THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN
ARC INSIGHTS
By Robert Mick
Integration of businesses and applications
ha...
ARC Insights, Page 2
©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
duction. Consequently...
ARC Insights, Page 3
©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
Delivery strategies a...
ARC Insights, Page 4
©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com
Software Suppliers Ar...
Upcoming SlideShare
Loading in...5
×

Auto Industry Leverages OAGi Integration Standards

325

Published on

Auto Industry Leverages OAGi Integration Standards
The auto industry, with slim margins and a large value chain, envisions
moving toward a make-to-order operation.
However, customer driven manufacturing requires
high levels of integration among suppliers,
partners, customers and production applications.
Facing applications integration on a large scale,
auto manufacturers, through the AIAG, are partnering
with OAGi as an essential element of their
integration roadmap.
Integration of businesses and applications
has become necessary to achieve
customer driven manufacturing. The auto
industry is facing applications integration
on a large scale to achieve its vision, and
is partnering with OAGi as an element of
its integration standards landscape.

Published in: Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
325
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Auto Industry Leverages OAGi Integration Standards"

  1. 1. THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN ARC INSIGHTS By Robert Mick Integration of businesses and applications has become necessary to achieve customer driven manufacturing. The auto industry is facing applications integration on a large scale to achieve its vision, and is partnering with OAGi as an element of its integration standards landscape. INSIGHT# 2003-36E SEPTEMBER 3, 2003 Auto Industry Leverages OAGi Integration Standards Keywords Automotive, Discrete, Integration, EAI, AIAG, OAGI, OAGIS, ebXML Summary The auto industry, with slim margins and a large value chain, envisions moving toward a make-to-order operation. However, customer driven manufacturing re- quires high levels of integration among suppliers, partners, customers and production applications. Facing applications integration on a large scale, auto manufacturers, through the AIAG, are part- nering with OAGi as an essential element of their integration roadmap. Analysis The auto manufacturers are continually striving to reduce costs, improve time to market, and move to a make-to-order model. The industry contin- ues to go though tough times with cost cutting as the most dominant business priority. Furthermore, changing quality and reporting regulations require more accountability and traceability for manufacturers and their suppliers, making cost cutting even more difficult. Time to market has become critical for auto companies to be successful. This has led to the development of sophisticated product simulation tech- niques to eliminate expensive and time consuming prototyping. It has also made collaborative design and development processes more important. Today the auto industry makes products to forecast and places it in distri- bution centers and dealers. Customers are matched to product by dealers and this is fine as long as an acceptable product is within reach – otherwise the buyer moves on. The vision is to avoid this loss of a sale by being capa- ble of quickly delivering what the customer wants – either out of stock or production. For this to occur, manufacturers must have good visibility into distribution and must be able to respond very rapidly to changes in pro-
  2. 2. ARC Insights, Page 2 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com duction. Consequently, supplier response to changes and optimized logis- tics will take on an even higher level of significance. The Automotive Vision Makes Integration a Technical Priority Lean manufacturing processes require rapid supplier response, enabled by fast and accurate communications. Furthermore, customer driven manu- facturing strategies raise the requirement, making paper systems inadequate. As a result, performance metrics could eliminate some suppli- ers because they are not capable - or can not afford - the investment of independent implementations with EDI level complexity. Integration in the auto industry is not new. Companies continue to successfully use EDI broadly for production materials. While many auto industry suppliers still use paper systems, there is a migration to more cost ef- fective, internet-based integrations. These are required to include many of the less sophisti- cated lower levels of the multi-tiered supply chain. Auto industry organizations, including AIAG (Automotive Industry Action Group) and AAIA (Automotive Aftermarket Industry Association) recognize that the lack of integration precludes con- tinuing cost reductions and customer driven business models. Consequently AIAG and AIAA are partnering with the OAGi (Open Appli- cation Group, Incorporated) to support standards for interoperability between business systems, suppliers, production, customers, logistics, etc. The Standards Landscape - No Single Standard Is Sufficient The adoption of standards is an obvious good practice, but it is far from easy. There are many standards bodies with overlapping and competing objectives and approaches. This complexity is compounded by the relative maturity of various standards and their relevance to current technologies. A consistent method of talking about and comparing standards is needed. (See the figure below.) Terminology and models are typically specific to a vertical industry segment. Architectures, processes, and documents (mes- sage contents) are also quite industry specific but some elements (such as a purchase order) can be applied to almost all industries. Standards Are Critical for Supplier and Customer Facing Integrations Production Design Logistics Business CustomersSuppliers
  3. 3. ARC Insights, Page 3 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com Delivery strategies and physical transports are almost always generally useful, though some industries may consider some unacceptable. Similarly, there are large volumes of support- ing standards (XML for example) that can be leveraged for any vertical industry’s standards development. More recently service, interface, and message definitions (meta-data) have been stored in standardized registries to facilitate the management of integration elements for a broad range of applications across versions. OAGi Focuses on Architecture, Processes, and Documents OAGi is a non-profit consortium focusing on best practices and processes for e-business and application integration. OAGi has been around since 1995, consisting of a blend of end user organizations, integration software suppliers, and application suppliers. It has active participation by large automotive OEM’s. The OAGi core body of work is OAGIS (Open Applications Group Integra- tion Specification), now at version 8.0. OAGIS defines architecture, documents and processes for general business functions. The architecture includes business object documents (BOD) made up of “Nouns” and “Verbs.” Nouns represent objects and Verbs are actions. As detailed in the table to the left, OAGIS covers the upper levels in the standards model for suppliers, pro- duction systems and customer interactions. It does not cover the delivery or physical transport func- tions. OAGI relies on other standards for delivery and offers de- scriptions about how this can be accomplished over ebXML (OAGIS), RosettaNet, and BizTalk Framework. Processes Documents GeneralStandards Delivery Physical Transport Terminology and Models DiscoveryandManagement Interfaces Messages Architecture Standards Bodies Typically Focus on Part of the Functional Landscape Area Used Nouns (objects) Supplier RFQ, Quotes, Purchase Orders, Requisition, Credit Status, Invoice, Inventory Con- sumption, Delivery Receipt, Electronic Catalog, Price List Sales and Financial Sales Order, Product Availability, Chart of Accounts, Actual Ledger, Payable, Em- ployee Time, Work Schedule Production Production Order, Costing Activity, Mainte- nance Orders, Eng. Change Order, Bill of Materials, Inventory, Consumption, Pick List, Item Master, Dispatch List, Sequence Schedule, Shipment Schedule, WIP Verbs (Applied to Nouns) Add, Allocate, Cancel, Change, Confirm, Get, Get List, … , Show Update, Sync OAGIS BOD Are Messages Comprised of Nouns (Objects) and Verbs (Actions)
  4. 4. ARC Insights, Page 4 ©2003 • ARC • 3 Allied Drive • Dedham, MA 02026 USA • 781-471-1000 • ARCweb.com Software Suppliers Are Helping A large number of software suppliers have been active in OAGIS efforts, including several end user pilots. In ad- dition to suppliers who are organizational members, ERP suppliers who have been involved include Baan (SSA), Geac, Ora- cle, PeopleSoft, and QAD. SAP was a founding member. Intercim, iBASEt, In- vensys, and Indus are examples in the other application areas that support the standards efforts. Covisint, the automo- tive e-market, has also added momentum by adopting OAGIS. Auto Manufacturers Point to OAGIS and ebXML Several of the automotive manufacturers are looking at their future archi- tectures and OAGIS as part of their plans. Ford has been an open supporter and active participant of OAGIS activities using ebXML as the delivery and transport. General Motors has presented its future architecture at OAGi meetings and has pointed to Web services, ebXML and OAGIS BODs. Recommendations • The development of a complete standards architecture and develop- ment of all associated elements will take several years. OAGIS is one of the more mature elements. It is important that all automotive industry participants support and contribute to the evolution of OAGi efforts to help it evolve in line with urgent business needs and new technologies. • Other industries should look closely at the AIAG approach and OAGIS specifications to leverage the general standards where possible, focus- ing new efforts on industry specific needs. Please help us improve our deliverables to you – take our survey linked to this transmittal e-mail or at www.arcweb.com/myarc in the Client Area. For further information, contact your account manager or the author at bmick@arcweb.com. Recommended circulation: All EAS clients. ARC Insights are published and copyrighted by ARC Advisory Group. The information is proprietary to ARC and no part of it may be reproduced without prior permission from ARC. Business Examples Organizations AIAG, AIAA, OAGIS, OMG, NADA, NIST Auto OEM Daimler-Chrysler, GM, Ford, Toyota Integration Suppliers IBM, iWay, Mercator, Oracle, Sterling Commerce, Sun, TIBCO, Vitria, web- Methods, XML Global, Contivo End Users, Suppliers, Integrators Several other organizational and indi- vidual members OAG Organizational Members

×