Covisint Takes on EDI

Forms consortium of auto industry heavyweights to develop lower-cost replacement for electronic data interchange

Southfield, MI — May 12, 2003 — Auto industry e-solution provider Covisint is forming a technology development consortium with the goal of building a data messaging solution to improve communications between companies in the automotive industry and to replace electronic data interchange (EDI) solutions.

Members of the consortium include a "who's who" of automotive heavyweights, with DaimlerChrysler, Delphi Corp., Ford Motor Co., General Motors, Johnson Controls and Lear committing financial and human resources to the initiative, according to an announcement from Covisint.

The erstwhile coalition e-marketplace, which has refashioned itself into a messaging hub and solution provider for the auto industry, said that the new messaging solution, scheduled for deployment in late 2003, will allow its customers to send and receive electronic data to applications behind each others' firewalls, as well as to Covisint applications, at a significantly lower cost than available from current EDI solutions.

The messaging solution will also enable smaller companies not currently using EDI to connect to their customers and suppliers, Covisint said.

The solution will support such Internet-based protocols as XML, as well as the millions of EDI (EDIFACT and X12) messages that are exchanged daily in the automotive business, according to Covisint. The specifications for this solution are being developed in cooperation with the Automotive Industry Action Group (AIAG).

"A coordinated messaging implementation will lead to common processes and increased velocity of information throughout the automotive industry," said Bruce Swift, president, CEO and chairman of Covisint. "Simplification of the messaging process will provide increased participation and reduced costs to businesses at every level of the supply chain. This will be core to Covisint's strategy in becoming the hub for the global automotive industry."

Leadership from the participating companies offered words of support for the initiative in a statement issued by Covisint. For example, Gary Valade, executive vice president for global procurement and supply at DaimlerChrysler, said that the messaging service would improve open communication and information sharing at all levels of the supply chain.

J.T. Battenberg III, chairman, president and CEO of Delphi, said that the jointly developed messaging service would help to reduce costs associated with EDI and improve the flow of information among the supply base. "EDI connections have long been a costly inefficiency for the industry," he said.

"Supply chain efficiency is a shared vision of the OEMs and their suppliers," said Adriana Karaboutis, director for global manufacturing and supply chain information technology at Ford Motor Company. "Covisint's coordinated data messaging tool represents an excellent opportunity to achieve part of this vision."

Ralph Szygenda, GM group vice president and chief information officer, said that GM sees value in creating an EDI alternative that allows the company to collaborate more efficiently in real time with its supply base. "We believe a standard solution will deliver economic efficiencies while providing an affordable data communication tool for smaller automotive companies as well," Szygenda said.

John Barth, president and CEO for Johnson Controls, suggested that the service being developed by the consortium would help to reduce the number of connections and improve the company's data communications with the rest of the industry. "The simplicity of the new system should reduce cost and complexity," Barth said.

Finally, Jim Vandenberghe, vice chairman at Lear, said that the consortium approach being employed would be the best method of developing a true industry solution. "We look forward to rationalizing our EDI network," he concluded.