The global nature of the Automotive
Industry encourages a common approach to the EDI message standards in use, and
consequently the adoption of a globally accepted message standard – EDIFACT. When
exploited to its full potential, EDIFACT can facilitate new methods of conducting
business, from Just-In-Time (JIT) in the production chain to the payment of suppliers. A
comprehensive strategy should define a company’s ambitions. These ambitions should
line up with those of the Automotive Industry from every viewpoint – from application and
technical requirements to trading partners and timescales. What is required is a strategy
for advanced communications that recognizes EDIFACT, to ensure the company’s software
is ready for the changes that are inevitable within the Industry.
The fact that global Supply Chains promote
the need for a common EDI standard is now recognized by the Industry and is supported by
the majority of OEMs. As each new vehicle model is introduced, the OEM is given a chance
to upgrade the Supply Chain with new processes. This reengineering approach will
ultimately reveal the need for some form of EDI message that will bring efficiency to the
process both in terms of handling increased volumes of data with accuracy, and processing
the required transactions quickly. In addition, each component supplier will be supplying
many different OEMs in different countries. Through the provision of a consistent format
for EDI and the identification of the business cases surrounding its use, the OEM’s
strategy for reducing costs and the time compression of processes is facilitated.
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There are clear advantages to the adoption
of a common EDI standard. Successful implementation will, however, require careful
planning, especially if automotive suppliers are to maximize the benefits available to
them. The power of the OEMs to force suppliers to use EDI can lead to its parochial
adoption. Unfortunately, this misses out on the opportunities to raise business
performance substantially. As part of an overall strategy for IT, EDI should be
implemented and used to introduce new and improved methods of working.
The migration to EDIFACT is not to be taken
lightly and there is a cost involved. Suppliers will need to change their systems, or buy
a new system to receive the data, and then integrate the data into the system. This
mapping process will need to be undertaken if the EDIFACT standard is to be successful.
Users of the North American standard, X12, will have significantly more differences to
overcome than their European counterparts. For users of the Odette message standard the
implementation of EDIFACT will be more straightforward. The Automotive Industry has
established message implementation guidelines and concepts that should assist in reducing
implementation worries. These include recommendations for the construction of messages
based on recognized business situations.
This is a summary of a White Paper on
EDIFACT, produced by JBA. To receive
your free copy, click here.
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