Infor Gives Hitachi Auto’s Partners a Leg Up on EDI
July 31, 2007 Alex Woodie
The recent implementation of Infor‘s SupplyWEB supplier relationship management (SRM) software at Hitachi Automotive Products should have a big impact on how Hitachi communicates with its suppliers, particularly when it comes to its smaller vendors that can’t justify the expense of installing and running their own EDI system. With a hosted solution based on SupplyWEB, suppliers now need only a Web browser to link to Hitachi.
Hitachi Automotive Products (HAP) is a division of the Japanese industrial giant Hitachi that manufactures electronic, mechanical, and electro-mechanical powertrain components, such as starters, alternators, inverters for electric vehicles, fuel injectors, sensors, and “infotainment” consoles. From its factory near Louisville, Kentucky, HAP-KY makes and ships a variety of original and replacement parts for nearly all of the world’s large auto manufacturers.
In addition to supplying finished components to automakers and parts warehouses, HAP-KY is the final destination for parts and raw material culled from a large network of smaller suppliers. While its i5/OS-based System21 ERP (implemented in 1997) provides the computational backbone required to communicate with the large channel masters at the top of the food chain, many of HAP-KY’s smaller suppliers lack the technological sophistication needed to set up and run EDI communication systems that keep buyers’ and sellers’ schedules in synch.
HAP-KY faced a degree of inefficiency because not all of their suppliers were hooked up with EDI. HAP-KY could disseminate its requirements schedule to its suppliers, but some of its suppliers had no effective way to respond to the schedules, to HAP-KY’s detriment.
HAP-KY addressed this problem with SupplyWEB, a SRM product that, among other capabilities, enabled HAP-KY to extend basic EDI capabilities to its suppliers, without forcing them to buy, install, and manage EDI translation products and the associated computer hardware. SupplyWEB runs on Windows and Linux servers, but HAP-KY elected to have Infor run it for them on its servers, and allow HAP-KY’s suppliers to access it over the Internet.
SupplyWEB has just gone live at HAP-KY, so it’s too early to draw absolute conclusions about its effectiveness. If all works as planned, however, HAP-KY should be seeing a big boost in its ability to predict the flow of parts and raw material from its suppliers, thereby improving employee productivity and increasing customer satisfaction.
Here’s how the updated system will work: HAP-KY’s suppliers log onto SupplyWEB through the product’s Web-based Java interface, where they can review schedules generated from the System21 ERP system, and send confirmations back to HAP-KY. Once that information has been updated in SupplyWEB, the software sends an Advanced Ship Notice (ASN) via EDI back to HAP-KY’s System21 ERP system, thereby closing the scheduling review and confirmation loop.
Kevin Piotrowski, Infor’s director of industry and product marketing, says SupplyWEB will improve HAP-KY’s ability to communicate with its suppliers. “The key message is it’s giving small suppliers that don’t have the ability to do [EDI], that don’t have sophisticated tools–maybe just PCs–now can do all replenishment and meet all of Hitachi’s requirements without having to buy all that stuff,” he says.
Robin Riley, the senior manager of IT business systems at HAP-KY, sounded confident in the selection of Infor for the new SRM solution. “Infor is helping us resolve our business challenges by delivering solutions with rich functionality, so they were a natural selection when it came time for us to implement an SRM solution,” Riley stated in a press release. “SupplyWEB provides seamless communication with our suppliers, which enables us to rationalize fulfillment discrepancies without impacting the customer.”
But EDI is just a part of SupplyWEB’s capability, according to Piotrowski. The software also offers other features, including support for Kanban processes, financial controls, e-mail alerts, and generation of supplier scorecards for rating suppliers. “It does the EDI, but it does a whole lot more,” he says.
More than 25,000 customers use SupplyWEB, Piotrowski says. At about 10 years old, the core SupplyWEB product is mature, although it has been augmented in recent years with technology obtained in Infor’s June 2003 acquisition of Future 3 and its December 2002 acquisition of BRAIN North America.
Pricing for SupplyWEB is based on the number of factories using it, the number of modules installed, and the number of suppliers connecting to it. The cost for a manufacturer with a single plant would likely be around $20,000, according to Piotrowski.