The Role of Global Information Standards in
Electronic Commerce
•Whirlpool Corporation is the world's
leading manufacturer and marketer of
major home appliances
•1998 Sales of $10.3 billion
•Marketed in 170 countries worldwide
The Role of Global Information Standards in
Electronic Commerce
•Production versus MRO
•Global versus U.S. only
•Internet versus VAN versus “Extranet”
•Integrated Supplier Management (ISM)
“EZ-ISM”
Integrated Supplier Management Process
Whirlpool
Supplier
Material
Releases
Update
manufacturing
schedule
Receive
and update
MRP/OM
JIT
Schedule
Build
to
schedule
Ship material
Receive, scan
and match to
ship notice,
process ERS
Shipment
notification
Process
accounts
receivable
Consignment
Receiving
Advice
Drivers
Predicted benefits:
•
•
•
•
•
•
•
•
Total system cost reduction.
Continuous daily production requirements.
Suppliers as an extension of Whirlpool.
Just-in-Time material delivery.
Reduce inventory-raw & inprocess (suppliers).
Simplify receiving.
Reduce manual releasing.
Reduce obsolescence.
Integrated Supplier Management
Rollout Strategy
EC Infrastructure Improvements
Supplier “WEB Page” (Internet) “EZ-ISM”
Team with Manufacturing and
Procurement
Supplier Conferences (ECRC)
Follow through
The Role of Global Information Standards in
Electronic Commerce
EC at Whirlpool:
Transaction Sets in Use
ANSI
X.12
Type
830
DELFOR
856
DESADV
861
RECADV
Material Release (Planning
Schedule w/ Release Capability
Advance Ship Notice (Ship
Notice / Manifest)
Receiving Advice
862
DELJIT
JIT Info (Shipping Schedule)
864
GENRAL
Text Message
997
EDIFACT
Type
Name
Functional Acknowledgement
Description
Created by buyer from MRP II system to order supplies;
specifies required date & quantity, and past receipt information.
Sent from trade partner with complete shipping data to facilitate
receiving process. Can reference many packing slips and barcodes.
Created by buyer MRP II system to acknowledge material transfer of
ownership.
Schedule from buyer to trade partner covering hourly quantities
required at each assembly line for next three days.
Sent by buyer to: 1) broadcast message to all trade partners;
2) describes errors with an 856 message;
3) report discrepancies between received materials & 856 message.
Sent to confirm that message was received by trade partner.
New EC Infrastructure
Existing
Application
Architecture
Varies
New Application
Architecture
SAP
Whirlpool EC
Intranet / Extranet
Existing EDI
Architecture
Mainframe
New EC
Server
Whirlpool
EC Intranet
EDI
Network
VAN
Extranets
This New EC Infrastructure Provides:
- Many-to-Many paths to the existing
and new applications infrastructure
- Leverages the current EDI infrastructure
and provides the EC partners and Whirlpool
a migration path
- A lower cost to support and implement new
EC partners (esp. low volume partners)
- The ability to supply the applications real-time
EC processing
- Many types of documents (EDI, HTML forms,
e:mail, excel sheets, fax)
Internet
e.g. ANX
EC Business
- Supply Chain
- Selling & Marketing
- Buying
- Order Fulfillment
- Logistics
- Many more
EC Partners
- Trade Partners
- Suppliers
- Commerce Partners
- Internal Partners
Existing EC Infrastructure
New EC Infrastructure
First Time Registration
Whirlpool.XX
Archive
Bin
Draft
Read
Sent
Unread
Unsent
During registration, the following
file structure is created on the
supplier’s pc. All programs
necessary to run the application
are stored in the Bin directory.
Example of the Desktop
Click Return to go back
Click Return to go back
Print by clicking on the browser’s Print function
Click on the back function to return
Enter ASN No, Packlist No, use drop down box for Ship To Name
Load Release Data: Highlight part then import to form
Click Calculate, box information appears. Box line items may be edited.
Print Labels and click save.
Example of Barcode Label
ECRC Locations
ECRC Core Functions
Outreach
Consultation
Education & Training
Technical Support
The Role of Global Information Standards in
Electronic Commerce
Trends in establishing the global supply chain
 Move towards “global” suppliers
 Automotive
 Whirlpool
 Many large companies using EC with global
partners
 Reduce inventory
 Improve market share
 Faster revenue collections
 Speed timing on exchange of business
documents
 EDI/EC initiatives
The Role of Global Information Standards in
Electronic Commerce
Trends in establishing the global supply chain
 Technology issues
 Methods
 VANs
 Forms-based over the Internet
 FTP
 Could easily be outsourced
 Different levels of infrastructure
The Role of Global Information Standards in
Electronic Commerce
Trends in establishing the global supply chain
 Business issues (most important): need top
management support
 Different languages
 Same words have different meanings in
different cultures
 Non-Americans may know English, but
don’t understand nuances
 Different cultures and time zones
 Not just holidays, vacations and dress
 What does “No problem” mean?
 Good to have local people as initial point
of contact
 Different legal requirements
 Whirlpool Evaluated Receipts Settlements
(ERS) won’t work in Mexico because
invoice legally required.
 Stereotype of the “Ugly American”
The Role of Global Information Standards in
Electronic Commerce
 Integrating regional policies into the global
system
 External
 ANSI versus EDIFACT
The Role of Global Information Standards in
Electronic Commerce
Integrating regional policies into the global
system
 VANs versus Internet versus ANX
 What is ANX?
 A multi-provider, virtual private network;
formed by Automotive Industry Action
Group (AIAG)
 Providers compete for customers, but
deliver same service quality, e.g.
performance, security
 All customers share same physical
infrastructure
of ANX certified providers, but each
electronic conversation occurs via secure,
private connection between customers
The Role of Global Information Standards in
Electronic Commerce
Integrating regional policies into the global
system
 VANs versus Internet versus ANX
 Public Internet versus ANX
 Public Internet
 “Best Effort” performance
 Decentralized administration
 Inconsistent security
 Unpredictable
 ANX Service
 Guaranteed performance
 Centralized administration (via ANX
Overseer: Bellcore)
 Standards-based, network-level security
 Reliable
The Role of Global Information Standards in
Electronic Commerce
Integrating regional policies into the global
system
 VANs versus Internet versus ANX
 ANX geographic direction
 ANX Release 1 - North America
 Initially United States, Canada
(September 1, 1998)
 Eventually Mexico
 ANX Release 2 - Europe
 Memorandum Of Understanding (MOU)
 ANX pilot projects - Germany, France,
England
 Timetable - no earlier than Q3/Q4 1999
 Discussions Underway/Expected
 Japan: Japanese Automotive
Manufacturers Association (JAMA)
 Australia: Federal Chamber of
Automotive Industries (FCAI)
 South America
The Role of Global Information Standards in
Electronic Commerce
Integrating regional policies into the global
system
 Automotive industry strategy (1998 “AutoTech”
Conference)
 GM - Electronic Commerce Strategies
 Electronic Data Interchange (EDI)
 Require EDI for QS9000 certification
 Migrate from X12 to EDIFACT
International standard
 Explore use of ANX for EDI
 Encourage small suppliers to use EDI,
Web-based forms over the Internet / ANX,
or Third party provide
The Role of Global Information Standards in
Electronic Commerce
Integrating regional policies into the global
system
 Automotive industry strategy (1998 “AutoTech”
Conference)
 Ford - Electronic Commerce Strategies
 Common Global Supplier Electronic
Comm.
 Electronic Data Interchange (EDI)
 Direct Data Link (DDL)
 Explore use of browser- based
technology
 Use TCP/ IP technology
 Use ANX
 CADCAM Data Exchange (CDX)
 Ford Supplier Network (FSN)
 Supplier E- Mail
 Automotive Network eXchange (ANX)
Vision
The Role of Global Information Standards in
Electronic Commerce
Integrating regional policies into the global
system
 Automotive industry strategy (1998
“AutoTech” Conference)
 Vision
 Chrysler - Electronic Commerce
Strategies
 EDIFACT - after 2000, maybe
 1998 EDI over the web
 Electronic Funds Transfer
 Part of overall Supplier EC
Requirements
 Payment Terms plus 3 days
 Final nail into paperless vision
 Paper No Longer an Option
The Role of Global Information Standards in
Electronic Commerce
Implementing global sourcing
 Paul Dittman, Whirlpool’s VP of Global Logistics,
commented on some global implementation
issues in the March 1999 issue of PM Network
 You don’t commute to China
 30 hour trip
 At least three weeks at a time
 There are translators and there are translators
 Can fit only so many granola bars in a suitcase
 Is language a barrier?
 Logistics
The Role of Global Information Standards in
Electronic Commerce
Specific considerations for designing a global
network management
 EC documents; specifically ASN’s
 Other than Europe and North America
The Role of Global Information Standards in
Electronic Commerce
Integrating regional policies into the global
system
 VANs versus Internet versus ANX
 Principles of the ANX vision
 User-centric
 Consolidated network services
 Lower-than-legacy costs
 Higher service quality levels
 Managed evolution
 Continuous improvement
 Standards-based technologies
The Role of Global Information Standards in
Electronic Commerce
Implementing global sourcing
 Ways to reduce inventory (Purchasing
professionals surveyed by Supplier Selection &
Management Report in February 1999)
 Shifting the inventory to the suppliers (supplier
takes responsibility for inventory reduction)
 Building a stronger supply chain
 Shortening leadtimes (better information flow)
 Reduce storage space requirements
 Improving the cash flow situation (JIT, EFT)
 Establishing a consignment inventory protocol
 Leadtime reduced to zero
 Inventory carrying costs reduced to zero.
 Lost production time waiting for incoming
quality approval is eliminated.
 Lower pricing negotiated in exchange for the
long term supply agreement
The Role of Global Information Standards in
Electronic Commerce
Implementing global sourcing
 Implementing EDI/Electronic Commerce
 Electronic commerce activity — specifically on
the Internet — has exceeded the expectations
of business analysts, but its true potential to
revolutionize the procurement process remains
a distant goal.
 Department of Commerce: April 1996; 1998
Internet-based purchases $200 million in
1995 to an estimated $5 billion
 Cambridge, Massachusetts-based Forrester
Research's latest estimate is even higher:
$3.2 trillion in sales over the Internet by 2003
with 85 percent of that being business-to
business buying.
The Role of Global Information Standards in
Electronic Commerce
Internet-based electronic commerce procurement still
not reaching its potential
 First target will be maintenance, repair,
and operating (MRO) expenses, an
industry worth an estimated $1.3 trillion
annually in the United States. But MRO
procurement is just the tip of the iceberg.
 Purchase of direct materials will really
catch on in the next millennium. Other
noteworthy trends include the
establishment of interconnected supply
grids versus vertical supply chains, and
the relatively new concepts of "transactive"
e-catalog content, and "reintermediation,"
or new-age intermediaries.
The Role of Global Information Standards in
Electronic Commerce
The Internet will become a critical medium for
accessing critical information and by the way
information can be transferred between supply chain
members.
The Role of Global Information Standards in
Electronic Commerce
 Using better forecasting tools
 Reducing the supplier base (“global” suppliers)
The Role of Global Information Standards in
Electronic Commerce
What business problems can the new technologies
solve for small companies?
 Some OEM’s are thinking about ‘Push’ as
opposed to the current ‘Pull’ model.
 PROBLEM: Many SME’s don’t operate 24
X7
 Technologies to guarantee delivery are just
being developed
 Will SME’s be able to afford permanent ANX
connections?
The Role of Global Information Standards in
Electronic Commerce
Emerging trends
 EDI over Web and/ or HTTP
 Currently a replacement for Rip & Read EDI
 No integration of data into SME’s internal
systems
 HTTP based technologies still being
developed
 Problem with guaranteed delivery
The Role of Global Information Standards in
Electronic Commerce
Emerging trends
 E- mail based EDI
 Possibility of Store and Forward
 Could solve the ‘lights out’ condition for
many SME’s
 Timeliness could be a problem
 Guaranteed Delivery solutions are being
developed
 Storing material at point-of-use
 Focusing on “A”, “B” and “C” inventory
 Introducing vendor managed inventory