Today’s car manufacturers face a constant challenge to sell more cars and at the same time reduce costs in order to become more competitive in the market place.  Over the years, OEMs have had to change the way in which they manufacture cars and source components from suppliers.  It no longer makes sense for a car manufacturer to try and make everything in house and today many OEMs are becoming known as ‘Branded Integrators’.  Branded integrators are companies who derive the initial design for the vehicle, conduct final assembly and look after the brand management and marketing.   

What has happened is that the original Tier1 suppliers have now become more involved with the actual manufacture of cars, many Tier1s such as DANA Corporation are producing entire suspension assemblies which are delivered track side and fitted straight to the vehicle.  The original Tier2 suppliers have now become the ‘new’ Tier1s and hence there has been an entire shift in the automotive supply chain.  This process of introducing outsourced manufacturing to the vehicle assembly process has meant that OEMs have been able to reduce costs considerably and streamline their respective supply chains. 

Automotive OEMs are also outsourcing parts of their IT infrastructure, typically starting with the management of PCs and associated networking. It is more difficult to outsource the management of software environments because software applications are complex and are often seen as ‘mission critical’ so are typically managed by an inhouse IT department.  However, the management of a B2B infrastructure is an ideal candidate for being outsourced, particularly those infrastructures which are required to be global in nature and need to be managed on a 24/7 basis anywhere in the world.  Compared to managing a network of PCs or software applications, looking after a B2B environment must also take into account the day to day management of a company’s network of trading partners as well. 

So when should a company decide to outsource their B2B infrastructure?, well there is no right and wrong time to do this but there are a number of significant benefits that can be realised if a company does decide to outsource their B2B infrastructure:   

• Lowers costs – less time spent maintaining complex B2B infrastructures and staff can be re-deployed on other projects
• Accelerates time to market – allows manual tasks to be automated and less time will be spent searching for information
• Improves operational efficiencies – allows users to be shielded from the complexities of using a B2B system, improves visibility, back up and reliability of B2B transactions
• Improves customer satisfaction – ability to trade with any partner, in any location worldwide and more importantly helps to reduce payment cycles and delivery times

Now in the ideal world most companies will be looking to gain all of these benefits from outsourcing their B2B infrastructure, but realising these benefits does not happen overnight. However there is one more benefit that automotive companies can obtain by outsourcing their B2B infrastructures, it will allow them to return to what they do best, which is to design and manufacture vehicles, now that can’t be a bad thing! GXS Managed Services is well positioned to help any company address their B2B outsourcing requirements, if you would like to find out further information about this and other services that we can offer please visit our website, www.gxs.com.