The second part of my AutoTech 2007 review takes a look at some of the presentations that were made during the event.  In addition to the presentations made by the various OEMs, there were also presentations from numerous AIAG project teams, reporting back on the progress made on their projects.  In addition there were also presentations made by the various software and services vendors that were in attendance at the event.  These vendors also had a chance to demonstrate their solutions on the final day of the event, but I decided to skip those demonstrations as trying to get into some of them, bearing in mind some were competing companies to GXS, was like trying to get into Fort Knox!.  So this blog entry will focus on some of the key AIAG project reviews that took place and as there were multiple presentation tracks I can obviously only provide a review of the ones I attended.  This will hopefully give you a flavour for the type and breadth of projects that AIAG gets involved with.  I will provide a summary of others once the presentations are posted up to the AIAG website. So where do we start, OK, how about…

Interoperable Electronic Business Messages in the Enterprise - the first presentation I attended.  This session looked at the progress being made in the area of web services, which has been around now for about 7 years.  There are about 180 companies that are working together as part of the Web Services Interoperability (WS-I) organization.  This is an open industry effort, from both companies and vendors, with a common aim of achieving interoperability and where possible work with bodies such as OASIS, W3C etc to ensure that the web services being developed are compliant with global standards.  The WS-I value proposition is to reduce complexity and risk, improve productivity and accelerate time to market, and simplify web services buying decisions. The OEMs are interested in web services as they can realize significant cost savings, improve supply chain communications with more, if not all, companies in their supply chain, and many of them require secure asynchronous processing of information.

Supply Chain RFID International Standards Effort -  The aim of this presentation was to try and provide an update on the standardization efforts being made in the area of RFID technology.  The first slide of the presentation highlighted that there were five areas of RFID technology that needed to be standardized, namely: Technology, Data Content, Conformance, Network and Application Standards. The ISO TC122 project looks at a standard for packaging which includes bar code labeling, linear bar codes and a range of 2D symbols to represent the contents of packaging.  ISO TC 104/SC looks at a standard for sealing shipping containers, three tags have been developed, a supply chain tag, an electronic seal tag and a container ID tag.  The container ID tag provides automatic identification via RF technology, allowing easier location of a container at a port or distribution center. Finally the ISO TC 122/104 Joint working Group project is looking at supply chain applications for RFID.  This covers RFID tracking of shipping containers, transport units, pallets, packaging and products.  The final area presented was on EPCGlobal which is looking at Active tagging, sensors and long life battery developments, item level tagging and UHF / HF air interfacing.

Their main conclusions were that RFID, at the moment at least, is an evolutionary technology rather than a revolutionary one.  Bar code labeling has its place and will work alongside RFID technology as a backup and EPC global will require a complete change in the infrastructure of a company for it to work effectively. It was also interesting to hear that Walmart and the U.S Defense Department were the leading users of RFID technology with the Defense Department having the largest RFID network in the world.  RFID is a very effective technology for container and pallot tracking, but item level tracking still appears the most difficult to achieve.  Tracking a spare part, such as a gearbox, for a tank may be worth the effort of RFID tagging as it is a relatively expensive component, but tracking a can of tuna through Walmart’s supply chain network may prove a bit more difficult to achieve!

Materials Offshore Sourcing: AIAGs Long Distance Supply Chain Project – The MOSS project was interesting as it ties in very well with GXS Logistics Visibility solution.  This project was essentially looking at improving the visibility of shipments around the world, initially focusing on two ‘trade lanes’ Europe to the U.S and China to the U.S.  The project is developing a recommended best practice to enhance the use of electronic communications across all trading partners using standardized, reliable data based upon international standards.  One statistic quoted during the presentation was that nearly 15% of all inbound ocean freight is delayed in route due to data deficiencies.  Many of these deficiencies are as a result of extensive use of paper, documents, e-mails, faxes and phone calls involved in these complex movements.  This project involves ocean shipping companies, logistics providers, U.S customs and a number of automotive OEMs looking to improve their global shipment of cars and spare parts.  This project is currently in the ‘demonstrator build’ phase.

Global Recommendations for B2B Messaging in China – This project was conceived two years ago and the final report findings were given at this presentation.  China still represents the fastest growing car market in the world and with many domestic and joint venture car companies being established there, the need for a common B2B messaging format has become very important for this region.  This project has been a true global project involving a number of industry organizations including AIAG, JAMA, JAPIA, ODETTE and STAR.  The project undertook a couple of extensive surveys to find out the current ‘state’ of B2B / EDI adoption across China and the conclusion was that EDIFACT was by far the most popular EDI format in use today.  However due to implementation and cost issues it was felt that an XML based messaging format would eventually become a standard for use in China.   The report however recommended, due to the infancy of the XML standard, that UN EDIFACT and / or OAGIS XML BODs based on the Joint Automotive Data Model are the recommended standards.  Ultimately the JAIF will eventually recommend the UN / CEFACT XML standard, however this is still in development but will, in a few years time, provide the B2B standard for conducting business in China.   The presentation also highlighted from their surveys that GXS were one of two B2B service providers who had a well recognized presence within the Chinese automotive industry.

Developing the Joint Automotive Data Model – This joint AIAG, ODETTE, JAMA and STAR related project is an attempt to try and standardize on a model to allow for true global data exchange.  This model will not only be able to carry standard supply chain messages but also engineering type data traditionally associated with the ENGDAT format. ENGDAT is widely used as a format for transferring engineering computer aided design (CAD) models. Given that the car industry has become so globalized, there is a strengthening need to be able to exchange supply chain and engineering related data seamlessly around the world.  This project is an attempt to try and combine and enhance many existing formats into one common messaging format that can be used in any region of the world.

Global Automotive Update from Europe (Odette) and Japan (JAMA) –  The final session that I attended was an update on the work being carried out by Odette and JAMA.  During this session the most interesting development was about the new OFTP v2 standard that Odette are working on. The current OFTP standard has been in use within the European automotive industry for many years now, OFTP v2 is an attempt to bring the OFTP standard up to date and embrace the internet as a viable communications platform.  OFTP v2 looks promising and will offer a number of key features to allow companies to exchange information via the internet.  These include secure authentication via digital certificates, data confidentiality (whereby the file is encrypted before being sent to a trading partner), use of digital signatures, file compression, SSL session security, signed receipts and finally, support for international file descriptions.  These enhancements will mean that a company does not have to have a permanent internet connection, it will support large file transfers, reduce transmission times, it is ideal for emerging markets and it will become the chosen method for EDI and CAD data transfer over the internet.  Only time will tell if this last statement will be true as many car companies still prefer to use secure private networks for engineering related message / data transfer, there could for example be great hesitation in sending car related design information across the internet.

In addition to OFTP enhancements, ODETTE are also working on expanding the reach of the Global MMOG / Logistics Evaluation project.  KPI4GMML will look to improve materials management, particularly focusing on six key performance indicators for improving how parts / materials are shipped between a supplier and customer with a particular emphasis on improving the performance of logistics and 3PL providers.  KPI4GMML essentially measures the effectiveness of the logistics processes between parties. This project is in its early phase at the moment but is being built on the tools developed already as part of the MMOG/LE project.

There were many other sessions over the two days, and some of the more notable developments were in the area of Plant to Business (P2B) communications, a number of projects looking at how companies can improve communications between their HQ offices and their various manufacturing plants around the world.  I will post a separate blog entry about this development at a later date.

Overall, the presentations at AutoTech were very good and informative, they managed to cram a lot of presentations into the two days and I still have a lot of reading to do of sessions I didn’t get to attend. Further information about AutoTech can be found at the official site at autotech.aiag.org and www.autotech.org

So no sooner do I get back from a two week holiday, I fly out to Detroit to attend the AIAG Autotech 2007 Show.  AutoTech is one of two major B2B related Supply Chain Management shows this year, the other major one is Odette which is taking place in Prague in late November.

This year’s event is being held at the new Rock Financial Showplace just outside Detroit. AutoTech is one of the leading B2B related shows for the U.S automotive industry and as GXS has many North American based automotive customers we decided to provide sponsorship to the event.  AutoTech is run by the Automotive Industry Action Group, a body set up to help automotive companies improve how they do business with each other.  In fact the theme of this year’s show is Coopetition, now this is a term that I had never heard of before and therefore I had to do some Googling (other search engines are available!) to find out exactly what it meant! 

In essence it means cooperative competition, a way for competing companies to work together to achieve a common goal.  The best example of coopetition between automotive companies is when they work jointly on a new car or engine programme that will be sold by both companies. From AIAG’s perspective they are encouraging coopetition between North American automotive companies to try and solve complex business problems, improve supply chain efficiencies and help develop global supply chain strategies.

The event itself has two parts, firstly an exhibition area where various B2B software and services vendors can showcase their solutions and secondly a twin track set of presentations delivered by OEMs, suppliers and B2B solution providers.  The aim of these presentations is to provide education in the latest B2B industry trends, provide updates from the various industry standards bodies and allow the OEMs to discuss their latest supply chain strategies.  More importantly it provides a great opportunity for networking and discussing business issues with both automotive companies and B2B solution providers.

I will be attending both days of the event and I will provide further updates and key highlights from each day of AutoTech via this blog.  I will also highlight GXS involvement with the event and hopefully get round to posting up some pictures over the next couple of days.  So hopefully you will find it useful and if you are interested in finding out more information about this event then you can visit the AutoTech 2007 official website

Over the last decade we have seen immense progress in the development of handheld computers.  One of the first ones I owned, way back in 1996, was the Psion5.  In its day it was being used by many companies for running basic office applications and allowing employees to keep in touch with the office via email whenever they were on the road.  The thing that made it appealing for me was the combination of full QWERTY keyboard  and touch screen interface.  The Psion range of handheld computers was actually a major achievement in packaging and in terms of usability it was up there with anything that Apple had to offer at the time.

Over the years we have seen a number of different handheld computers hit the market including the Palm, BlackBerry and various Windows Mobile based computers.  Each model has seen progress being made in CPU performance, screen resolution and increased hard drive capacity.  In fact many of today’s handhelds are nearly capable  of running full blown office applications.  One of the more significant developments to come out of Psion was the Symbian operating system, this was a joint venture with Nokia and Ericsson in 1998 with the aim of developing customised applications to run on mobile phones.  The only problem was that Symbian was way ahead of its time and unfortunately the mobile platforms back then were not able to fully utilise the powerful features of Symbian.  Symbian was very much regarded as one of the key enablers to allowing companies to develop their own mobile applications and allow integration with back office systems.

Today, both BlackBerry and Windows Mobile devices dominate the market and these handhelds are starting to allow the ‘mobilisation’ of enterprise systems. These devices have excellent ergonomics and perform very well, but there is a new competitor about to enter the market, a company that has a strong reputation for developing excellent user interfaces and stylish portable devices, Apple.  Apple developed the first graphical user interface running on their Apple Lisa computer, but more recently their iPod music player has become an industry leader.  Now, Apple are looking to repeat this success with their iPhone.

The iPhone has only just hit the streets in the U.S, but already we have seen a press release from Netsuite saying that they are going to port their enterprise applications to the iPhone.  This is significant as it means that users of the iPhone will be able to get access to enterprise solutions such as CRM and ERP packages.  Key to this is the delivery of applications via the iPhone’s Safari web browser and the ability to use these applications through a Software as a Service (SaaS) delivery model.  I will discuss SaaS in another post but it essentially allows you to use software via the internet or private network without having to have the application actually loaded on the computer.  Delivering applications in this way now means that handheld computers or ‘multi-use’ devices such as the iPhone can be used to integrate to back office solutions.

The press release from Netsuite, discussed over on silicon.com, is significant as you can guarantee that there will be many more companies out there looking to develop SaaS based custom applications for the iPhone.  So the question is, how long will it be before companies are able to get access to their B2B infrastructure via the iPhone?

B2B and EDI infrastructures are extremely complex and many of the more important applications were never really designed with portable computing in mind, after all a few years ago, who would want to complete an invoice or purchase order whilst out of the office?  A more likely application would be for a logistics or supply chain manager to quickly check on the performance of his trading partners or to check on the number of orders that have been successfully processed in say the last month.  What if you could check on the location of any shipment worldwide by simply using a customised version of Google Earth that could run on the iPhone?, that would have to be the holy grail of logistics visibility solutions.

GXS have a number of B2B applications that could be developed at some point in the future to run within a ‘mobile trading’ environment and we already have a world leading application integration solution to allow back office integration to leading enterprise solutions such as SAP.  So what would an iPhone based B2B trading platform look like?, well here is a mock-up that I produced, not much detail!, but then again it would have to be simple and easy to use to stay in the same mould as other Apple based applications. 

In summary, the BlackBerry and Windows Mobile platforms have transformed the way in which office applications are used on the move. The hardware is now able to run the applications efficiently, the operating systems and applications allow integration to back office solutions, therefore I wonder how long it will be before a B2B trading platform can be fully mobilised?

Every year GXS attends the Odette conference, event website, the leading B2B conference specifically aimed at the automotive Industry.  This year the event is being held in late November in Prague, Eastern Europe, quite a timely event given that this region is one of the fastest growing automotive manufacturing regions in the world.  GXS will have a stand at this event and yours truly will be delivering a presentation during the conference. 

My presentation this year will look at the future of B2B trading environments, and trying to predict what B2B related technologies and services will be used by supply chains in the future.  I will be taking a look at how Software as a Service (SaaS) will impact the deployment of B2B and Supply Chain Management solutions in the future.  As you may or may not know SaaS provides a hosted method of delivering software applications across the internet and this is seen by many as the next big thing to shake up the software industry.  The combination of web based delivery of software applications, subscription based payment methods, ease of deployment and minimal ongoing application management requirements make SaaS a very compelling environment to adopt.  Its success will rely on mainstream adoption by the big companies around the world and of course how quickly the B2B solution providers can provide this type of application delivery model.  SaaS shows strong promise, especially for use in the emerging markets where IT implementation skills are limited and I will be taking a closer look at the implications of running a SaaS based B2B environment in my next blog entry. 

In addition to SaaS, I will also be taking a look at how outsourced or Managed Services environments are likely to affect how B2B infrastructures are managed in the future.  Recently, GXS has won two significant automotive Managed Services deals, one with Mitsubishi Motors in Japan, press release, and the other relating to a global Tier1 supplier.  Cost savings and company restructuring is becoming key to improving competitiveness and GXS Managed Services offering is a proven method of significantly reducing B2B related infrastructure costs.  But just how far can a company continue to outsource elements of their business without compromising the way in which the company operates.  This part of the presentation will address this issue as well as see how Managed Services will evolve over the next few years. 

The final part of the presentation will take a look at the increasing importance of electronic invoicing, or e-Invoicing.  Invoicing and exchanging purchase orders etc has been a key activity of many EDI systems for many years now.  But how do member states of the European Union share invoices across different countries, having different tax laws,  and invoice processing requirements?  How will a B2B platform of the future be able to process all these different invoices electronically having varied regulatory requirements?  This section of the presentation will try and answer these questions and see how they will impact B2B trading environments of the future.  We have discussed the ‘green issue’ a couple of times in my blog and you would think that implementing an e-Invoicing solution would significantly help to reduce paper consumption, saving trees etc.  Well it does, but only if you can get your entire trading community using an e-invoicing solution. 

Yes, there are many other new and exciting B2B trends and technologies out there, but I will only have a 40 minute presentation slot, so this will have to do for now.  In a previous blog I discussed about how the virtual world called Second Life is likely to change how we do business between companies and last week it was announced that a company is looking to develop B2B applications for the new Apple iPhone.  The iPhone, like the Blackberry before it, could significantly change how companies integrate with their B2B platform whilst on the move.  I think this will make another interesting blog entry, so until next time!

History is littered with car companies that have been bought and sold, some being more successful than others, some no longer exist and once iconic brands have now bitten the dust.  Many car companies received significant government incentives in the 1960s and 70s to establish their plants in particular regions or countries and some car companies became more famous when they went out of business than when they were in business.  A good example is DeLorean, that famous brand that was set up in the 1970s.  Can you imagine a Private Equity firm stepping in to save that particular company from going out of business. What about if they had been able to look into the future and see that in fact the car company they were going to buy would make more money from image and film rights than any other car in history and would become worth more than the actual car company many times over.  Ironic then that a car that was able to travel backwards and forwards in time was unable to see the destiny of the company manufacturing it!

Private Equity companies have been buying up companies in many different industries for years, but for some reason they have stayed away from investing large amounts of money into the automotive industry.  Now, with the global automotive industry offering zero growth in some markets around the world and the ability to acquire companies at knock down prices, so long as they absorb a company’s debt, automotive companies are becoming very attractive to this investment community. 

In recent weeks we have seen Chrysler being bought by the Private Equity company called Cerberus and not content with acquiring one of the world’s most well known automotive brands they are now thinking of putting in an offer for other brands such as Jaguar and Land Rover.   We learnt a couple of weeks ago that Ford wanted to offload Jaguar and Land Rover and Cerberus seem to be a very credible company to want to take them over.  This would make Cerberus into an ‘automotive powerhouse’, admittedly there would be significant restructuring involved across all three companies but you have to ask the question, why would they go to the trouble, especially as a company the size of Ford has not been able to grow Jaguar and Land Rover in the way they would have liked.   

Private Equity companies have a few things going for them, they have plenty of money, they have the ability to appoint a flexible management structure in the companies they take over and they have a hunger or determination to succeed.  Restructuring a car company is a long term business, after all most Private Equity or Venture Capital companies would look to make an investment and sell the business on within 5 years in order to try and make a profit. With a car company it is different, cars can take three to four years to develop and bring to market and any financial return won’t be seen for a few years after that, assuming everything goes to plan.  Now when you consider for example that nearly all of Jaguar’s cars will have to be replaced in the near future, this will put an incredible amount of pressure on a Private Equity company such as Cerberus to succeed. 

So whilst a Private Equity company is busy restructuring the companies they acquire and they strive to get them focused on what they do best, in this case producing vehicles or automotive related components, they will also be looking at how costs can be cut significantly across their business.   At the same time they will not want to interfere with a company’s supply chain infrastructure and trading partner relationships that have been built up over the years  must, where possible, be preserved.  So while Private Equity companies are busy restructuring the operations and finances of the companies they buy it would make sense for them to outsource other areas of the business in order to streamline the company’s cost structure. 

GXS are well positioned to be able to assist a Private Equity company with the complete outsourcing of the B2B infrastructures associated with the companies that they acquire.  Everything from managing the e-commerce platform, through to managing their trading partner community, whether this is local to the manufacturing plant or in other regions of the world.  GXS has a presence in nearly all of the main manufacturing centres around the world and our unrivalled local language support in these regions can really make a difference when trying to strengthen trading partner relationships. GXS has invested a significant amount of money in our best in class B2B trading platform called Trading Grid® and Private Equity companies would be safe in the knowledge that the customers and suppliers of the companies they acquire were being looked after by a company with nearly 20 years experience of managing outsourced B2B environments.  For further information about GXS Managed Services why not take a look around our Managed Services Microsite….

Therefore in summary, Private Equity companies have extensive experience of financing and restructuring companies, however they do not, in most cases, know how to run a global B2B infrastructure, this is where GXS can provide assistance. Also, for these acquisitions to move forwards and be successful, these companies are going to have to go back to focussing on core business activities, perhaps ‘Back to the Future’ is a good strategy to follow after all!

So the big news this week is that Ford are thinking of selling Jaguar and Land Rover, two iconic car manufacturers who have been at the heart of the British motor industry for many years.  Ford is currently going through major restructuring and despite significant investment in trying to turn around the fortunes of Jaguar and Land Rover it looks as though Ford may be about to throw in the towel. 

Jaguar has seen significant investment from Ford and some will say that it is Jaguar that is causing part of Ford’s current financial problems.  Despite billions being invested since Jaguar was acquired in 1989, they have struggled to turn the business around and make them into a profitable organisation.  The problems may be down to their design strategy, always playing safe in order to not lose the ‘Britishness’ of their designs, but whereas BMW and Audi were willing to be more adventurous with their designs, Jaguar didn’t want to take the risk.  It was only with the launch of the new Jaguar XK two years ago that we started to see a new design direction for the company.

Jaguar have new models coming down the line, but with an impending sale on the way, this could once again affect their future model plans.  Jaguar tried very hard to copy the various segments that Audi, BMW and Mercedes were in, but they have failed for one reason or another, and I think for their long term future they need to reduce their production volumes and focus on developing cars that their customer want rather than what Jaguar thinks they want.  If you look at their former sister company Aston Martin, you will see what I mean, Ford totally transformed the business, once again invested a significant amount of money, but they developed desirable cars which could compete head to head with their rivals such as Porsche and to some extent Ferrari.  Aston was acquired by Dave Richard’s Prodrive organisation a few months ago, with significant investment from Private Equity companies, and I am sure that Aston will now go on to bigger and better things now that they are independent, financially speaking, from Ford.  All it wants now is for someone to do the same thing with Jaguar, but there is a problem.

That problem is Land Rover, you see as part of Ford’s drive to cut costs across Premier Automotive Group (PAG), it introduced a shared product development strategy between Jaguar and Land Rover.  Given the relative proximity of the Jaguar and Land Rover design and manufacturing plants in the UK, it made sense to try and share costs between the two marques. This also had an impact on their respective supply chains to such an extent that they now share suppliers across key components.  In addition they also have shared dealership networks, for example quite often in the UK you will see a Jaguar dealership right next to or part of a Land Rover dealership, this helps to reduce car transportation / logistics costs and other overheads that would be normally incurred if they were run as two totally separate dealerships.  As Volvo is also part of PAG, you will also see their dealerships close to other Jaguar and Land Rover dealerships. 

Land Rover is probably the more successful brand within PAG, they have improved the quality of their vehicles beyond recognition and some will say that BMW had a strong influence on quality improvement at Land Rover when they owned them a few years ago.  Land Rover could be an interesting acquisition for an OEM who doesn’t currently have a strong 4×4 offering within their portfolio.  This may explain why both Renault and Fiat expressed, and then quickly declined, an interest in acquiring Land Rover.

Ford has a very comprehensive product development environment and Jaguar and Land Rover cars are designed using the same computer aided design system.  In addition, all their back office systems are tightly integrated and they use complex web based management information systems to keep track of vehicle development progress.  If you also combine this with a shared supply chain strategy, shared component strategy and even a shared dealership and aftermarket parts network strategy you can begin to see that actually selling Jaguar and Land Rover as a joint package would actually make sense.  But who will buy these two companies?, well I guess it will probably be a Private Equity company as many of the other OEMs are undergoing restructuring and cost saving strategies themselves.  One thing is for sure that the brand value of both of these companies is very strong, so I personally think that their long term future will be OK, so long as they find the right buyer , I guess only time will tell.

Oh and apologies for including a couple of gratuitous car shots in this post

I was fortunate to visit one of our data centres last week, we were holding a partner event at our office in Amstelveen, Amsterdam. GXS have a number of partners across Europe who resell our solutions (and I will discuss this in more detail in another blog entry), this provides us with the ability to support customers in areas of Europe where we don’t have an office.  The reason for holding the event at Amstelveen was to show the partners our data centre, this is one of two centres that GXS operate to support our global Trading Grid (R) B2B platform.

I have been with GXS for just over a year now and this was the first opportunity I had to visit one of our data centres.  This facility has been in operation since the early 1970s and is located in a fairly anonymous building in Amstelveen.   But where did these large data centres come from and what was the driver for their development?

It was during the 1950s and 1960s that large defence related budgets helped to establish some of the earliest computer data centres. Indeed NASA was infamous in establishing one of the world’s first data centres, to help with their space programme.  It was the early pioneering work on these lavish data centres that led to the development of today’s data centre infrastructures.   During the 1970s General Electric started to develop global IT networks and developed one of the first networks for sending and receiving emails.  The data centre I visited last week was originally part of GE’s global IT infrastructure, until the GE Information Systems division was divested and sold to GXS current owner, Francisco Partners. 

I mentioned in an earlier post that GXS had recently spent millions of dollars upgrading its data centre infrastructure, both in Amstelveen and Ohio in the U.S.   It was very clear to see where that money had been spent, new eGenera Blade Servers, EMC mass storage devices and state of the art Cisco network routers.   The other significant benefit that this technology brings is that it requires a much smaller footprint to house, compared to the old servers etc.  So not only are the computers and mass storage devices becoming a lot smaller, the facilities and number of people running the facility are also relatively small as well.  It was quite a surprise to see that this facility is run by a handful of people. 

So what will the next generation of data centre look like? Well I found this article over on sun.com the other week, describing how Sun Microsystems had developed a data centre within a forty foot shipping container. 

Known as the ‘Black Box’, it effectively contains everything required to run a standalone data centre.  Given the time and effort normally required to set up a data centre, being able to have something turn up, unloaded from the back of a lorry and switched on to begin processing almost immediately must seem like a dream come true for today’s CIO.   

Anyway, GXS will continue to invest in their data centre infrastructure to ensure that it remains a best in class facility that will allow their customers to have access to the most reliable and highly available B2B trading platform on the market today.

When I was at school, yes I know many years ago now!, I always found it difficult to try and find the right information at the right time.  Whether this was to complete a classroom exercise or finish some homework, it always seemed to take a long time to find the information I was after.  This may be due to the fact that the internet was not around when I was at school, (this is obviously something we all take for granted now)  and the computers that we used back then were somewhat technically challenged to say the least !

This is a picture of the beast we use to wheel into the classroom during our computer sciences lessons, a Research Machines 380Z, and I am not joking when I say that the lights in the room use to dim when we switched it on!, how times have changed….

However even today with almost unlimited online resources, it still seems difficult to find one website that can answer all your EDI or B2B e-Commerce related questions.

Many years later, the internet has transformed the learning process considerably, online books, tutorials and endless research articles are available on virtually any subject you choose.  When I joined GXS in April 2006, one of my first tasks was to try and learn about EDI and the associated industry.  Having come from a totally different industry, the Product Lifecycle Management (PLM) software sector, this was no mean feat.  I had hoped to find a lot of information internally, after all, GXS has been around for over 35 years, so you would think that there would be plenty of materials for me to look through.  Unfortunately this was not the case and instead, all I could find was an EDI ‘101’ style reference booklet which was last updated in 1995.  In addition I then had to trawl the internet to plug all the missing gaps with the information that wasn’t available in the booklet,  I also had to try and find out about the best ways of implementing an EDI solution and how GXS customers were using our solutions.

So I began the journey of creating a microsite to provide an introduction to EDI, a totally self contained website that provides an overview of EDI, B2B solutions, document formats and connectivity options etc.  The EDI Basics Microsite has been up and running now since November 2006 and we have seen an immense amount of traffic going through this website.  The intention was not to develop a heavily branded site to allow you to learn about GXS B2B solutions, but more of an informal and non threatening way to learn about the fundamental aspects of trading electronically between companies.  The site is very easy to navigate and allows you to download a number of useful EDI related resources.  

There appears to be many EDI resources on the internet, but not many attempt to provide all the information you will need on EDI or B2B e-Commerce in one location.  I hope you find the site useful and if you have any thoughts or comments on how it could be improved still further then simply leave a comment below!

The biggest news in the automotive industry this week is that Chrysler has finally been sold to a private investment firm called Cerberus Capital Management for $7.5Billion.  Compared to all the other bids that came in for the company the private investment option probably represents the best opportunity for Chrysler to finally turn around their business.

Chrysler was bought by Daimler in 1998 for $36Billion, yes you read that correctly!, this represents a $30Billion loss on the investment in less than ten years.  So what has gone on here, how can Daimler Group shareholders have allowed this to happen?.  Well one of the reasons for Daimler acquiring Chrysler was to get a strong foothold in the U.S market.  Daimler thought that with some strategic platform sharing they could improve the volume car production side of their business.  Their Mercedes Benz brand has always been perceived as a premium brand.  What they thought they could do was acquire Chrysler in order to go head to head with Ford and GM in the high volume car production market. Over the past ten years Chrysler has been taking previous generation Mercedes car platforms and using them for their product range.  For example the Chrysler Crossfire is based on the previous generation Mercedes SLK and the successful Chrysler 300C Saloon is based on the previous generation Mercedes E-Class saloon.  In fact the Crossfire was the first car to be jointly developed by Mercedes and Chrysler.  So why the history lesson on platform sharing I hear you ask?, well it is an important trend in automotive manufacturing today and serves as an excellent way to reduce costs and improve profitability per vehicle.  So the question now is where will this leave Chrysler?, will they have to reduce their product portfolio to offset the additional costs of developing their own platforms once again?

Well the answer seems to be that they want to find new partners around the world, less than three days after the sale was announced, Chrysler were already talking about finding global partners to help grow their business.  Chrysler itself is an extremely strong brand which also incorporates another iconic brand, Jeep.  Cerberus felt that there was obviously something here that could be turned around and at the end of the day Daimler more or less paid Cerberus to take Chrysler off their hands.  However interestingly, as part of the deal, Daimler will retain a 20% stake in Chrysler. This was probably negotiated to ensure that Chrysler could retain the supply of key Daimler components, eg engines, switchgear and other underbody components. This is no different to the deal that Ford negotiated recently with Prodrive, the UK company that bought their Aston Martin division.  Ford will continue supplying engines etc and at the same time Ford gets to protect its intellectual property rights to the components that it provides to the Aston Martin range of cars.  This type of partnership agreement was essential to ensure the long term survival of Aston Martin and exactly the same deal has now been negotiated between Daimler and Cerberus.

Most private investment companies will try to look for some sort of exit strategy within a five to six year time frame, so apart from the obvious restructuring requirements within Chrysler it will be interesting to see how Cerberus can turn around this business.  They will be looking to cut costs significantly to improve profitability, they will be looking to streamline Chrysler’s supply chain and find global partners to reduce product development costs.  For this type of situation, outsourcing resource intensive parts of the business must be considered as a relatively easy way to help reduce costs across Chrysler.  Their B2B infrastructure will have to be reviewed for example, a plan worked out on how to separate this infrastructure from Daimler and then find a way to continue working seamlessly with the network of suppliers that they have built up during their time as part of the Daimler Chrysler Group.  This is an ideal scenario where GXS Managed Services could be introduced to help manage Chrysler’s B2B infrastructure.  As you may have seen from some of my earlier posts, GXS Managed Services basically allows a company to potentially outsource their entire B2B infrastructure to our company.  GXS Managed Services has been proven in many large companies worldwide as a B2B outsourcing solution which can help reduce network, transaction and overall B2B infrastructure costs.  With extensive restructuring going on in the automotive industry as a whole at the moment, it will be interesting to see how Cerberus handle the management of Chrysler’s suppliers.

I have been fortunate enough to visit the Daimler Chrysler Head Office in Detroit, a very impressive facility where no expense was spared in its construction.  One of the things I remembered from someone I spoke to during the visit was that the building was designed in such a way that sections of it could be easily partitioned off and converted into a large shopping mall if required.  Now I am not saying that this will happen but it was interesting that the architects of the building had the foresight to include this as part of the design of the building!  Chrysler will inevitably have to go through some sort of downsizing process but one thing is for sure, the company will come back leaner and meaner and ready to take on their key rivals Ford and GM.

So this is an interesting concept, if it were possible to conduct B2B trading in a virtual world, would companies use it?.  Well according to this story over on silicon.com  it may not be that far away. The virtual world Second Life , is a computer generated virtual world with nearly 6 million ‘residents’ and nearly $1.5Million ‘real world’ monies are exchanged on a daily basis.  Individual users sign up, choose an avatar or 3D likeness of themselves and then they can begin roaming around the virtual world.  Up until recently the virtual worlds were restricted to ‘visitor’ type attractions, such as the Kennedy Space Centre, but now large companies are starting to see Second Life as a superb marketing tool to showcase their products to a large and a fairly captive audience.  So here are some examples of what these companies are doing:

BMW have established a virtual car showroom to allow visitors to see their latest concept cars and see how they plan to develop their cars in the future.  I wonder if you will eventually be able to configure and order your car through Second Life in the future.  People said that online trading, eg buying a car through a website would never takeoff, but it has.  This way of displaying your products enhances the buying experience.

Picture credit: Second Life/Linden Lab

Cisco Systems have built their own house to showcase their networking technology and how it can be used to control all aspects of the house.

Picture credit: Second Life/Linden Lab 

IBM have built a whole campus which is used to explain what they do as a company, the type of products they sell and how companies are implementing their solutions.  In marketing we often use case studies to showcase how our customers use our B2B solutions, imagine how these case studies could be brought to life in a world like this.

Picture credit: Second Life/Linden Lab

So with companies entering Second Life, individuals buying goods, casinos offering online gambling, what you also need is a law firm to keep things under control!.  Just as law firms can offer companies advice on using the internet to conduct business etc, so a similar requirement is now needed in Second Life as well.  This is one of the reasons why the law firm Field Fisher Waterhouse have recently setup an ‘office’ in Second Life. 

Picture credit: Second Life/Linden Lab

Second Life is growing very quickly, housing a large virtual  population and big brand global companies fighting to get a presence, if the residents are able to buy goods from virtual shops, how long will it be before companies could  buy goods from each other?  If this happens, how do companies then manage this buying and selling process in a virtual world?  Will we see 3D virtual invoices being sent from one company to another, will we see bar code labeling somehow being applied to goods in the virtual world and then being able to track the movement of goods within second life?  The internet has totally transformed the way in which companies conduct B2B trading between themselves, are we now seeing a new type of trading environment emerging?

One thought I have had, picking up on the virtual bar code labeling idea above, what about if you could use this environment as a ‘visibility’ platform for tracking the movement of your goods from your suppliers or to your customers.  Today, visibility into the supply chain is one of the most important areas that companies want to improve.  RFID , bar code labeling etc have all been introduced to help improve the visibility of globally shipped goods.  What about if you could setup a virtual environment that simulated your supply chain and you could see in 3D where goods were within their shipping process.  For example setting up virtual distribution centres, cargo ports, airports etc, this could provide the holy grail of visibility solutions for companies wishing to improve visibility of shipped goods.

Another example is Google Earth, companies are already finding ways of exploiting this from a commercial perspective, for example VW are looking at using Google Earth as their next 3D mapping environment for their next generation satellite navigation system. Could Google earth be used in a similar way to Second Life for improving visibility into a supply chain?

So an interesting insight into the possible direction for future B2B trading environments, as mentioned earlier, the internet has transformed the way in which companies conduct business between each other, could these new 3D virtual environments provide the next generation B2B platform?, only time will tell.  My colleague Justin Duewel-Zahniser, who also posts on the GXS blog site, is very experienced in the use of Second Life and I am sure it won’t be too long before he posts his thoughts on the potential business opportunities for Second Life…