DETROIT – By the middle of September,Corp., Johnson Controls Inc. and Corp. will interact with 10,000 of their suppliers with a standard communication tool that promises to be fast, secure, inexpensive and simple to use.
Covisint Connect is a data-messaging service that could replace traditional electronic-data interchange (EDI) connections.
The auto industry has used EDI for 30 years to communicate material release schedules and advance shipping notices from company to company.
But after 30 years in use, EDI – unlike today’s ubiquitous e-mail network – lacks standardization. Auto makers and the top 100 suppliers have customized their own EDI systems and frequently change them. A supplier serving five auto makers, for instance, can struggle to remain current with each customer’s EDI system.
“GM uses one format and one connection, while DaimlerChrysler uses a different one,” Covisint spokesman Paul Manns says at this week’s Auto-Tech automotive conference here.
The EDI system also has been unreliable. A supplier routinely sends a shipping notice to its customer when parts have been shipped. On a weekly basis, however, trucks can be found circling auto maker or supplier plants because the shipping notice did not arrive at the customer’s plant before the truck. Without the shipping notice, the truck is not allowed entrance, Manns says.
Covisint, which was created three years ago, is launching the messaging service with the help of GM, Lear and, as well as Motor Co., DaimlerChrysler Corp. and Corp. In February 2003, Detroit’s Compuware Corp. purchased Covisint from the auto makers that created the private Internet portal for the auto industry.
Today, portal users comprise the bulk of Covisint’s revenues, but the company expects messaging to account for about 50% in the near future.
began using Covisint Connect with its 2,000 suppliers as of July, and soon will be fully operational with its 2,000 suppliers. Since spring, GM has been working with its 6,000 suppliers in preparing them to use the system. By the middle of September, GM plans to “flip the switch” and have the system fully operational, Manns says.
GM, JCI and Lear are using the messaging service for shipments of parts to their North American facilities because it simplifies the communications link with suppliers. JCI, for instance, was using “value-added networks” to send shipping notices to its customers, and each network was unique from plant to plant within JCI.
All a supplier needs to use Covisint Connect is a web browser. GM says the messaging service is easy to use, even for suppliers with no EDI experience.
GM is paying the full cost for its suppliers to use the new messaging service; Lear and JCI are paying half the cost, with the other half covered by the suppliers, Manns says.