EDI is mature and highly effective in the auto industry. Over 10,000 companies are EDI active and using it for customer service, transport, and purchasing. Auto, truck, agricultural, and construction equipment companies support the ANSI X12 or EDIFACT standards published by AIAG, the industry
standard setter.
A complication for companies serving the aftermarket is the requirement to support GS1 for price and catalog documents (GS1 is standardized XML tags). Fortunately, the standards of mass merchants (such as Wal-Mart) and specialty retailers (such as NAPA) have a great deal of commonality. The twin components of EDI (format and transmission method) have evolved over the years to increase efficiency. However, the differences in standards continue to challenge the cost conscious medium sized manufacturers.
The road ahead is clear: improvements to your existing e-commerce tools will bring you to new cost control and productivity destinations.
Overview - Data Format
Suppliers to the large companies need to support two data formats
- ANSI X12 documents for Ford, Toyota, and others such as Releases (Transaction Set 830), Shipment Schedules (862), Shipment Notices (856 ASN); and Remittance Advices (820).
- The EDIFACT equivalents for General Motors, Chrysler, and others are Releases (DELFOR), Shipment Schedules (DELJIT), Shipment Notices (DESADV), and Remittance Advices (PAYORD).
The good news is that your EDI system will map from any customer's format to your ERP system. Both formats of documents provide the same data so integration requires care. Another challenge is that the various divisions of a mid-sized company typically have common customers so data must be kept separate.
(Vendors to the after-market must also support different documents such as Purchase Orders (850), Invoices (810), and more.)
Overview - Data Transmission Method
Suppliers also must support Internet connectivity such as Covisint (formerly ANX) and traditional value added networks such as EDS' Elit™. Within these two methods of data transmission are the further complications of fully automated certificate swapping, port opening/closing, encryption, and more. The benefit is far more economical data transmission. The mature tools at hand make error correction, recovery, and process management reliable.
Exchange of business information by FTP, AIAG E-5, or over your VPN is recommended. Ford’s Global Electronic Commerce Hub (GEC Hub) and GM’s EDI mailbox, is available to suppliers using the E-5 EDI transaction standard developed by the AIAG. These are examples of the many efficient and economical combinations available for data transmission; all relying upon secure Internet connections.
New Opportunities for Savings
1. Secure Internet data transmission using EDI INT AS2 or FTPS over your VPN.
2. Web interfaces can be readily converted to time saving EDI, while some lower volume documents can remain as Webforms. The conversion cost is low because large companies offering Web interfaces also have rugged EDI interfaces.
3. Transport: Tier One and Tier Two suppliers need to exchange shipment data. The popular documents are OUTbound Bill of Lading (211)/Trailer Manifest (212), Shipment Status (214), and INbound Freight Invoice (210) (There are no EDIFACT equivalents used.)
4. U.S. Customs documents. Companies seeking more process automation should consider the build-out of EDI for customs (electronic shipping manifests).
5. Other potential savings: a) quality and test reports, b) inventory visibility, and c) healthcare enrollment. The same benefit applies: routine data exchanges should be automated to improve processes.
6. Automation of steps (ironing out wrinkles) to speed processes and eliminate unknown break-downs.
Another effective use of EDI is to automate Accounts Payables.
Conclusion
Your business is unique: yet must align your time tested methods to customers’ requirements. The format and transmission challenges are doable, time permitting. The advent of modules in ERP systems for Releases, transport, and other documents reduce the complexity and allow customer service to perform tasks formerly needing I.T. support.
Incremental improvements in process automation have a large bottom line impact in total. The challenge is how to economically make those improvements.
Our DCS Process™ can help you convert as we are thoroughly familiar with the import/export gateways of the top 20 ERP systems. After testing approvals are at hand, training of customer service is also worthwhile. Finally, our remote production support service can quickly help. The first step is easy, just email us for a Free Assessment..
Also check out some automotive EDI Success Stories:
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