It is difficult to imagine an automotive industry without EDI. Without efficient supply chain management, the entire automotive industry would come to a screeching halt – and we’ve already seen how other global market forces have caused painful supply chain bottlenecks. Technology cannot solve all of these problems, but it is certainly an essential link.
In a ranking of the world’s top 100 automotive suppliers, we were proud to see 20 of Axway’s customers and partners in the top 50. Supporting these suppliers is a task we take very seriously: with the high level of automation characteristic of the industry, efficient interaction between suppliers, OEMs, and logistics providers is particularly important.
EDI is deeply embedded in the automotive industry
Right now, there is no question that the global automotive industry runs on EDI: the supply chain core is still based on asynchronous file transfers of structured messages, mainly between car manufacturers (OEMs), suppliers, and logistics service providers. And many of the top players in this industry rely on Axway B2B Integration services – often in the Axway Managed Cloud – to keep supply chains running just in time and in sequence.
Most American and European vendors have adopted a build-to-order approach, which makes for very complex logistics as moving, customizable parts need to arrive at the right place at the right time. Meanwhile, many Asian companies are building to stock – a different logistics scenario, yet both require extensive synchronization via EDI along the supply chain.
For the past 20 years, Axway has been supporting the essential communication between this vast network of players. That network extends to logistics service providers like DB Schenker or Groupe CAT, which also play a key role in the business by providing the glue between OEMs and suppliers.
Shifting gears in the automotive industry
Despite talk of the “end of EDI” in some circles, it would be impossible to wholesale replace a technology so embedded in this complex B2B ecosystem. At the same time, newer market entrants, like Tesla, are using optimizations in their supply chain operations to differentiate.
With these growing pressures, as well as new process and technology requirements, supply chain transparency, resilience, and agility has become even more important to traditional vendors. A recent study showed that only 12% of global manufacturers are sufficiently protected from future disruption. Aging EDI and B2B integration solutions cannot support the innovation, scale, and demands of modern API-driven business requirements.
Today’s automotive industry needs more than EDI alone can provide, such as:
- synchronous real-time information exchange
- new applications and a new app developer generation
- use of interactive mobile apps (such as for truck drivers)
- automatic devices for tracking, like RFID gateways, which create masses of additional supply chain events.
Taking matters into their own hands, many supply chain stake holders began to implement ad-hoc API-based solutions, but without standardization, the result has sometimes been redundant and incompatible. Often, app developers also forgot to build backward-compatibility with the existing EDI-based applications and integration processes.
Innovating with EDI and APIs together
Most players in the supply chain believe that the existing EDI-based processes and application and integration infrastructure will remain for at least another 5-10 years. It is therefore essential that any future EDI/integration technology be able to bridge between APIs and the classic EDI world.
And that is how the current solution is taking shape: on request of major OEMs and first tier suppliers, the automotive standardization body ODETTE developed a pilot recommendation using OpenAPI to specify the process interactions between different supply chain participants.
This new recommendation is compatible and co-existent with existing EDI-based recommendations. It does not intend to replace existing standards, but rather enhances existing supply chain processes, augmenting EDI processes with new API-driven status messages.
The recommendation outlines how APIs can be used to create an adjacent visibility platform for all relevant supply chain transactions. Layering it over existing EDI processes, an automotive OEM could monitor the health of the upstream supply chain and be more prepared for issues that may arise from slow-downs or bottlenecks that are outside of their direct control.
This is a prime example of Axway’s Open Everything vision: opening up data across multiple organizations, all sorts of disparate applications, and various business processes, of which EDI is one part. Finding a way to continue to integrate these technologies will benefit the health of the entire automotive supply chain.
Many of the world’s auto suppliers rely on Axway
With Axway’s B2B Integration platform, one U.S. auto parts distributor can process most client orders with minimal human involvement — freeing employees to focus on strategic planning and helping the organization mitigate the risk of pandemic-related supply chain issues.
“Despite our large volumes, we rely on a lean team to manage B2B integration for the entire enterprise,” explains a spokesperson. “To keep our business running smoothly — especially given supply-chain pressures caused by the pandemic — reliable B2B integration processes are essential.”
As APIs transform our digital experiences, we continue to meet with customers in the automotive B2B/supply chain market – and each day, the Open Everything mantra becomes more and more relevant.
Axway has been setting industry standards and helping to define and test them for years, and we will continue to work on evolving our B2B integration platform, helping enterprises migrate to the cloud, streamline EDI & APIs, and build value-added services for their customers for years to come.
Is legacy EDI technology putting your business at risk? Find out in our white paper.