Automotive suppliers are EDI veterans and have been into EDI for a long time. But it used to be relatively uncomplicated because of the industry’s business model: just ship a lot of a few assigned parts, on time, without defects. The OEM ran huge assembly plants and put the whole vehicle together. But things have changed. Many first-tier suppliers are now responsible for “systems” (really sub-assemblies) and rely on lower-tier suppliers. As their role changes, so does the complexity. Let’s look at a typical supplier who used to manufacture just rear-view mirrors.
Is a Supply Chain Management Control Tower the only way to go? What issues are not yet solved with our current thoughts on SCM Control Towers? Are we looking at some type of a “Commercial Network” instead; or are looking at “SCM Control Tower 2?” In any event, there is a requirement for further automation of the process.
What are some of the drawbacks with our current implementation strategy?
- The “network” that is required for visibility sometimes requires lower-tier suppliers, public warehouses, wholesalers, etc. to “log in” to several different networks (one for each “important” SCM Control Tower they deal with. We need a simple, reusable network approach to bring everyone into the tower. The solution lies in B2B Networks (VAN2). Extremely time critical communications could be accomplished by “texting” selected members of the Control Tower community, then following up with an EDI message.
- Is there too much dependence on humans making decisions? Cannot some of the decisions being made be better automated? Can’t we use “decision support” technology to build automated responses at the back end of system?
In designing Supply Chain Control Towers, we have been heavily concerned with visibility into outsourced and/or offshore finished products suppliers. But the Manufacturing function itself depends on it’s own critical parts suppliers. We have to realize that success is more than just assuming Manufacturing’s ERP/MRP will handle everything for us. Let’s take a look at the automotive industry and what it takes to create an integrated manufacturing process.
What do we mean by integration? It starts with complete visibility both up and down the manufacturing path. This path must be solid as a rock, high speed and able to support CAD/CAM as well as EDI.
Ecommerce Service Providers (ECSP) are a “hybrid” with high turnover rate, deal with all implementation guides, and amount to a “Hub of Spokes”). An ECSP is what we previously called VAS (value added services) such as SPS Commerce. Can be referred to as a “VAN2” if it moves EDI messages over the Internet.
Let’s characterize the three types of EDI customers: Hubs; Spokes; Ecommerce Service Providers (ECSP). A “Super Hub” accommodates all three types of customers.
Let’s take a typical ECSP and describe their service offerings by reviewing their respective WebPages:
A HUB is just one type of EDI customer. Hubs are characterized by high volume, lots of partners, high availability and high accuracy. The concept of the “Hub” is simple. These are the companies who reach out to their trading partners and request those partners to trade electronically.
Let’s characterize the three types of EDI customers:
(2) Spokes (low turnover of trading partners but higher technical requirements)
(3) Ecommerce Service Providers (ECSB) (a “hybrid” with high turnover rate, deal with all implementation guides, and amount to a “Hub of Spokes”). An ECSP is what we previously called VAS (value added services) such as SPS Commerce.
EDI data has historically been exchanged between business partners through value-added network services (VANS), employing a simple hub-and-spoke model, the business partners being the spokes and the VAN operators assuming the central hub role. While being quite effective in the pre-Internet era, VANS are hardly competitive anymore. However, more recent approaches to the reliable exchange of EDI data like EDIINT AS/2 create new issues: While eliminating the VANS’s high volume costs, Internet-based point-to-point approaches like AS/2 dramatically increase the one-off setup costs by requiring all participants to assume server roles, not just a single dedicated hub. While acceptable for large companies, this is bad news for small and medium-sized businesses (SMBs).
The most noticeable difference between VAN1 (the “traditional” VAN from the 1980’s) and VAN2 (today’s technology) is the fact that a company can operate their own network instead of being a customer on somebody else’s. Control the network according to your needs, Embed EDI Network functions within your code, and start creating completely unique EDI management functions that will overturn 20+ years of non-optimized EDI integration nightmares!
ECGrid is an example of VAN2. It supports AS2 and FTP and API, combined with superior account control, all at a fraction of the cost of running your own communications racks. It includes:
- Intersystem interconnections via API calls and world class net ops.
- Next generation routing architecture connecting to a world of global commerce networks.
- VAN2 empowers cloud ventures to penetrate the SME sector – the next EDI frontier – with an estimated $30B of untapped IT revenue waiting to be captured.
- These new B2B cloud services are the place to participate in supply chain and horizontal commerce operations. It allows you to run a “virtual VAN”.