Learning EDI from Automotive

Learning EDI from Automotive
The various drivers for adoption of EDI in the automotive sector are strong. Being an early adopter of the technology, automotive has had to wrestle with the challenges inherent with pioneering new technology. While providing interesting lessons for other sectors, automotive itself continues to be a hotbed for EDI development.

Indeed, a study of the UK industry by KPMG for the Society of Motor Manufacturers and Traders1 forecasts that “a more rapid development of digital technology within the automotive industry will give an annual benefit of £8.6 billion”. It notes however that “some suppliers, notably SMEs had not begun any significant digital pilots”, that there is a lack of “the trust needed between supplier and manufacturer to share data electronically” and that some SME suppliers felt a ‘first-step’ programme would help. Although EDI is likely to develop and transform significantly in the future, widespread adoption of EDI in its current form would be an appropriate ‘first step’.
As the automotive sector continues to pursue development of EDI, it’s experience thus far does offer some important lessons for other sectors:

Lesson 1

Don’t close off options by letting EDI become the province of one function. It may be a solution to today’s manufacturing or administrative problem, but it may also be the platform for other situations you haven’t thought of yet.

Lesson 2

Extend EDI as deeply into your supplier, and other, networks as far and as fast as is practicable. Cost and complexity are no longer major barriers, even if your smaller partners think they are. Back in the nineties, Automotive OEMs in Europe, US and elsewhere succeeded in extending EDI to their major Tier One suppliers, who were mostly large corporations able to stand the initial and on-going cost of ‘traditional EDI’. Lower tier suppliers however found the costs prohibitive.

Lesson 3

The automotive sector bred a multiplicity of standards. So it is important that as far as is possible with your partners, to agree on standards and protocols that are current, and still actively supported and developed. And don’t start developing your own unique messages. Ask yourself why you appear to have a need that no one else recognises?

Lesson 4

Keep an eye on automotive industry developments – it is likely, as it always has, to generate many developments that will go on to transform completely different industries.
Fortunately for new entrants to EDI, in automotive or elsewhere, there are solutions to these lessons. EDI no longer requires heavy upfront IT investment, in-house development and maintenance staff, or a long-term commitment to extensive training.

EDI no longer requires heavy upfront IT investment, in-house development and maintenance staff

EDI is available, at least in elementary form, as a web-based product; at all levels it can be acquired as ‘Software as a Service’ or a fully managed service. Reliable vendors manage all the integration and translation between different standards and protocols, and have methodologies for training your staff and for on-boarding partners. And they take responsibility for keeping up with developments and ensuring all your trading partners are on the same version.

For further information send us an e-mail at info@datainterchange.com or keep up to date on EDI following our Linkedin profile.

1. The Digitalisation of the UK Automotive Industry.