|
The Future of AIAG EDI in the Auto Industry
Introduction
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 CEFACT (formerly EDIFACT) standards published by AIAG, the industry
standard setter. The twin
components of EDI (format and transmission method) have evolved over the
years to increase efficiency. Unfortunately, this means more challenges
for the medium sized companies.
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 CEFACT 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' ElitTM. 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 FTP 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 CEFACT 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 apply:
routine data exchanges should be automated to improve processes.
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:
| 