Now that we have the data, let's mine it across the supply chain
Visibility. A key word in today's automotive industry. Specifically, supply chain visibility. In today's turbulent world with disrupted traditional business channels, few things are more valued by automakers than accurate and timely information on the status and flow of supply. However, not every supplier is able to share them. The potential of digitalised communication is far from being exploited, so time and money continue to be wasted.
In logistics, we often hear about visions of flexibility, visibility, automation and digitalisation. However, in reality, supply chains are in chaos and this is also true for the automotive industry. Today, major automotive manufacturers are pushing their primary suppliers to get their subcontractors to adopt electronic data interchange (EDI) as well. This is because ASN messages exchanged within EDI would give manufacturers visibility of where material is and when it will arrive. While information exchange is standard between automotive manufacturers (OEMs) and their largest suppliers (Tier 1, Tier 2), the presence of EDI is diminishing with each successive link in the supply chain.
„Only about 45 percent of suppliers have their own EDI solution, 15 percent use a WebEDI platform, half of which do not have this data integrated into their ERP, and the remaining two-fifths of suppliers do not use any platform for data exchange, so they work with phone and email“
Jan Stočes, Cloud Services Director, Aimtec
This is not sustainable in a world of the emerging and aggressive Asian competition.
The benefits of an integrated digital supply chain are clear at all levels. Take the example of receiving goods: when a company with EDI receives goods with a label from suppliers with EDI and the information is contained in the ASN, the receipt will be handled with a single beep of the scanner instead of handing the driver the paperwork and transcribing the data into the computer.
Seat control tower
Aimtec, with many years of specialization in the automotive industry, is able to provide solutions for digitizing the supply chain from the shopfloor to production planning to ensure that this digitisation adds real value. An example is the solution Aimtec provided for the Spanish Seat project: Code called the Control Tower. In the case of this "control tower", it is a total integration of in-house systems (SAP, MES warehouse), where messages and information from suppliers and dealers are sent via EDI.
"The result is every logistics professional's dream - total supply chain visibility. You enter the program, you can see what the supplier has in stock, thanks to ASN you have an overview of what is on the way and when and in what quantity it will arrive, what is in stock, what is in production. Thanks to the dealers, you also know what cars are in stock and for how long, or what's trending. And you can incorporate this information more or less online into your planning," says Stočes, explaining how the tower works.
The project has already attracted the interest of the parent holding Volkswagen and the goal is a final product that can be offered further - also with defined and standardised interfaces and data formats from which graphs and other up-to-date information can be easily retrieved in a clear form.
Enough with the burdens
The control tower is a beautiful example of a vision that has become a reality. However, there are few such projects so far. Too much of the automotive industry is still stuck in a semi-digitised supply chain with a lot of room for error. No one wants to deal with charges from a customer because they have sent incorrect delivery reports. If the entire chain were integrated into one EDI system, penalties would be significantly reduced because a defective ASN could be identified immediately and the supplier could take corrective action before the truck reaches the customer.
"If you send a defective ASN to an OEM, you'll get a burden within an hour or two. The OEM will often send information on what needs to be fixed. With suppliers, it's usually more complicated. If they send a faulty ASN, they put the burden back on you because the implemented ASNs are useless and you have extra work in the warehouse when receiving material," Stočes explains.
A company that has a large number of suppliers usually requires them to have a standard. Aimtec developers are able to integrate to various internal systems. "That's when we get to content control - when a supplier sends an ASN, we are able to verify on the fly that the supplier number they are using to prove themselves even exists in the system. It doesn't matter if it's a product or a contract. If we find a discrepancy, we are able to stop it and, like Škoda Auto or BMW, generate a report on what is wrong with the report. The supplier knows immediately where the fault is and how to fix it," Stočes says.
The end of the email age
Other company activities can also be partially or completely digitised. For example, a huge amount of manual work is involved in processing invoices, even if they arrive by email, let alone on paper. One paper for each package means a ton of work for the staff in the accounts department, even with the automated running of the warehouse. EDI in logistics is an invaluable tool to enable JIT or JIS processes, but invoices in a pdf file set the whole company back decades.
Current solutions are mostly based on optical character recognition, but there are new and better ones. "The advantage of neural network and machine learning technologies is that they read a document like a human. They understand all European languages, they don't care if the VAT is at the bottom or at the top or in which part of the invoice the product number is, they just read it and incorporate it into the system," Stočes explains. Companies today are most concerned with invoicing, but the technology can read anything, delivery notes, claims, payment notices, etc. "We see potential in this and expect a big boom," Stočes concludes.
Which way to EDI? We'll be your guide.
Do you dream about error-free and effective communication with your customers and suppliers? We can help you.
>> Schedule a non-binding consultation with our expert.
Top stories from logistics, production and IT.
Subscribe to Aimtec Insights
Get top stories and articles
from Logistics, Production and IT.
Subscribe to Aimtec Insights