RDB, ODB, WS-Stack, HTTP Services (Web Server Virtualization), and Virtual Database that uses ODBC or native agents to make all connected systems appear as a normalized data model. Some can run Java, .Net, MonoCLR, Ruby, C#, etc. OpenLink has Semantic Extensions. • An ESB is similar, without object store, they make you buy that, and language runtimes are optional. Put them both together, you get mother. XML Powerhouses, XQuery, XSLT. Cape Clear is one such ESB. • ESB’s are much easier to interface to CLOB, they were made to not only replace, but to augment legacy and ERP with SOA.

Utopian ESB SuperPlatform • Why Utopian? Caters to Emerging standards that are actually in use (JADM, STAR) • No EDI (Not precluded, just not ideal). • Bearer encapsulates OAG CCM State and Registers BOD, holds standard XSL, and makes applications work a little less hard, and removes costs by not requiring every mid size system to be failsafe. But wait, there is more! • Much easier for application vendors to get it up. • Likewise for advanced application vendors that have been shut out by the VAN Mafioso, these are XML savvy companies that have been singing the hymn longer than there were believers. Utopian ESB is best way for them to get traction. Need them for comprehensive delivery.

Realist • B2B Hub and Spoke Architecture • An Application server built for commerce with design/runtime features. • Sticks to CLOB and ERP like gum in hair. • Some have software component manufacturing; the ability to split off zero footprint runtimes for special applications • Most have orchestrator for state • All are EDI and XML ready. CCM state I am unsure, but can be extended. • The is the way to get to profits while the XML messiah takes time getting here.

I stole a picture of an ESB !

Bottom Line Risk Opportunity Opportunity: Risk: 1. XML Push is now with Orgs. 1. A Bruised Auto Industry 2. Start before the shine is dull 2. Entrenched Competition on OAG 3. ATT Sterling – need say 3. Partnerships abound more? 4. One good case applicable to 4. Hosted Solutions EDIINT many industries make entry into market trivial 5. One mature service package applicable to other solution 5. E2E can Slash KC costs with resellers and carriers a key stroke 6. Small % of OEM –Retail VAN 6. Innovation Purveyors are 3 revenues = ~1B. years ahead in architecture 7. Model has been proven at 7. EDI may never let go…may Rt. One – in a tiny way. be too…’there’. 8. EDI 95% - XML <2% Now…?

How Get In? • Pry In – Operate and Compete at Value supporting EDI and XML • Will In – ride standards and forward thinking to pull OAGis into vogue. • Buy In – Partner, Acquisition – leverage hard work of other innovators.

Super Future of Demand IFR Via UDEF and Carrier Services 1. Global Semantics via registry – DNS for Data Definitions 2. Global State bearing services / Test, stage & service guarantee 3. SDO standards via ITU – CCITT - IETF

Add a comment

Related presentations

Il 24 Ottobre 2014 si è svolta la Capitale Automobile CARS - #Cap2014Auto , il sum...

Manual diagramas eléctricos del OPEL CORSA 2002 en español. Cortesía de la pagin...

Colorado Springs, CO. Unbeatable Specials during the Phil Long’s l-25 Statewide Ve...

Colorado Springs, CO - Get ready for Hyundai MONSTER DEALS in Colorado Springs fro...

Related pages

Trends in the Automotive Industry Implications on Supply ...

Strong fluctuations in exchange and interest rates pose ... Trends in the Automotive ... eight major trends affecting the automotive supply chain.
Read more

Future of Manufacturing - key trends including logistics ...

... Future Trends including logistics / supply chain; ... Eurozone, exchange rates, ... Future of the Automotive Industry (Auto Trends)
Read more

The Automotive Industry - EDI Basics

EDI has been in use across the automotive industry ... automotive supply chain and a ... allowing the automotive companies to exchange ...
Read more

New Trends in B2B Integration, Secure File Transfer & SAP ...

Data Exchange with Automotive ... and approaches to B2B integration, secure file transfer and SAP best practices ... supply chain professionals. ...
Read more

Interoperability Cost Analysis of the U.S. Automotive ...

the U.S. Automotive Supply Chain ... automotive supply chain have accompanied these trends toward ... the data exchange standard in the automotive and ...
Read more

Automotive Supply Chain Management | Capgemini Czech Republic

Efficient supply chain management helps forward-thinking automotive companies reduce their costs. ... Insights & Data. ... Automotive Supply Chain Management.
Read more

B2B Integration: Business Value and Adoption Trends

Business Value and Adoption Trends ... a different view on how it chooses to exchange data based upon ... About the Stanford Global Supply Chain ...
Read more

Automotive Supply Chain Management | Article

Efficient supply chain management helps forward-thinking automotive companies reduce their costs. ... Insights & Data. ... Automotive Supply Chain Management.
Read more