Auto industry group to upgrade supply chain with XML

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May 13, 2003 (Computerworld) -- Auto industry e-services exchange Covisint has launched an IT consortium that aims to replace existing Electronic Data Interchange (EDI) messaging with more flexible -- and less costly -- XML systems.
In an announcement yesterday, Southfield, Mich.-based Covisint said the industry consortium includes automakers DaimlerChrysler AG, Ford Motor Co. and General Motors Corp., and parts and technology vendors Johnson Controls Inc., Lear Corp. and Delphi Corp.
Covisint spokesman Paul Manns said the group is being launched to help find cheaper and more efficient ways for automakers to communicate directly with vendors about parts availability, engineering concerns and other issues. For years, the auto industry has relied on complex and antiquated EDI technologies for intercompany communications, he said, which companies have been hesitant to abandon because of past investments.
The new system, which the consortium hopes to have in place by the end of the year, will use XML and a combination of off-the-shelf products and custom coding, Manns said. "It's a well-recognized problem," he said of the aging EDI infrastructure. "It's a tremendous headache in the industry" in terms of controlling costs and keeping in touch.
The expected savings from the new XML-based system ranges between 30% and 50%, he said.
As the consortium works to develop the new system, other Covisint members, including other automakers and a myriad of parts and equipment vendors, will be invited to use the new technologies. "We really believe that when companies see the flexibility and ease-of-use of the system ... and the powerful XML capabilities" that they'll also join the effort, Manns said.
The XML system will have another benefit, according to the group, because it will enable smaller companies that can't afford or use EDI now to connect to customers and suppliers.
The new system will also allow Covisint customers to send and receive electronic data to applications behind each other's firewalls, as well as to Covisint applications. It will support the latest Internet-based protocols, XML standard messages and will be compatible with the millions of EDI messages exchanged daily in the automotive business.
The specifications for the project are being developed in cooperation with the Automotive Industry Action Group (AIAG).
"Supply-chain efficiency is a shared vision of the OEMs and their suppliers," said Adriana Karaboutis, director of global manufacturing and supply-chain information technology for Ford Motor Co., in a statement. "Covisint's coordinated data messaging tool represents an excellent opportunity to achieve part of this vision."
Covisint was founded three years ago as an independent support group for the auto industry.

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