This presentation provides a brief overview of the key business challenges facing the automotive industry today and how GXS helps companies address these challenges via GXS Trading Grid, the world’s largest cloud integration platform. The presentation also provides a few short case studies on how companies are using GXS solutions.
One of the biggest challenges facing companies today is trying to integrate a broad cross section of different users, especially those users that may be located in different countries around the world.In recent years many companies have globalised their operations, opening new manufacturing plants in the Far East and establishing new sales offices and distribution centers in new markets. Many companies have implemented multiple instances of ERP systems around the world and a typical ERP related project being undertaken today is to try and consolidate multiple ERP instances into a single instance that can be shared by everyone across the extended enterprise. Many B2B platforms have users or trading partners around the world and in many ways it makes sense to try and obtain operational synergies by integrating ERP and B2B platforms together. Consolidating multiple ERP instances for example provides the ideal opportunity for B2B integration. So we have already talked about consolidation of ERP instances, but what other types of ERP related projects would make good B2B integration opportunities?
The global automotive industry has emerged from a tough couple of years however consumer confidence is returning and cars are once again selling around the world. North America has made a surprise recovery and has seen considerable inward investment in the first quarter of 2012. Honda, BMW, Audi, Nissan to name but a few have committed to build new plants or expand production in North America and Mexico. There is also a continued drive to expand into the emerging markets with China, India, Brazil and Russia continuing to see significant inward investment. Increasing wage demands and strikes in China is seeing some companies establish a manufacturing presence in countries such as Thailand, Vietnam and Indonesia, now becoming known as the second generation emerging markets. Increasing consumer wealth in some markets and a consumer demand to tailor the design of their cars is leading to more build to order production lines being established, these production lines help to considerably reduce inventory levels and waste. Over the past few years automotive companies have decentralised their manufacturing plants in order to better serve their markets and to also help build resilience into their supply chains. Recent natural disasters combined with bespoke consumer requirements in markets such as China has seen design offices being setup outside the car manufacturers’ home market. For example in China consumers prefer to be driven rather then to drive themselves and therefore companies such as BMW and Volvo have established design offices in China to meet these needs and help to introduce long wheel base cars to the market much more quickly. Recent natural disasters have led to many companies looking at ways to increase resilience across their supply chains. For example introducing dual sourcing strategies, near shoring, control towers and even introducing more business continuity managers. Finally the convergence of the automotive and high tech supply chains is leading more companies to want to explore joint venture opportunities with high tech companies, for example in the development of next generation batteries to support the electric vehicle industry.
GXS has been supporting the global automotive industry for more than 40 years now and over this time we have worked with many companies operating across the automotive supply chain. In terms of a presence, GXS works with 100% of the automotive companies in the Fortune 500, 70% of the top 20 automotive OEMs and 85% of the top 100 global automotive suppliers. One of the key things to mention about these figures is that many of these companies are using GXS purely for messaging based services. In fact in recent customer meetings I always ask the question, how do you perceive GXS? And in most cases they will come back and say that we are just a VAN provider. They couldn’t be further from the truth as you will find out during the course of this week. GXS also works closely with the regional industry bodies to ensure that the latest industry requirements are fed into our product development process allowing new features to be added to our portfolio of B2B solutions with ease. For example one of the latest B2B standards to enter the automotive sector is OFTP2, a way to exchange B2B information across the internet using file encryption, digital signatures and a certificate based system to authenticate users exchanging electronic docs. GXS offers OFTP2 as a service for those companies looking to deploy OFTP2 but do not have the resources to implement themselves. The intention is that OFTP2 could become the automotive industries first, truly global comms standard.Finally we offer truly global connectivity by providing inter-connects to a selection of private automotive networks, such as the Automotive Network Exchange in North America, the European Network Exchange and the Japanese Network Exchange. It doesn’t matter where in the world you need to setup a new trading partner or establish a new manufacturing plant, GXS can provide truly global interoperability.The automotive industry folder on Sharepoint is shown at the bottom of this slide.
This slide helps to graphically show tier 1 suppliers connected to their customer via GXS. Jaguar Land Rover is an important Managed Services customer of GXS and this slide helped to initially highlight GXS presence in the automotive sector but more importantly helps to identify how many suppliers are already pre-connected to GXS. One of the more important factors to Jaguar Land Rover signing up with GXS was because a high majority of their suppliers were already connected to GXS Trading Grid, our cloud based B2B integration platform.
Today’s manufacturing industry has some interesting B2B related challenges Continued merger and acquisition activity across the industry is leading to manufacturing companies needing to consolidate multiple or legacy B2B networks across their business on to one common platform. As manufacturers build new plants around the world, there is a continued need to provide connectivity to global manufacturing hubs and trading partners around the world.- ERP systems are at the center of nearly every manufacturing operation and a company can realise significant benefits if they integrate their ERP and B2B systems together.
As manufacturers look to expand into low cost emerging markets they need to onboard suppliers in these regions as quickly and smoothly as possible. Due to limited IT skills in these regions, suppliers must be on-boarded with simple to use and quick to deploy B2B toolsGlobalisation of manufacturing supply chains has meant that it has become more important than ever before to improve visibility into the shipment of their goods, in both the distribution of new goods and shipment of service parts across the aftermarket sector. Finally, recent natural disasters have led to a need to improve the way in which companies respond to supply chain disruptions in order to help increase supply chain resilienceSo let me now briefly discuss each of these in turn.
The global nature of the automotive industry means that cloud computing adoption levels are slightly higher in the manufacturing sector than many other industry sectors. Faster on-boarding combined with quick deployments are two of the reasons why today’s CIOs are keen to look at cloud computing platforms. Jaguar Land Rover’s CIO is very forward thinking and he has plans to place as many applications as possible in to the cloud. Until recently many CIOs saw cloud as being just hype and that it was likely to be a passing IT trend, however they were wrong and software and solution vendors are slowly migrating more of their software based applications into the cloud. GXS operates one of the world’s largest cloud integration platforms with over 400,000 businesses exchanging information on this platform on a regular basis. So what benefits can Cloud computing platforms offer ?
CAPSA = Chang’an PSA Peugeot Citroen
CAPSA = Chang’an PSA Peugeot Citroen
Manufacturing companies are continuing to look for ways to cut costs in order to become more competitive. Increased adoption of B2B helps to:- consolidate legacy B2B infrastructures on to one common platform - provide improved integration to manufacturing systems such as ERP platforms- Improve internal communications between manufacturing plants and external communication to global trading partners- Provide improved visibility into highly profitable aftermarket service parts supply chains- Reduce costs and improve customer satisfaction levels