Friend or Foe? EDI Requirements within the Automotive Supply Chain

Friday, February 4, 2011 at 10:00 am
By Jon Rivers

Dynamics ERP experience, check. Dynamics EDI experience, check. Automotive EDI requirements, no check.

The automotive supply chain is not something in which I have much first-hand experience, and so I was all ears when I recently spent the day with Donna Ward, former co-chair of the Automotive Industry Action Group‘s Supply Chain Management Project Team. Given Donna’s extensive experience within the automotive industry, she could clearly outline just how critical EDI is to the supply chain, as well the most common EDI challenges companies using Microsoft Dynamics face.  

To understand the magnitude of daily transactions related to what we were discussing, Donna informed me that the average automotive assembly plant makes about 1 vehicle per minute and as many as 2000 per day. With  each vehicle having 5000 – 7000 components, we’re talking that a typical automotive assembly plant is handling up to 14 million parts each day.  

That’s a lot of parts to say the least, and if you’re a supplier to this 14 million part-a-day industry, then you’re not only familiar with the rigorous EDI requirements that accompany each transaction, but also the most common challenges: 1) Release Management, 2) Forecast and Sales Order Replacement Logic, 3) CUMs and RAN Management, and 4) Compliance Labeling.  And not to make matters sound worse, but if you’re not automating and integrating EDI with your Dynamics solution, then you’re also piling on the inherent risks and costly errors associated with manually keying data.

Donna discussed just how risky manual processes can be by looking specifically at tracking cumulative quantities (CUMs) within release processing. If you do not maintain the CUM shipped, or do so manually, you’ll struggle with the challenges associated with the tracking process. Each time a release arrives, you’ll need to manually calculate what is in transit for every item you ship (ouch!). For small shops, this manual process may seem manageable now, but as business grows, the potential for error and risk grows as well.

Donna’s Point: Yes, as a supplier to the automotive industry you’re challenged by transaction volumes and EDI requirements. However, it’s up to you to decide whether you want to use EDI to operate your business more efficiently or to continue accepting the risks and costs of not having a fully-integrated and automated EDI solution on your side. By embracing your EDI requirements and leveraging EDI technology with Microsoft Dynamics, you can end your relationship with the risky challenges and start fresh with new opportunities to save money, eliminate errors and improve overall customer satisfaction.

 For more information, read the white paper “Understanding Automotive EDI” written by Donna Ward, PMP and former co-chair of the Automotive Industry Action Group’s Supply Chain Management Project Team.

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