Car makers rev up new e-commerce initiatives

When it comes to e-commerce, the Big Three U.S. automakers see bumps aplenty in the coming months.

For starters, Ford Motor Co. told the audience at the annual AutoTech conference last week that it is tearing out its decade-old Ford Supplier Network, the proprietary client/ server application that Ford trading partners have used for procurement and finance purposes. The automaker will convert its global operations and trading partners to a new Web-based application Ford calls eVerest.

Based on the Oracle Corp. 11i e-commerce application suite, eVerest will require Ford and its suppliers – an estimated 100,000 users in 25 countries speaking 12 languages – to go through an extensive training and registration process, along with maintaining old and new e-commerce applications during the transition.

For Ford and its suppliers, this will be a year of somewhat painful transition, says Sue Kobet, Ford’s director of eVerest Global Purchasing eBusiness

“The eVerest Supplier Portal will be used for manufacturing, purchase orders and request for quotes. Most suppliers will find themselves in eVerest and Ford Supplier Network for at least another year,” Kobet says. She adds that Ford is sending out notices now to the corporate security officers at Ford trading partners about the changes because it will involve new security procedures and controls.

The new commerce platform will still process electronic data interchange (EDI) messages for purchasing, remittance and shipping as the auto industry has for decades. But the focus will be squarely on moving to EDI over IP, with a phase-out of bisynchronous EDI with suppliers. For the first time, Ford will encourage suppliers to start using XML as an optional alternative to EDI.

“We see XML as a mechanism for data integration,” says Tim Thomasma, Ford’s plant floor systems architect. Ford wanted to gain real-world XML experience with suppliers using eVerest, he adds.

At last week’s AutoTech conference, representatives from DaimlerChrysler AG and General Motors Corp. also expressed keen interest in XML. The auto industry’s trade association, AIAG, which often takes the lead on auto industry standards, says it hopes to get the Big Three to agree on XML technical elements.

According to Pat Snack, a GM executive working at AIAG on industry standards, AIAG favours the Open Application Group’s Business Object Documents at this point for XML. “We’re trying to get critical mass behind XML and the way we use it,” she says. “With EDI, we ended up with the Big Three all doing something different, and we don’t want to have that happen with XML.”

Meanwhile, the Big Three are becoming frustrated over interoperability problems with the multivendor virtual private networking (VPN) gear used on the ANX, a huge privately run e-commerce network that is mainly for the automotive industry. As has been the case since the ANX was founded two years ago, the service is only provided by ISPs that have met strict quality controls approved by technical staff of ANXeBusiness, a division of SAIC that bought the ANX from the AIAG a few years ago. Trading partners that want to use ANX, including those outside the auto industry such as Boeing, must use IP Security (IPSec)-based VPNs to encrypt data with other ANX trading partners.

However, VPNs have been the sore spot for ANX because it has proven impossible to get different vendors’ VPN gear to work together despite extensive IPSec equipment testing. Erik Naugle, CTO at ANXeBusiness, explains: “The standard has enough loopholes [that] you can be compliant with the specification but not be interoperable.”

Currently, 40 per cent of the 1,300 ANX corporate customers use technology from Check Point Software Technologies Ltd., 25 per cent use Cisco Systems Inc., 20 per cent use Alcatel SA and 15 per cent use products from a mix of other vendors.

Fed up with VPN interoperability problems, Ford has gotten ANX to start offering a new VPN managed service called Tunnelz. The service is based on a single vendor’s VPN equipment that Ford will require its trading partners to use on ANX.

Tunnelz will involve ANX staff installing a Nokia VPN appliance at the user’s site and managing it remotely to establish VPN tunnels between ANX trading partners.

“We want to eliminate the variety of IPSec tunnels we have to deal with,” says Dennis Kirchoff, Ford’s ANX development leader. He adds that Ford and its 500 trading partners on ANX use it for volume batch EDI, CAD/CAM file sharing and mainframe access. Ford wants to establish service-level agreements for VPNs with suppliers, and the Tunnelz managed service is viewed as the way to do that.

Tunnelz will cost US$240 per year, per tunnel, a price Ford intends to keep low by subsidizing it. DaimlerChrysler also is considering using Tunnelz.

Some of the Big Three’s suppliers say Tunnelz sounds like a good idea. “I’m interested in it,” says Joseph Ciunciosa, programmer analyst with Gibraltar Steel, who says his firm has trouble getting the Cisco VPN/firewall to talk to Nokia Corp.’s.

The experience with ANX has convinced Ford and DaimlerChrysler that VPNs perform better when separated from the firewall function, although most ANX trading partners today use combined firewall VPNs.

“We’re going to use the Nokia CryptoCluster,” says Stanley Chan, WAN planning and project manager at DaimlerChrysler. “And we’ve separated the IPSec layer and the firewall layer to get better performance and better tolerance for problems that may happen.”

Still, GM last week showed flagging enthusiasm for ANX, saying it was taking a wait-and-see attitude on Tunnelz.

One GM official said the company might even organize its own VPN-based network over the Internet with suppliers.

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