FAL2021, the leading automotive supply chain event in Germany

Digitalisation relies on standards but where are we heading and who should be leading?

FAL2021 was the occasion to remind an audience of 600+ how international collaboration within Odette has benefitted the industry over the past four decades and to discuss future prospects.

Robert Cameron, Chairman of Odette International, hosted an international panel representing different links of the automotive supply chain to explore the next steps for international collaboration and standardisation.

For David Brindley, Material Flow Manager, Jaguar Land Rover, representing the OEM point of view, the “Connected Supply Chain” is about end-to-end visibility and coronavirus and Brexit have only served to emphasise the need to obtain the latest information more quickly from suppliers. He believes, however, that many OEMs are deterred from moving forward with more advanced visibility systems because of the risks associated with developing bespoke solutions while on the other side suppliers often resist change and obtaining their buy-in is a challenge. David stressed that suppliers need to be presented with initiatives that are common across the industry if we are to increase collaboration through the tiers of the supply chain.

David concluded that to facilitate quick on-boarding of the supplier base in the digital loop, we need more ‘plug and play’ off the shelf, easily customisable solutions that integrate industry standards. A hint to Technology Providers?

Markus Exo, Senior Key Account Manager, Duvenbeck, is the LSP in the middle. For Markus, data drives everything that Duvenbeck does and there is no effective digitalization without reliable, up-to-date, standardised data and processes. Markus emphasized the need for state-of-the-art technology to make big data manageable in operational processes. He also made a plea for simple, standardised KPIs to be adopted throughout the automotive supply chain which he believes would make full transparency much easier to achieve.

Jan Formanek, Corporate EDI Manager, SAS interior modules (a Faurecia company), represents a major Tier1. His daily job is to perform athletic EDI exchanges with more than ten OEM customers and over one thousand suppliers. One of the constraints he faces is that early EDI standards from the 90’s are still widely used, despite their well-known limitations. For Jan, these legacy standards hinder the adoption of new technology and prevent companies from realising the full potential of modern solutions.

Jan agreed with Markus that reliable data is king in supply chain management and there are still many areas of operations where digitalization can be improved. He gave several examples of processes where recent Odette standards could provide tremendous benefits if they were more widely implemented throughout the industry. In particular, he mentioned returnable packaging where the Odette community has developed a complete toolkit for the management of these essential and expensive pieces of supply chain equipment {link}.

Odette and its National Organisations provide unrivalled networking platforms where supply chain professionals and their service providers are able to develop and share solutions to the challenges they face. As we heard from our panel, the industry is now craving more transparency, flexibility and increased control of data and supply chain processes.

But who should take the lead to initiate standardisation: OEMs, Suppliers or Automotive Associations?

OEMs have the power to implement standards but are they prepared to modify their own systems and processes to allow a standard to be established? Effective standardisation obviously requires compromise whereas taking a unilateral approach undoubtedly results in additional costs and inefficiencies throughout the whole supply chain.

Suppliers are well placed to take the lead in promoting standardisation because they suffer every day trying to cope with the many different requirements imposed on them by their customers. Suppliers are also likely to benefit most immediately from standardised processes, whereas the advantages for their OEM customers are more long term as they reap the benefits from the efficiencies achieved by their suppliers.

Our role as an automotive association is to provide a platform where industry experts can come together to agree and develop standards. We are also able to assist in the deployment of those standards. Our 40 year experience at Odette has consistently shown that it is impossible to launch successful standardisation initiatives without the full support and commitment from companies across the supply chain.

With this support, Odette can continue to develop standards based on up-to-date technologies to help meet the latest challenges. But in order to ensure widespread and fast deployment, the industry needs Technology Providers to implement these standards in user friendly, flexible and scalable IT solutions. It seems clear that Technology Providers are the key to unlock the door to further digitalisation and they should be encouraged to become more actively involved in the development of standards for the automotive supply chain.

At the same time, directives from governments in terms of product compliance, reduced emissions and social responsibility are piling even more pressure on automotive supply chains. Digitalisation will no doubt provide some answers but there can be no effective digitalisation without standardisation and none of these challenges can be overcome by companies or countries working in isolation.

As John Sobeck, Vice President Materials Management Services and Supply Chain, ZF, commented during FAL2021: “Never before has the Odette Community been so important to foster international standards in SCM”. For David Lutzny, Director Automotive at cargo-partner, “Standards and understanding their importance are the only way forward”.

All actors of the supply chain have a role to play in the digitalisation game, so if you want to learn, share, influence and make the digital connection, get involved sooner rather than later.