Global automotive companies are increasingly moving to cloud-based software for communication across international supply chains. Japanese and Chinese automakers show most interest in using cloud platforms as they establish new factories abroad. Cloud systems allow automakers to standardize communication protocols and onboard foreign suppliers. This helps manage complexity in global supply chains and supports large-scale production using shared global vehicle platforms across continents. Chinese automakers establishing factories in countries like Brazil and Russia may drive increased use of cloud logistics as supply chain networks expand internationally. Standard cloud communication could help automakers effectively manage large recalls by ensuring up-to-date supplier contact information is accessible from any location.

1. COMMENT & ANALYSIS - IT
Global platforms move to the cloud
Automotive companies have been
moving to cloud-based software
for regional communication across
the supply chain, from sending and
receiving delivery notifications,
processing invoices and insurance
claims to managing vehicle stockyards.
But cloud-based logistics
communication also has the potential
to serve manufacturing strategies,
including global vehicle and megaplatforms, says Mark Morley, director of
industry marketing for manufacturing
at data integration specialists GXS. He
confirmed that Japanese and Chinese
carmakers are showing the most interest
in using such IT as they build factories
in new markets.
“We have received more requests
from OEMs in Japan who are thinking
of moving to the cloud, including those
looking to setup production in Brazil
and Mexico,” he said. “These carmakers
need help to ‘onboard’ suppliers and get
around in the local culture, language,
as well as B2B [business-to-business]
protocols.”
Since web-based systems can mediate
between the different communications
protocols, Morley believes they are
complimentary to global platform
strategies, as they can be replicated
across supply chains on different
continents.
“Using this kind of software can
create more saleability, flexibility and
less complexity in the supply chain,
which is exactly why carmakers use
global platforms,” he said.
Morley used the example of Chinese
OEMs setting up factories in Brazil
or Russia and needing to connect to
suppliers and logistics providers. “This
is going to be really interesting for
logistics providers as flows increase
out of China, as well as with Chinese
carmakers building up domestic supply
chain networks in Brazil, for example,”
he said.
While Morley pointed to Chinese
manufacturers as the most aggressive
in terms of moving towards cloudbased and paperless communication,
he said Indian manufacturers were
currently among the slowest to adopt it.
“Carmakers in India tend to use many
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different software systems and paper
processes to communicate,” he said.
Know your supply chain
One of the risks of global platform
production is that supply chain failures
could reverberate across hundreds of
thousands, if not millions of vehicles.
The recall this past spring of more
than 3m airbags for Toyota, Nissan
and Honda vehicles was a case in
Asian OEMs are showing most interest in cloud
platforms, says Mark Morley at data expert GXS
point. Morley pointed out that having
a standard communication platform
would be an effective tool in managing
such crises across supplier databases.
“We’re seeing requests for some form
of compliance solution, such as how
you manage supplier contact data,” he
said. “If there is a huge recall issue, then
you have all the supplier details to hand
to reach out to suppliers or identify an
alternative supplier.”
Having ready access to supplier details
seems simple but it is an approach
more manufacturers are waking up to.
This past spring, Toyota Motor Europe,
Jaguar Land Rover and Aston Martin
joined a platform that shares precisely
this kind of data, particularly with the
intention of mapping the lower tier
supply chain (see page 12).
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GXS itself has a system, called Active
Community, which is used to deploy
messages to large communities of
trading partners. If there is a problem,
the system sends out messages to the
entire cloud-based network.
“Sometimes it’s a simple thing like
having the most recent contact details
of people in the business,” said Morley.
“If you have the wrong address of your
suppliers, you could find yourself in a lot
of risk when something goes wrong.” q
GXS believes that a standard communication platform could be an effective tool against crises like the airbag
recall that affected 3m Toyota, Nissan and Honda vehicles this past spring
JULY-SEPTEMBER13