In December last year I posted a blog relating to a new study from OpenText that was conducted by IDC Manufacturing Insights. The main goal of the study was to see if there was a direct correlation between B2B integration and how it impacts supply chain performance.
The study covered three industry sectors including automotive, high tech and consumer product goods (CPG). For the purposes of this blog article I wanted to spend a few minutes reviewing the results from the automotive related respondents to the survey. We recently hosted a webinar with IDC to discuss the findings from the study. You will be able to get access to this and other downloads related to our study at the end of this blog.
The survey relating to this study covered all the major automotive manufacturing hubs around the world, including Japan, China, North America, Brazil and the UK as OpenText wanted to obtain a truly global view of how B2B solutions were being deployed across the industry. I would like to now discuss some of the more important B2B integration results from the study that relate to the automotive industry.
- 76% exchange B2B transactions electronically – the automotive industry needs to support a network of global trading partners and it is therefore important to be able to exchange B2B transactions electronically. Whether working with a casting manufacturer in China or a plastic housing manufacturer in Brazil, being able to onboard global suppliers and ensure that information can be exchanged electronically, irrespective of technical capability, is a high business priority for many automotive companies.
- 67% exchange information collaboratively and in real time – the automotive industry relies on numerous partnerships including those with outside contract manufacturers and design consultancy firms and hence it is important to be able to exchange information seamlessly and in a collaborative fashion with these key partners.
Time to market in the automotive industry can provide a key competitive advantage and being able to exchange information in real time helps to support this particular corporate initiative.
From a manufacturing point of view, Just-in-Time production systems rely on the timely delivery of Advance Ship Notice (ASN) transactions from key suppliers, therefore having a highly available B2B integration platform in place is critical to the reliable delivery of these transactions.
- 59% said that B2B integration had reduced inventory levels – being able to connect globally diverse business systems to a common B2B platform helps to improve end to end visibility of business transactions. Providing access to a common B2B platform means that manufacturers have improved inventory visibility across global production and distribution facilities.
- 44% said that supply chain complexity was a key barrier to improving B2B integration – the global nature of the automotive industry, combined with the complex nature of the products being manufactured, namely vehicles, means that it can sometimes be difficult to roll out new B2B integration projects in a timely manner. Car manufacturers are starting to introduce more global vehicle platforms, and this has helped to reduce the number of parts in a vehicle, which has the knock on effect of simplifying the supply chain. Working across different geographies, cultures and time zones means that companies need to partner with a B2B provider that can truly support their global operations. OpenText is the world’s largest provider of cloud based B2B integration services.
- 43% said their reason for adopting B2B integration was mandated by customers – many automotive suppliers around the world are asked to exchange B2B transactions electronically by their customers. In many cases being able to trade electronically is a condition of doing business with their customers. Large car manufacturers such as Ford insist for example that ASNs are exchanged within a relatively narrow window and the only way tier 1 suppliers can do this is to exchange ASNs electronically.
- 62% had fully integrated their B2B and ERP systems together – another study conducted by OpenText showed that over a third of information entering ERP comes from outside the enterprise. So having tight integration between a B2B and ERP system is crucial to the smooth operation of today’s automotive production environments and the new IDC study reconfirms this. If transactions entering ERP can be automatically checked to ensure that only up to date and accurate information enters ERP then it will help to reduce downstream rework of information and prevent inaccurate information entering other production systems. Incorrect information could potentially bring production to a halt.
The study showed that the automotive industry has a high proportion of ‘focused adopters’ of B2B integration solutions due to some of the unique automotive production processes that need to be supported. The shift in focus towards ‘preferred relationships’ across the industry has driven, over the years, a significant improvement in the quality of IT systems, and as such many automotive companies are exchanging information collaboratively and in real-time with their key trading partners. This is an essential feature to help reduce inventory costs and speed up their time to market.
Finally, IDC asked automotive companies which new technologies such as cloud computing, mobile, big data and social media would see exponential growth in the future and big data came out on top. It is no surprise big data had such a positive response due to the sheer volume of information flowing across today’s automotive supply chains.
We also took the opportunity of asking the survey respondents which emerging technology trends such as the Internet of Things, 3D Printing, Advanced Robotics and Wearable Devices would lead future investment priorities and as expected 3D Printing came out on top. 3D Printing is one of the most disruptive new technologies and has the potential to reshape the automotive supply chains of the future. In some cases we may see ‘zero length supply chains’ being introduced on the back of 3D Printing technologies. This is an area that I will be looking at more closely in a future blog entry.
If you would like to download your own copy of the new B2B study from OpenText then please complete the registration form. When you have registered you will also be able to get access to an on demand webinar that we recently recorded with IDC,a copy of the webinar slides and an infographic that illustrates some of the key findings from the study.