Quote:
Originally Posted by g e
Automobile manufacturers were early adopters of EDI- Electronic Data Interchange, it’s a huge enabler of JIT supply chain practices
Documents like Purchase orders, Advance ship notices, order change, invoices, And many many more are standardized allowing them to be used across the industry. There are variants between car companies.
First Tier suppliers are mandated to be able to accept and send these documents electronically. Large suppliers integrate this data with their in house accounting and manufacturing applications.
Many of these suppliers in turn require their own suppliers (referred to as Tier 2) to also exchange biz docs electronically. This in turn goes to Tier 3 and Tier4 suppliers
When this is complete there are huge economies of efficiency for each company involved
If a car company sees a slow down in demand, order changes are sent to Tier 1 who in turn notify their suppliers. Product manufacturing slows until demand picks up. And when demand is anticipated to pick up, the downstream suppliers can meet the increased need efficiently
This means less warehousing costs, less interest spent on products not going to a diminished market and so on.
I sold EDI software and integration services for about 10 years to the Tier 1, 2, and 3 suppliers.
Retail and medical also embraced EDI among others.
|
Yep I have worked in Tier one for 30 years and watched this system grow.
Unfortunately what was supposed to streamline things has been a nightmare for the last two years. The broadcasts change so often and so rapidly that there is no way that there can be a smooth transition through the supply chain. We can from needing to make 4,000 parts to 0 to 7,000 all in the space of 24 hours. Pretty much just guessing at this point.