deutsche Version
 

Optimized data interchange with XML enhances process quality

by Frank Jung, Software AG

Logistical data has been transmitted electronically between automotive manufacturers, suppliers and service providers for some time now. EDI has established an important niche for itself here in the fields of logistics, purchasing, finance and design. The increasing penetration of XML into all areas of electronic business is meanwhile opening up completely new horizons that will make electronic data interchange not only significantly more flexible but also cheaper.

The automotive industry is one of the key sectors of the world economy: a major contribution is made through the development, production, sale and use of automobiles towards the generation of income and employment. Companies in this line of business manufacture motor vehicles and their engines as well as trailers, bodies, containers and assorted automotive parts and accessories. 

To a degree greater than with almost any other product, the manufacturing process for cars is based on the "division of labor" principle. Practically every sector of the national economy contributes services towards it at some stage. There has been a shift in the value-added distribution between vehicle producers, primary suppliers and upstream suppliers as a result of organizational changes to the production processes (lean production being one obvious example) and the manufacturers' strategy of concentration on core competencies. The low production depth of car manufacturers means a high, diversified demand for advance work, so that numerous other branches also participate in the value-added chain of automotive production: capital goods, parts and accessories are supplied, among others, by firms in the mechanical engineering, chemical, electrical and textile industries as well as by cold rolling mills and ironworks. The tertiary sector, in the shape of consulting engineers, forwarding agents and transport corporations, also plays a crucial role in the car production process. The repercussions of the automotive industry's actions for other upstream and downstream sectors are enormous.

Information flows support business processes 

Owing to the time-critical nature of business transactions between all the parties involved in the automotive value-added process, the physical logistics process in particular needs to be efficiently supported by methods and procedures for electronic data transmission. The Association of the German Automotive Industry (VDA) has consequently been working jointly with car manufacturers and suppliers on elaborating communication standards ever since the mid-70s. More than 20 VDA interfaces meanwhile cover a variety of business transactions such as quotations, orders, delivery notices and billing modalities. By preventing media discontinuities and redundant entries, these VDA interfaces enable costs to be cut while at the same time increasing flexibility. 

During the 1980s, the German automotive industry played a key role in the development of European-level standards within the framework of ODETTE (Organization for Data Exchange by Tele-Transmission); ODETTE is based on the EDIFACT syntax and has since gradually been implemented right across Europe. Back in late 1995, the automotive industry began its migration from the VDA and ODETTE standards to EDIFACT. The prime motivating force behind this move was a desire to remain process-capable in the face of increasing market internationalization and globalization. 

EDI users - a small, elite group

EDIFACT, or more accurately UN/EDIFACT, was adopted by the UN/EC in 1986 in response to a joint application from Europe and North America. As an industry-neutral EDI solution, EDIFACT facilitates and simplifies the electronic exchange of business information between manufacturers, wholesalers and retailers, importers and exporters, banks, etc. One application for which it is particularly suited is structured electronic data interchange in enterprises with a large volume of transactions. 
Despite its undeniable advantages, the standard's acceptance in the industrial world is on the whole restricted to large corporations. There are two main reasons for this: firstly, the financial hurdles presented by the installation of an EDI solution are extremely high - and additional to the volume-based operating costs that are incurred for actually transferring data. Secondly, all the companies concerned have to agree on which standards should be used. Although there are already standards such as EDIFACT, the majority of companies also have requirements of their own which go beyond the basic formats. Furthermore, organizations that wish to exchange EDI data with several different business partners - possibly also in different industries - are obliged to use different message types; setting up, maintaining and regularly updating these communication channels is both complicated and costly.

XML is ousting (classic) EDI

EDI has consequently reached a crossroads. This is also confirmed by a report published recently by IDC (Reinventing EDI: Electronic Data Interchange Services Market Review and Forecast, 1998 – 2003). "The classic EDI paradigm has exhausted the industry sectors and the applications for which it is best suited. Moreover, this kind of electronic data interchange is not equipped to serve the new growth markets adequately," says Stephen Murray, Research Manager at IDC for Extranet Commerce Services. "The growth that is predicted over the next few years will therefore be triggered mainly by new Internet technologies." He is referring here to things like WebEDI and XML.

WebEDI is a method for linking together business partners who do not have an EDI infrastructure of their own - though it unfortunately has to struggle with the drawback of media discontinuities. Users can receive and view EDI(FACT) messages with the aid of a browser. The data must be reentered, however, before it can be processed further with the company's internal accounting software, for example, or its merchandise information system. If the company is linked to several different partners by WebEDI, each connection needs to be individually adapted and maintained. 

XML, the eXtensible Markup Language, offers a way out. XML is a text-oriented meta language. It enables data to be exchanged between different applications and then processed directly, because it describes data content. Although it is ideally suited for the Web, its use is not restricted to the Internet alone. It is compatible with any communication medium. 

At the core of XML is its strict separation of content and presentation. XSL (eXtensible Stylesheet Language) and XLL (eXtensible Linking Language) are therefore used in addition to XML for designing layouts and creating hyperlinks in XML documents. 

The form a network of merchandise information systems in the mechanical engineering sector, an important supplier to the automotive industry, might actually take in practice is demonstrated by Genius Software in Amberg with a pilot application for the Mädler Group in Stuttgart. E-commerce solutions for manufacturers of machine parts (web2CAD, a data warehouse with an XML server and PowerParts on Web, CAD libraries) are one of Genius Software's key business fields along with Internet system programming. 

"XML plays the role of middleware in our company. We also considered using Corba technology, but decided against it on the grounds that Corba is not only more expensive but also proprietary. XML, on the other hand, provides a straightforward, transparent means of managing data interchange between different systems for firms in the mechanical engineering industry," says Roland Lehle, responsible for data warehouse development at Genius Software. "XML is the only alternative for achieving universally accessible interfaces in a way that is both affordable for small and medium-sized business and can be maintained by them." As a universal data interchange format, XML permits complex networks of business processes to be implemented between various producers and dealers at an acceptable cost. 

Cost benefits of XML

In Roland Lehle's estimation, the cost of installing a basic XML application is approximately 50 percent less than for an EDI link. Any Web browser that is capable of presenting the transmitted data is an adequate client. The costs per transmitted message can be cut by up to 60 per cent compared with EDI. One possible scenario might be as follows: The availability of a product in the required quantity is checked with the supplier via XML. In the event of a positive response, a purchase order is sent by the machine-builder to this supplier via XML using the company's own ERP system. The supplier's merchandise information system then automatically generates a work order and sends back an order confirmation via XML. Ideally, it should be possible to call up the delivery status instantly for any current order.

Genius Software currently employs XML to map the mechanical product data in the data warehouse. Tamino is used in the pilot project described above as the XML data management system and as a link between the merchandise information systems of product manufactures, suppliers and customers. Tamino is Software AG's XML information server. With the aim of accelerating the advance of data warehousing and promoting endeavors at standardization, Genius Software became a member of NSM, the German standardization committee for article characteristics, which is specifically concerned with the topic of data description and interchange in the industry.

EDIFACT at a glance

UN/EDIFACT (Electronic Data Interchange for Administration, Commerce and Transport) is a series of technical rules published by the United Nations. A working party whose mission is the "Simplification of procedures in international trade" (UN/ECE/WP.4) has been active on a European level since the 70s; it is responsible for developing data elements within the framework of global, automated data interchange.

The UN/EDIFACT standard was adopted by UN/ECE/WP.4 in Geneva in 1987. The EDIFACT rules are based on four pillars:

• Syntax rules as an internationally standardized grammar for data interchange,
• Data elements and segments for presenting and structuring the data content of business transactions,
• Internationally standardized messages (or message types) for use as business transactions (such as invoices or purchase orders) with an industry-neutral structure,
• Telecommunications networks and services for transferring data as a means of transporting business transactions in communications.

UN/EDIFACT is currently the only worldwide, industry-neutral standard for EDI. This explains the growing wave of migration towards EDIFACT and away from proprietary and industry-specific standards.