Integrating Automotive · 1 Get SMEs connected in smart digital automotive supply chains European small and medium enterprises and the un-precedented challenges facing them today

Integrating Automotive

Connecting SMEs to the digital supply chainAuto-gration – automotive integration... made easy

Enterpriseand Industry

Acknowledgements

This publication is produced by the members of the auto-gration project consortium (Odette International, BOOST, CECRA, CLEPA and Inova+), in co-operation with the sub-contracted project participants COVISINT, FIGIEFA, GALIA, INESC Porto, Odette Sweden, SupplyOn and TecCom. The consortium would like to express its thanks to all the participants in the Early Adopter Programme, the members of the auto-gration Advisory Board and the European Commission DG Enterprise and Industry for their valuable support, feedback and contribution to the final outcomes of the auto-gration project.

Text: Scientia Scripta, www.scientiascripta.co.uk, [email protected]: Poplar, http://poplar.atPhotos: Project members, iStock (cover, pages 4, 5, 6, 7, 9, 11, 16, 17 & 22)

© European Union, 2012

Reproduction permitted, provided the source is acknowledged. For use/reproduction of third-party copyright material specified as such permission must be obtained from the copyright holder(s). The contents of this publication do not necessarily reflect the position or opinion of the European Commission. Neither the European Commission nor any per-son acting on its behalf is responsible for the use that may be made of the information contained in this publication or for any errors that may remain in the texts, despite the care taken in preparing them.

ISBN 978-92-79-23361-6doi: 10.2769/32552

contents

Foreword

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Get SMEs connected in smart digital automotive supply chains

European small and medium enterprises and the un-precedented challenges facing them today are at the centre of the European Commission’s interest. SMEs are the growth and job creation engines in Europe. They will provide the innovative products and ser-vices of the future to respond to our societal chal-lenges.Information technology is one of the strongest driv-ers for competitiveness, innovation and change in our modern economy, with high potential for smaller enterprises. European SMEs grow two to three times faster when they embrace the digital economy. In-formation technology cuts across all sectors of the economy; in fact, more than 75% of the value-added created by the internet economy is in traditional in-dustries. Its greatest force is the modernisation of traditional activities, leading to higher productivity. In parallel, industrial value chains are becoming more and more sophisticated and globalised. The competi-tiveness of smaller players depends increasingly on their capacity to connect better to larger enterprises and become part of global value chains. I am convinced that the way for European SMEs to exit the crisis stronger is via innovation and smart use of information technology. It is the vehicle to drive smaller, innovative and dynamic businesses to the international business arena and offer them a better position in the globalised world.The European Commission is fully committed to improving the efficiency of the EU business environ-ment through smart use of ICT. We have sped up the implementation of the Small Business Act for Europe. We will press ahead the full implementation of the Digital Single Market, one of the key levers of the Single Market Act.

The Directorate General for Enterprise and Indus-try launched an EU initia-tive to promote the smart

use of ICT and the integration of SMEs in global in-dustrial value chains. The objective is to lead mod-ernisation efforts through the smart use of infor-mation technology and offer SMEs better access to global markets. This initiative is a key step towards the integration of SMEs in the Digital Single Market.The auto-gration demonstration action is part of this initiative which aims to catalyse the smart use of modern information and communication technolo-gies along the integrated automotive supply chain and facilitate the speedy and low-cost integration of smaller suppliers. It provided a common framework for interoperability among different technological systems and solutions along the supply chain that can be implemented by any ICT vendor, easing the connectivity of smaller players and offering them ac-cess to the global automotive market.The European Commission is fully engaged in this process. But the end of a demonstration action is only the beginning of the real market experience. I am very pleased and welcome the industry-led initiative to sign a Memorandum of Understanding among major automotive and ICT industry stake-holders, backed by their representative organisa-tions, to further promote and extend the work of this action. This is the type of public-private partnerships that we need to lead the transition from mere pilots to breakthrough mass market adoption, releasing their full potential in the marketplace.

Daniel Calleja CrespoDirector General for Enterprise and Industry

2 Get connected!3 An essential expense?4 Auto-gration: the common framework5 European support6 Quick connection, clear benefits8 Simply success9 Adopt and achieve10 Case studies20 Committed to connect21 The Early Adopter Programme

We all take our cars for granted. We need them to get to work, we load them with shopping, we enjoy driving in the country or

visits to family or friends. It is so easy to get behind the wheel, start the engine and pull away.The complexity of our four-wheeled workhorse is quite astounding. Think of the thousands of compo-nents: mechanical parts, trimmings, safety devices, electronics. There are sub-components and sub-

assemblies; many different parts made by many different companies – some large, some small specialists – often in different countries. Directly or indirectly, the car-maker relies on

a host of suppliers for the assemblies, components and materials that eventually come together to make a car.And that’s just the start of the story. You need to keep your car roadworthy, so at least once a year it goes to the garage. If you are lucky you get away with an oil and filter change, although over its life-time many parts – tyres, the clutch, brakes and bear-ings – will be replaced. The European automotive market involves a com-plex network of tens of thousands of companies: component and parts manufacturers, multinational car-makers, regional parts distributors, and not for-getting your local independent mechanic in his repair shop round the corner. In recent years, as the internet has grown, companies have seen the benefits of the digital world; they have adopted many e-business practices and processes to raise their productivity and lower costs. For example, information and communication tools and software let business partners automatically exchange busi-ness information up and down the supply chain and help them interact more efficiently with each other.

Large businesses in the automotive sector have understood this advantage for years. They have all adopted automated electronic data interchange (EDI) to send and receive data to and from their own ICT systems and the systems of customers and sup-pliers. There are several EDI standards which define the format and required content of the electronic documents (messages) sent between the ICT sys-tems (e.g. the enterprise resource planning systems) of trading partners. EDI allows business partners to integrate their back-end ICT systems and effectively streamline many business operations, especially supply chain pro-cesses such as ordering, invoicing and issuing des-patch notes and delivery receipts.For most businesses, accurate and up-to-date infor-mation means time and money: faster service, fewer mistakes, lower costs, loyal customers. By adopting EDI, businesses can benefit from a wealth of sup-ply chain information, which they can access and analyse to improve and monitor their business oper-ations. EDI also enables the automation of numerous business processes, freeing up employee time and making them more productive. In other words, EDI unlocks competitive advantage.

Get connected!

I n t r o d u c t i o n t o E D I

SMEs in the European automotive industry now have an easy way to

connect electronically to suppliers and customers – and reap the benefits of

automated data exchange.

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Each actor can affect the growth, efficiency and bottom line of others in the value chain.

EDI, unlock your information potential

With EDI you can automatically…• Issueelectronicordersordelivery instruction

information• Sendandreceivedespatchnotesanddelivery

receipts• Sendandreceiveelectronicinvoices• Shareyourcatalogueandstockdatawithcus-

tomers• Immediately see the availability of parts at

your suppliers• Haveup-to-dateinformationaboutthestatus

of orders

I n t r o d u c t i o n – p r o b l e m f o r S M E s

Large players in the automotive mar-ket have invested heavily in EDI sys-tems; they also have the commercial clout to insist that their suppliers and customers conform to their system’s.Traditional EDI is often complicated and expensive to set up – and generally not ideally suited for interac-tions between SMEs and their business partners. An SME may have the appetite for e-business, but rarely has the time or the money for major ICT integration projects. SMEs are caught in the middle: if they want to do business with the large players – or enjoy the wider benefits of e-business – EDI is essential, not an optional extra.So is EDI only for the big players? Are SMEs, who con-stitute more than 90% of the companies in Europe’s industrial base, stuck with inefficient, often manual processes?The more recent introduction of WebEDI tries to bridge the gap. Numerous business-to-business (B2B) service providers have stepped in to connect previ-ously incompatible systems and ‘translate’ between different EDI standards and formats so businesses do not have to support multiple EDI systems. Now all an SME has to do is input its data (e.g. a parts order or a despatch note) online and the B2B service provider does the rest, converting data into the right EDI format for the SME’s EDI-enabled partners.

WebEDI makes e-business and EDI connectivity available to SMEs, but all too often increases admin-istrative overheads. Frequently SMEs have to input data manually into online web forms, often duplicat-ing data entry and increasing the risk of errors, such as inputting wrong part numbers or quantities. Moreover, there are many different B2B service pro-viders, each offering different variations of WebEDI and supporting different ‘flavours’ of EDI format. WebEDI, therefore, has its own drawbacks. It might avoid the capital costs and business disruption asso-ciated with full EDI integration, but it has its own hid-den costs that arise from errors in data entry and the employee time required to upload and download data to and from WebEDI. And with so many ser-vice providers in the market, fragmentation and incompatibility remain a problem. With so many SMEs operating at all levels of the European automotive supply chain it is essential that the competitive benefits of EDI are available for everyone. Data exchange between trading part-ners must not be hindered if they adopt different EDI standards, use different B2B service providers or dif-ferent ERP software. The supply chain urgently needs a common ‘language’ so that messages can be sent, received and understood, irrespective of the ICT solu-tions in place.

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EDI: not just for the big players.

An essential expense?Large players in the automotive market have invested heavily in EDI systems; they also have the commercial clout to insist that their suppliers and customers conform to their system’s standards.

With a common language, communication is possible and seamless supply chain integration can become the norm.

The auto-gration con-sortium includes players from every level of the European automotive supply chain. The part-ners in this successful cross-industry initiative represent large manu-

facturers, regional distributors and SMEs from both the upstream supply chain and the downstream aftermarket. The consortium has developed a sim-ple solution that allows companies, especially SMEs, to connect digitally with business partners whether they are large or small. Funded by the European Commission’s Directorate-

General for Enterprise and Industry, the auto-gration project has added the final link to the established EDI landscape while adopt-ing existing best prac-

tices. The project has developed the specifications for an ICT architecture which uses state-of- the-art, yet well-proven ICT technologies (e.g. the inter-net, XML data formats and web services) to support both direct and indirect data exchange between businesses.Auto-gration is not yet another EDI standard, but a set of specifications on how business information can be formatted, sent, received and ‘translated’ between different ICT systems. Auto-gration makes it simple to transport and translate data between the existing enterprise management systems of compa-nies, regardless of whether they already use an EDI

interface. Auto-gration works with established EDI formats and infrastructure components, thereby pro-tecting the investments already made by the larger players. It can be used to connect SMEs with each other and to their larger business partners either directly or indirectly via B2B service providers.

“Europe’s vehicle and larger component manufacturers have enjoyed EDI for dec-ades, but there are many SMEs that rely

on manual or semi-manual processes. Now there’s an answer to this inefficiency: auto-gration.”Philippe Paban, vice president of supply chain and manufacturing information systems, Renault

“CLEPA is recommending auto-gration to all its members. It is the simplest and easiest way especially for SMEs to connect

with the EDI systems of all Europe’s major car-mak-ers and between big and small suppliers upstream and downstream.” Lars Holmqvist, CEO, CLEPA

All you need is a broadband internet connec-tion. Even the smallest SME running a com-puter in the corner of the workshop can benefit from auto-gration. Parts orders or despatch notes can be sent automatically; any auto-gra-tion enabled supplier or customer could auto-matically process the message data directly into their internal software systems for further action.

Auto-gration: the common framework

I n t r o d u c t i o n t o a u t o - g r a t i o n 4

Auto-gration provides a common language so that suppliers and

customers in the supply chain can automatically exchange business data

– orders, stock availability, delivery instructions, invoices – regardless of

their installed ICT systems.

Large EDI Partner

Large EDI Partner

Large EDI Partner

Large EDI Partner

Large EDI Partner

Large EDI Partner

Large EDI Partner

Large EDI Partner

EDI Flavour

EDI Flavour

EDI Flavour

EDI Flavour

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Small BusinessPartner (SME)




NO!

EDI Flavour

EDI Flavour

EDI Flavour

EDI Flavour

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Connector

Connector

WEB Portal

B2B PlatformProvider = IOPInteroperabilityplatform provider

WEB Portal

WEB Portal

Connector

Connector

Connector

Connector

Connector

Internet

The auto-gration Architecture

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The auto-gration architecture accepts messag-es from mutually incompatible systems and transforms them so that trading partners can seamlessly and automatically communicate with each other.

The European automotive industry is a key sector for the European economy. It provides the means of transport for the majority of passengers and the bulk of freight within the EU. More than 12 million people work within the industry which has net exports of more than €50 billion.The automotive industry is essential for pros-perity in Europe, but global competitive pressures and demographic trends are forcing the industry to change how it does business and to reshape its markets. Growth in the European market may be slowing but the market in emerging economies is growing fast. European firms must be ready to enter the global supply chain and adapt to new trade flows in goods and services. Meanwhile innovation must cut costs, speed up production, reduce waste, improve quality and increase customer satisfaction.Recognising the importance of SMEs for Europe’s sustainable economic growth, the European Commission decided to make it easier for even the smallest company to connect to global digital supply

chains and benefit from the advantages of automated information exchange. The develop-ment and widespread adoption of the auto-gration architecture will posi-tion the sector for strong and more efficient perfor-mance in years to come.

“Auto-gration gives every player in the automotive supply and distribution chains a common language, which they can use

to exchange essential business information auto-matically. We’ve now made it easy for SMEs to enjoy all the benefits of fully-integrated EDI with the full backing of the European Commission.”John Canvin, managing director, Odette International

“A key criterion in the aftermarket parts supply and repair chain is a very fast delivery of spare parts to the repairer.

Auto-gration will enable a quick ‘availability check’ and the ability to order immediately the right part, resulting in automatic shipping and invoicing. This universal, easy-to-use, and low-cost solution will improve digital communication among all players in the aftermarket parts supply chain by facilitating the exchange of information over existing, but cur-rently not fully compatible, systems. Auto-gration will reduce errors and speed up deliveries – and this is key to success!” Michel Vilatte, president, FIGIEFA

European supportSeamless digital integration of SMEs will help Europe’s automotive industry to remain agile and offer added value in the face of increasing pressure to cut costs.

I n t r o d u c t i o n t o a u t o - g r a t i o n 5

How does auto-gration boost your work?

… a simple way to transport data to/from the management systems of SMEs allowing them full digital supply chain integration. … works with established EDI formats and infrastructure, thereby protecting the invest-ments already made by the larger players, but opening participation for SMEs.… overcomes the barriers to entry and frag-mentation in the automotive digital supply chain.

Competitive pressures in Europe’s automotive market are intense; any system that increases

productivity, improves customer satisfaction, cuts costs and establishes competitive advantage cannot be ignored. And the good news is that auto-gration is avail-able to all interested business partners. The specifications can be freely adopted and have been specifically developed to meet the needs of busi-nesses involved in the automotive supply chain.

Benefits for SMEs

With auto-gration, SMEs can reap all the benefits of full integration into the automotive sector’s digital supply chain and the competitive advan-tages of automated EDI.• Simple and cheap: a low cost, easy-to-install

solution for full EDI supply chain integration.

• Fast to deploy: get connected with auto-gration in less than one day.

• Cut costs: lower administrative overheads.• Save employee time: no more ringing around or

waiting to send out manual email enquiries.• Rapid return on investment: immediate cost

savings give a return on investment in under 12 months.

• Interoperability: better connectivity between smaller enterprises and larger players, as well as between the manufacturing and aftermarket sup-ply chains.

• Business agility: immediate information on products and their availability will help you to se-lect suppliers offering the best value for money and quickly respond to changes in customer or-ders.

• Greater customer satisfaction: fewer errors, lower operational costs and faster response times lead to more business opportunities.

• Faster deliveries: find the right supplier and send your order – at the click of a button.

• Data means knowledge: access to information from your business partners helps you to inno-vate and maintain competitive advantage.

• Participate in a wider market: source from a larger network of suppliers, find new customers in new locations in Europe and beyond.

Want to get connected? Talk to your ERP vendor, B2B pro-vider or visit www.auto-gration.eu to find out how. You could be connected in less than a day!

Quick connection, clear benefits

B e n e f i t s 6

For SMEs, auto-gration could be a life line, connecting them into a supply chain which increasingly insists on

speed, efficiency and low cost.

Benefits for large companies

Large companies have invested heavily in ERP and EDI platforms, so they often try to maximise a return on their investment by insisting that smaller sup-pliers and customers comply with their chosen EDI standard. The efficiency of EDI is often offset by in-flexibility when it comes to dealing with SMEs.Auto-gration bridges the ‘language barrier’ between EDI systems. By installing the auto-gration connector or by using an ‘auto-gration enabled’ B2B provider, large companies ensure that their internal systems can connect with the EDI and ICT platforms of all their business partners, irrespective of the plat-forms and software they use. New suppliers, even micro-businesses, can easily connect to the digital supply chain and meet the minimum e-business cri-teria of the larger businesses.

A more competitive and agile supply chain

Auto-gration provides an opportunity for B2B ser-vice providers who have already built good rela-tionships with numerous players in different supply chains. Auto-gration will make it easier for a B2B provider to ‘plug in’ new upstream and downstream clients and give them instantaneous connectivity to a much larger pool of potential partners. B2B provid-ers using the auto-gration connector will have con-siderable competitive advantage: a larger pool of po-tential customers, greater scope for offering a global service and scope for multiple e-business services, such as simple e-invoicing, for their SME customers. Software developers and ERP vendors have to con-sider the EDI functionality of their software. Auto-gration is an extra tool in the box; it will deliver functionality and EDI compliance and integration capabilities – real selling points in any sales pitch. When companies invest large sums on software, compatibility with industry standards, flexibility and no ‘lock ins’ are all highly attractive to the CIO who must sign off the purchase.

B e n e f i t s 7

“We encourage our integration service provider to support the auto-gration architecture. It will give our smaller suppliers the chance to send or receive their

business documents automatically from and to their internal IT systems, saving them time and money. We benefit from better data quality. We mainly expect auto-gration to help us achieve better supplier integration in emerging markets. In such a win-win situation the move to auto-gration is a pretty simple business decision.” Michal Nettl, EDI projects co-ordinator, Skoda Auto

The industry dream – full digital connectivity between all players in the automotive value chain – is now a possibility thanks to the auto-gration connector. Two years of

R&D, testing and pilot trials have produced this essen-tial piece of middleware which acts like a translator between the internal enterprise resource management platforms and EDI systems of different companies. The auto-gration connector automatically translates and passes information – orders, invoices, despatch and delivery advice – between business partners. The auto-gration connector sits between a company’s databases or EDI platform and the outside world. It converts out-going data from a variety of different formats or EDI standards into a generic ‘auto-gration XML’ format. If the receiver also uses the auto-gration connector, the incoming XML can be converted into

whichever EDI ‘language’ the receiver organisation uses.The messages are routed between the sender and receiver using standard internet protocols. SMEs can also use the auto-gration connector to form direct connections with each other or connect with auto-gration ena-bled B2B providers.

A large number of pilots have been run to test the new architecture and monitor electronic data exchanges using the auto-gration connector between numerous supplier/customer partnerships. The thorough test-ing of auto-gration has helped the team to refine its technology and prioritise user-led developments for the future. The experience of auto-gration’s early adopters clearly demonstrates the feasibility of the auto-gration connector and exchange architecture to link different players in the supply chain and integrate supplier and customer data into ordering, despatch-ing and invoicing systems.

Simply success

“In today’s digital age, e-invoicing makes absolute sense but many SMEs are still struggling to adopt this approach. Now

auto-gration makes it easy. The benefits are clear: data goes straight into the partner’s financial man-agement system, reducing errors and delays and facilitating on-time payment. The VDA welcomes the auto-gration solution and recommends it for use in the e-invoicing process, as well as in vari-ous logistics processes, in order to achieve a bet-ter integration of suppliers via automated data exchange. ”Werner Mock, head of logistics department, VDA

P r o j e c t a c h i e v e m e n t s8

It is simple but effective. Auto-gration effectively translates EDI messages

from one ‘language’ to another making it possible for businesses to

connect to multiple suppliers and customers using a single interface.

Early uptake by the industry

• The German Automobile Association (VDA) has recommended that e-invoicing systems for SMEs should be based on the auto-gration architecture.

• AdoptedbyEurope’sleadingautomotive B2B service providers.

• Agreement from an increasing number ofmajor ERP software vendors to add the auto-gration connector to their systems.

Participants in the auto-gration Early Adopter Programme are now using auto-gration for a wide range of automated EDI processes (see pages XX-XX). They report an impressive array of business advantages and a clear boost to their productivity and

Feedback from early adopters indicates that the auto-gration architecture has delivered:• Automated ordering for 80% of order lines.• Areduction in telephone and fax inquiries for

stock availability by 60-80% within the first one to three months.

• Time savings of one fulltime equivalent day per week.

• A50% reduction in the costs associated with data mapping and translation between ERP and EDI systems.

• Betterbusiness relationships fromgreateropen-ness and automated workflows.

• Interest from other customers or suppliers wishing to adopt EDI.

• Improvedbusinessplanningbyanticipating cus-tomer requirements and orders.

• Faster response times leading to greater cus-tomer satisfaction and loyalty.

• Less duplication of data inputting.• Fewer transcription errors and more reliable

supply chain data.• A30% increase in staff productivity and less

sales administration.• More transparent order tracking helps busi-

ness planning and improves customer satisfaction and customer relations management.

• High service levels thanks to better back order management.

• Advanced despatch information accelerates stock entry, increased stock rotation and conse-quently higher sales.

• Automated invoice control, freeing staff to deal with the higher priority, high value tasks.

• A reputation for innovation and business improvement.

O v e r a l l r e s u l t s f r o m p i l o t s 9

Adopt and achieve

Return on investment? Early adopters of auto-gration estimate a re-turn on investment of less than 12 months. Contact your B2B provider, ERP vendor or visit www.autogration.eu to find out how to get connected.

Participants in the auto-gration Early Adopter Programme are now using auto-gration for a wide range of automated EDI processes. They report an impressive array of business advantages and a clear boost to their productivity and bottom line.

“It’s a tough market out there and if you want to keep your customers you

have to prove that you are the best,” says Tilman Veltjens, generalmanager at AlfahGmbH, a smallspare parts distributor located in Cologne, Germany. “You’ve got to provide impressive customer service and competitive prices or else the customer will sim-ply go elsewhere. Without these two, there’s little loyalty.”With just 12 employees Alfah sources parts from major automotive suppliers such as SBS Germany and sells them on to small automotive repair shops in the region.

Rapid responseBefore it implemented auto-gration this buying and selling service was highly manual. The firm would receive a call from a local garage asking for a spe-cific part. Alfah would then have to ring the supplier to find out the availability and price of the part or

other alternatives. This could involve several calls as Alfah negotiated the availability with the supplier while the mechanic would have to wait patiently for a response – or try several other parts distributors at the same time. Now, with auto-gration, the mechanic gets an imme-diate response. Alfah simply inputs the requested part number and the related supplier into its ordering software. The ordering software then automatically sends an auto-gration availability request through the TecCom platform over the internet to Alfah’s parts supplier. Alfah’s suppliers also use the TecCom ordering software and will automatically inform the company whether the part is in stock so Alfah can immediately provide the customer with a price and delivery time. The implementation of auto-gration has helped Alfah to increase its supplier base because it is now able to connect with any supplier that also uses the TecCom platform. And from entirely manual, phone-based sourcing, today only 20% of the company’s enquiries are done manually.

AlfahGmbH Saving time, serving customers

I n t e g r a t i n g A u t o m o t i v e - c a s e s t u d i e s

Auto-gration cuts manual data entry by 80% at German spare parts

distributor Alfah.

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CASE STuDy 1

C a s e s t u d i e s

“TecCom’s automatic online availability queries reduce errors and ensure we get quantities, prices and parts numbers right. Best of all, the changes in our systems have been virtually invisible,” Mr Veltjens remarks. “Our ordering system now connects through TecCom automatically with the stock catalogues of our suppliers so we have immediate access to their parts availability and prices. We have cut the time it takes to complete an order by 60 -70%.”

SatisfactionMr Veltjens says customers seem to be more satis-fied with their service because Alfah now responds more quickly and more accurately to their requests. “Our customers no longer think about calling our competitors while I am checking the availability of a part. I’ve got an answer before they have the chance to go elsewhere.” This noticeable improvement in customer service is now beginning to lead to a higher volume of orders for the company.

Although Alfah implemented auto-gration as part of the project’s Early Adopter Programme, Mr Veltjens is so convinced by the new system that he is already planninghisnextmove.Heplanstouseauto-grationto process orders and enable reverse messaging so that Alfah can further optimise its electronic pro-cesses. “We have no doubt that auto-gration makes a big difference to the everyday business processes that typically take up so much time. Electronic supply chain integration using auto-gration is so simple yet it has transformed our company. And we are passing this competitive advantage on to our customers and keeping them in business too.”

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At first glance you might think that Deca is pretty clued up when it comes to

e-business. This Italian car-parts wholesaler and dis-tributor uses enterprise resource planning software and subscribes to TecCom’s B2B service to facilitate electronic ordering with its suppliers. Indeed, manag-ing director Roberto Musitelli reckons that 97% of his company’s orders are sent electronically.Yet it is all still a bit of a fiddle, he admits. Employees create orders in Deca’s ERP system, but they then have to export the file and manually upload it to TecCom’s Tec Local communicator before it can be transmitted to the supplier. More time is taken up when the supplier sends ‘reverse messages’ – order acknowledgements, despatch advice or e-invoices – back to Deca; someone must manually match any incoming message to the original order and input the information into the ERP.

“Through TecCom we already have EDI connectivity with our biggest suppliers,” says Mr Musitelli. “I would say around 90% of our internal business processes are electronic, but not automated. Now we want to speed up the ordering process and avoid the errors that arise from manual systems. We’ve got our ERP, we use TecLocal, but we wanted to join them up. Sending orders and monitoring their status directly in our ERP would make a massive difference.”

IntegrationDeca’s ERP provider, Idea Informatica, adapted its software so it would connect directly through the internet to TecCom’s platform. Idea Informatica used TecCom’s software development kit (SDK) which is based on auto-gration’s message structure and web service to connect Deca to the TecCom platform. With this implementation TecCom provides a bridge between Deca and Bosch, one of its largest suppli-ers. The two companies are now able to handle a

Gruppo DECAE-business made easy


Deca discovers the benefit of seeing real-time stock availability from

within its own ERP software.

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CASE STuDy 2


variety of EDI messages. For the first time Deca can request the availability of parts directly out of its ERP system and Bosch can automatically respond with information on items in stock. “We have imme-diate answers, which is fantastic for our customer service as well as our business planning,” explains Mr Musitelli. “Without auto-gration this kind of EDI integration could have been a major and expensive project. But with auto-gration TecCom could join us up very easily.“By integrating our ERP software into the TecCom platform we now use just one interface; all the EDI messaging is automated in the background, we just don’t have to worry about that part, all the informa-tion we need is at our fingertips.”

Encouraging uptakeMr Musitelli hopes that his company may be able to offer a similar service to its customers and extend the benefits of EDI to the next level of the aftermar-

ket supply chain. “We can tell in an instant whether Bosch has a part in stock and when they could deliver an order to us. About 80% of our customers are workshops – pretty small organisations that prob-ably won’t want to implement EDI. But it wouldn’t be that difficult to create some kind of web catalogue which would let them see availability and delivery dates online and let them order that way. I think some garages would find this really useful and would see it as good-value customer service.”

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If you are drawn to strange curiosity shops and unusual exhibits then

you must visit the town of Oyonnax in France. About an hour’s drive from Geneva and sitting at the edge of the beautiful High Jura, here you will find theMuseum of Combs and Plastics. You’ll have to browse the museum to find out how Oyonnax became famous for its combs, but the impor-tance of the plastics sector is still plain to see: this is ‘PlasticsVallée’.Hometomorethan1500companiesin the sector, the area around Oyonnax is dotted with industrial units involved in all stages of plastics pro-cessing and manufacturing, from mould production and polymer processing to finishing and recycling.Founded in 1927 Marmillon has grown into a €30 mil-lion business with 250 employees. Around two-thirds of its sales come from the automotive sector. From bumpers to mirror mountings, headlight reflec-tors to radiator grilles, Marmillon moulds hundreds of car parts and components. It supplies around 180 customers including many of the big Tier 1 brands such as Valeo, Plastic Omnium and Faurecia and some direct sales to OEMs like Renault.

EDI essentialsThere is little rest for the presses and machine oper-ators: every week Marmillon receives around 500 orders – some 25 000 order lines. It sounds like a massive paper chase, but thankfully the vast major-ity of orders arrives electronically using EDI via the eBusiness eXpert EDI station.Marmillon has used EDI for more than a decade. So why bother with auto-gration? “There were many good reasons for using auto-gration, it fitted with many of our strategic business objectives,” explains Sylvain Bravoz, Marmillon’s CIO. “First, we wanted to lower the costs associated with the VAN, or Value Added Network, connections and having to translate EDI messages so the data would be compatible with our internal ERP SILVERPROD platform. We also real-ised that our key customers, the Tier 1 and Tier 2 suppliers in the automotive supply chain, would sooner or later ask us to be auto-gration compliant; so why not get in early and install auto-gration now? It looks good to be a frontrunner; it proves we are forward-thinking and innovative.”

Marmillon Breaking the SME mould


French plastics processor Marmillon becomes an auto-gration

ambassador.

14

CASE STuDy 3


EnthusiasmMr Bravoz is delighted with the results so far. “It only took half a day to install the auto-gration connec-tor. We will continue to test the system in parallel with our existing EDI set-up for a while, but our IT department is very pleased because auto-gration effectively by-passes the need for an EDI translator. And our sales administration, most of which was still done manually, has been reduced massively – in fact we have now moved our sales administrator over to actual sales which will be great for business growth. We have saved ourselves a full man-day per week by eliminating manual order entries.”“We are also reducing the costs to the company associated with errors in ordering,” Mr Bravoz con-tinues. “Mistakes are easy to make when you input manually. The cost of having to pick up wrong parts and redeliver correct ones can run into thousands of euros. But auto-gration makes it easier to run reli-able ‘just-in-time’ operations.”Auto-gration has also improved internal data exchange. The company’s manufacturing site in Slovakia previously had no EDI connection with its parent company in France, but the deployment of auto-gration means that orders, invoices and deliv-ery notes issued by the Slovakian base are now fully integrated into Marmillon’s ERP systems.

Fuelled by auto-gration’s clear return on investment, Marmillon wants to offer the benefits of EDI to its own supplier base. “We actually have more suppli-ers than customers. We don’t just buy a load of raw material and plastics compounds from a chemical supplier,” Mr Bravoz explains. “Many of our products have other inserts and components, like mirrors or metal parts which we have to buy in. Most of our suppliers are small so purchasing these parts and materials is extremely time-consuming and manual as they are not set up for e-business.”

Auto-gration ambassador“We will now work to deploy auto-gration with our supplier base,” notes Mr Bravoz, “starting with those that have ERP software which is compatible with auto-gration. Auto-gration means they can have EDI at a much lower cost than ever before and will have much better visibility of our requirements and pro-visional orders. In return we will know when orders have been despatched and will automatically receive electronic invoices. Auto-gration is a more efficient EDI that is cheaper and a win-win for us and all our business partners.”

15

Situated somewhere out-side Paris, somewhere near Orleans, not far from the A10 motorway

to Bordeaux; you might be forgiven for thinking that Ripoche Industries is a little bit out on a limb.But with a turnover of €8 million and more than 50 employees, the company does not seem to suf-fer from its somewhat rural location. If you enter reception, or wander around the offices, everything looks quite normal. People are busy tapping away at their keyboards. From their terminals, the warehouse staff get lists of what they need to pick and pack. The manufacturing plant has welding robots, cutting presses and precision milling, tooling and assembly machines.But Hervé Ripoche, CEO, is the first to admit thathis company was behind the times when it came to e-business. “You see all these stories and case stud-ies about the magic of e-business, how it transforms companies and saves them millions. Well, we were typical of so many SMEs. We do what we are good at and somehow those e-business projects just never happen.”

Although the company has a powerful internal ERP to manage its affairs, it relied on mail and fax for its ordering and sales administration – 100% manual. Every incoming or out-going order would have to be entered manually into the ERP – with inevitable and sometimes costly mistakes. “Put like that it seems quite ridiculous,” Mr Ripoche admits. “We knew we needed to use EDI with our clients, and we are cer-tainly aware that our manual systems were far too expensive.”

Plug and playSo when Mr Ripoche heard about auto-gration he jumped at the chance to get involved. “It sounded almost too good to be true: cheap, easy and quick to deploy, with connectivity to any EDI-enabled trading partner, even our smallest suppliers. From nothing we could be up there with the best of them!”Mr Ripoche was equally amazed when it took just two days to get up and running with auto-gration and connect to its customers via the TX2 Concept B2B service. The installation of the auto-gration con-nector and an ERP adaptor took one day and was

Ripoche IndustriesNever too late for digital

Ripoche Industries transforms its business with auto-gration in just

two days - and immediately saves a day’s admin per week.

16

CASE STuDy 4



performed remotely. Another day was spent testing the integration and training staff on how to set up provisional and confirmed orders into the ERP for EDI transmission. “We decided to go live at the end of that second day,” Mr Ripoche smiles.

Immediate improvementsFrom sifting through strings of emails and faxes, now the sales administration team has been redeployed to more value-added tasks. From the very first day of auto-gration Ripoche has saved one fulltime equiva-lent day per week. “When all our automotive partners are ready and connected, 70% of incoming orders will be transmitted automatically, the rest – from our non-automotive customers – will still be processed manually.“We have much better visibility of the supply chain and the orders of our customers,” continues Mr Ripoche. “We can see provisional and firm orders,which has really improved our production planning. It is much easier to decide when to stock-pile and when to run production to fulfil specific orders. We are cutting operational as well as admin-istrative costs.”

A growing marketHeisconvincedthatauto-grationwillpromotebusi-ness growth. “Some of our customers have threat-ened to leave us and switch to an EDI-enabled sup-plier. Now with auto-gration we are providing them with the level of customer service they expect. We have retained customers, and we will also work to develop new ones, such as OEM clients for whom EDI is mandatory.”The company now wants to use the full auto-gra-tion architecture across its business, to facilitate the exchange of despatch notes, invoices and stock movements with sister companies, sub-contractors and its own network of suppliers. “The easiest way to do business with us will be with auto-gration,” he asserts. “We are going to be champions of e-business!”

17

In today’s eco-conscious world, car-makers are con-stantly looking to make

their vehicles greener: more efficient engines, more recyclable and recycled components, lighter, more robust materials. Plastic is also an excellent material for reducing the weight of a car, but it will never replace metal entirely. In particular, the use of specialist alloys and lightweight aluminium is gaining ground.Barcelona-based Ruffini specialises in high pressure aluminium die-casting. Aluminium is smelted, then injected into moulds to form intricate metal parts commonly found in cars and domestic appliances.Almost 90% of the company’s sales are direct to car-makers or parts manufacturers and suppliers in the European automotive sector.

Nothing new?“Dealing with many of the big brands in the sec-tor, we have used EDI for some time. Around 90% of orders from our automotive customers use EDI,” remarks Martin Lutjen, International Account Manager at Ruffini. “But different customers use dif-ferent EDI standards, such as Edifact and VDA, and we couldn’t possibly maintain and translate between multiple EDI systems. So we use a B2B service pro-vider which acts like our link and translator between all our EDI-enabled customers.”Ruffini has already integrated its EDI processes into its ERP, ABAS Business Software implemented by its Spanish partner ABAS Ibérica. “I guess you could say we are pretty clued up on EDI,” admits Mr Lutjen, “but auto-gration promised something more: cost sav-ings, higher productivity and, perhaps most impor-tantly, a system which would be easy for our own suppliers to adopt too.”

Ruffini The die is cast... for auto-gration


Spanish metalworking firm Ruffini discovers that auto-gration benefits

its lean operations.

18

CASE STuDy 5


The idea that Ruffini deploys EDI for its own suppliers is a big one; today it requests raw materials or sends orders to the vast majority of its 20 or so suppliers on paper. “We can see the benefits of digital integra-tion across the supply chain,” says Mr Lutjen. “If we could also automate our own ordering processes we could become so much more efficient in our adminis-tration. Our suppliers would profit from it too. I don’t think it will be too hard to persuade them.”

Cautious progressNevertheless, while the dream is big, Ruffini took a cautious approach, testing the auto-gration architec-ture with just one EDI message – the delivery sched-ule message, known as DELFOR, coming from one customer, Volkswagen. The biggest job fell to Ruffini’s software vendor ABAS, which had to integrate the auto-gration message into the ERP and make the data accessible from within the ERP interface. “Still, they were glad to assist,” Mr Lutjen remarks. “Enabling auto-gration in their software is a selling point for them too.”

Despite some initial reluctance among staff who thought that auto-gration was just duplicating what the company did already, feedback has been extremely positive. “Using auto-gration we are actu-ally able to deal with orders faster. It works just as well as our existing EDI system and we can see VW’s order lines in real time which helps us run lean operations,” MrLutjen’senthuses.Healsoestimatesthat auto-gration will deliver about 30% time sav-ings over their current EDI processes – a major sell-ing point for switching to auto-gration.Ruffini expects to deploy the auto-gration system with other EDI messages in the very near future. Mr Lutjen thinks that the company will also become an ‘auto-gration ambassador’ and encourage its own suppliers to adopt the architecture. “Automation and real-time data offer a major competitive advantage for any business,” he asserts. “Why would anyone not want to adopt auto-gration?”

19

With auto-gration the European automotive sector has a unique and unrivalled opportunity to establish a fully digital value chain. Auto-gration provides the common framework which would allow every company – from the multi-national brands to the one-man garage mechanic – to communicate and interact within a single connected network.The auto-gration framework is a robust and dura-ble solution which will improve the competitiveness of Europe’s automotive industry and ensure that SMEs can easily enjoy the benefits of information technology and EDI and become even more efficient players in the value chain.

The auto-gration architecture is the outcome of a demonstration action funded by the Directorate General of Enterprise and Industry under the CIP (Competitiveness and Innovation Programme). It is endorsed, supported and further expanded by indus-try associations across Europe. The industry is com-mitted to continue working to support the adop-tion of the auto-gration framework throughout the automotive value chain.

Committed to connect

N e x t s t e p … m a r k e t a c c e p t a n c e20

It is possible for SMEs to get up and running with auto-gration in less than a day – all you need is an internet connection. Contact your ERP vendor, B2B provider or visit www.auto-gration.eu to find out how.

The auto-gration consortium

The auto-gration project would like to thank the following com-panies and organisations for their active participation in the Early Adopter Programme and for their invaluable feedback on the auto-gration architecture:

List of companies actively involved in the EAP

AD GRUPO REGUEIRA S. A. ESAD Marina Automoción S.L. ESAlcorta Forging Group S.A. ESAlfahGmbH DEAlmacen de Recambios Paher S.A. ESAMHAteliersMécaniquesd’Hauterive SAS FRANDEL AUTOMOCION S.A. ESAnixter France SARL FRAteliers Mécaniques de Saucourt (AMS) SAS FRATPAuto-Teile-PöllathHandelsGmbHDEAUTEIDE S.A. ESAuto Recambios Euce S.L. ESAuto Recambios Europa S.A. ESAuto Recambios Lomena S.L. ESAuto Recambios Penalver S.A. ESAUTORECANVI SEGRE S.L. ESAZ Auto SA PTBowden SAS FRCECAUTO CANARIAS S.A. ESCECAUTO CENTRO S.A. ESCECAUTO LEVANTE S.A. ESCECAUTO MLG S.A. ESCECAUTO NORTE S.A. ESCECAUTO SUR S.A. ESCECAUTO S.A. ESChisari S.p.A. ITClas Equipements SAS FRCOTOCAR, S.L. ESDaf Trucks N.V. NLDeca S.p.A. ITDemauto S.p.A. ITDG Industries E.I. SAS FR

ECS Electronics B.V. NLEMMS S.A. ESEQUIPAMOVIL S.A. ESEra S.n.c. ITEresa Automocion S.L. ESEstablecimientos Coll S.A. ESEUMA S.L. ESF. Marmillon SAS FRFLICK COMERCIAL Y MAQUINARIA S.L. ESFRANCISCOSALASEHIJOSS.L. ESFRENOS CORUNA S.L. ESG.Campanale & C. S.p.A. ITGesalimo S.L. (Recamer) ESGrupo Pena Automocion S.L. ESGrupo Pena Automocion sl - Auto Sport Andalucia S.L. ESGSAuto Recambios S.L. ESI.DI.R. S.p.A. ITIndustrias Roes S.A. ESIntermobil Otomotiv Mümessillik ve Ticaret A.S. TRIzmir Oto Tic. Ve San. Ltd. Sti. TRLeJointTechniqueSAS FRMafecar S.L. ESMAYOR CATALANA S.L. ESMAYOR LEVANTINA S.L. ESMAYOR RECAMBIOS S.L. ESMCM Van de Mortel B.V. NLMercambios S.L. ESMERCURIOHANSESSEREHIJOSS.L. ESMicar GS Auto Recambios S.L. ESNeko Otomotive Ltd. Sti. TROdak Oto Yedekleri İth. İhr. San Ve Tic. Ltd. Sti. TROvam S.p.A. ITProvein ESRadiadores Palacios S.A. ESRecambios Colon Catarroja S.A. ESRecambios Frain S.L. ESRecambios Industriales Moleon S.A. (Rimosa) ESRecambios Montero S.A. ESRecambios Santiagueses S.L. ESRenault SA FRRepuestos Algesur S.L. ES

REPUESTOS POSADA S.L. ESRipoche Industries SAS FRRuffini S.A. ESSacorauto ESSatorHoldingB.V. NLSilveste Autoparts S.L. ESSilvestre Autodistribucion S.L. ESSMI Poland Sp. z o.o. PLTecoplast PM Slovakia s.r.o. SKVARONA 2008 S.L. ESVEMARE S.L. ESVignal Systems SAS FRVilella Distribucion 3000 S.A. ES

B2B

eBusiness Expert FRGOLDA/TecCom FRINDRA ESNumlog FROMS International NLTecCom DETENOR EDI Services FRTX2 Concept FR

ERP Vendor

ABAS Software ESAGP NLBlusys ITCEGID FRCISA Informatique FRDeltec NLGALION Solutions FRIdea Informatica ITINFODEV FRInforap PTInformatica Centro ITISI Condal ESOctopus DKProger ITSage DE, ES SILVERPROD FRSkrit ES

T h e E A P 21

The Early Adopter Programme

More infoAuto-gration: www.auto-gration.euDG Enterprise and Industry: ec.europa.eu/enterpriseEuropean eBusiness Support Network for SMEs: ec.europa.eu/enterprise/sectors/ict/ebsn/index_en.htm

ISBN 978-92-79-23361-6

NB-30-12-467-EN

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Documents

Integrating Automotive · 1 Get SMEs connected in smart digital automotive supply chains European small and medium enterprises and the un-precedented challenges facing them today