It's Time to Take the Automotive Supply Chain Online

Making the case for leveraging Web-based technologies to increase collaboration — and competitiveness — in Detroit and beyond


By Greg Humes

For all the innovation that has swept through the auto industry — out of the necessity to survive as much as the creativity demanded by the marketplace — automotive companies and suppliers still find themselves bogged down with slow and expensive IT networks that require constant tweaking and upgrading. And for all the talk about reshaping the industry to serve today's consumer, the industry's primary players still remain hunkered down behind walls of secrecy rather than opening themselves to the benefits of full collaboration.

This is the era of Web 3.0, online communities, mobility, flexibility, unified communications and the virtual workforce. Yet the auto industry clings to its silos of information housed in legacy systems when the only way to advance is to centralize data. Supply chains absolutely require complete visibility up and down the line to information on production schedules, warehouses and logistical arrangements for delivery of components and finished products. Until a company integrates its data in a single repository, it cannot expect to keep up with the pace of a changing market because it is spending too much time trying to find and cobble together its own data. Suppliers and original equipment manufacturers (OEMs) should be consolidating information and leveraging it across their organizations globally to synchronize their production, logistics marketing and service operations like the components of a fine timepiece.

Then companies need to stop hoarding their best practices and start collaborating with each other so that they can deal effectively with design, development and capacity issues that continually toss the industry off the path to progress and into seemingly bottomless potholes. It's time for true collaboration among OEMs and shippers if the industry expects to drive more volume and leverage its massive capabilities globally in a nimble fashion.

Interestingly, the farther back we go in the supply chain, the more data integration and collaboration we find. For example, logistics companies, along with tier-two and -three suppliers, share much common information related to shipping by ground, rail, sea or air. But tier-one suppliers and OEMs often have developed such a culture of protecting competitive advantage that they fail to make data as visible as necessary either within their companies or across their supply chains. The result is that many businesses struggle with performance while costs rise because of inefficiencies, redundancy and waste in the system relating to data management, information flow and legacy systems.

Web of Data

The industry would do well to turn in coordinated fashion to Web-based systems. Even smaller companies are beginning to realize the value of leveraged Web technology, which many now view as the most cost-efficient way to manage and communicate data and to collaborate within and between enterprises. Businesses today must be able to link into the rest of the world, regardless of their size or service.

The visibility offered by the Web enables suppliers, manufacturers and logistics companies to see exactly where shipments are, anytime and from anywhere, to gather bids from shippers in just minutes. It also enables them to select the best modes of shipment by referring to databases containing performance history and ratings, and take advantage of other capabilities that generate nearly instantaneous collaboration and accelerate decision-making. When operating across multiple time zones and technology platforms, companies absolutely must leverage the Web as a primary global resource.

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