Extraordinary Extranets: Examples
Here's a couple extranets examples especially of interest to manufacturers and distributors:
The Big 3's Network
An extranet's primary benefit is in its ability to wring out costs in the supply chain. Extranets can help companies to finally realize the benefits of Just-In-Time (JIT) inventory systems, a goal that Electronic Data Interchange (EDI) failed to achieve. EDI fell short where it came to the product selection process. It worked well for order exchange and payment exchange, but offered nothing to support product selection problems. EDI was expensive to implement and did little for the smaller firms other than reduce the fears of losing business if EDI wasn't in place. Often, critical electronic data interchange (EDI) and computer-aided design and manufacturing and engineering (CAD/CAM/CAE) file transfers are performed through several different communications protocols. Unless every company that wishes to participate in information sharing is able to handle these various protocols, the collaborative environment can't exist.
Today, the Big 3 automakers, Chrysler Corp., General Motors Corp., and Ford Motor Co. are building a collaborative extranet that links them to their suppliers through designated ISPs via a managed, virtual private network (VPN) called the Automotive Network eXchange (ANX). It's estimated to drive billions of dollars in costs from the supply chain. ANX replaces 50 to 100 direct dial connections to the automakers, reducing telecommunication cost up to 70%, but the real payoffs are in speeding and easing communications between suppliers and manufacturers. ANX will be used to electronically route product shipment schedules, order information, CAD files for product designs, purchase orders, and other financial information. The improved exchange of information should result in new business practices between vendors and manufacturers. "They'll be holding information rather than inventory" states Laura Migliore, a Chrysler Corp. process control specialist.
ANX is designed to be a single, secure network for electronic commerce and data transfer. It promises to alleviate the industry's chronic design cycle problems by allowing the Big Three to collaborate in real time with their suppliers over secured areas of the Internet. Upon its completion, portions of the ANX will theoretically enable simultaneous engineering using multiple workstations or graphics terminals to run finite element analysis software, solid modeling CAD packages or even high-speed prototyping with the fastest communications links. The network will provide the bandwidth required, not just for CAD/CAM but also for applications such as advanced videoconferencing and three-dimensional virtual reality design sessions. The new network is supposed to cut the cost of doing business, but more importantly, it will speed new automotive designs. Automakers have struggled with a five-year design cycle, and they want to knock that down to less than three years."ANX is the kind of network I think has enormous potential," said Doug Buchanan, senior specialist of applications development at Dofasco. Currently, Dofasco sends its steel parts designs to Ford via file transfer protocol. Ford does finite element analysis on the designs before transferring the data back to the steel supplier. With ANX, collaborative or interactive CAD is possible. "My perception is that most of the technology to collaboratively do CAD/CAM over networks is there. ANX will help facilitate that."
HOPS For The Web
Heineken USA began rolling out their Heineken Operational Planning System (HOPS) extranet last year to tighten the links between the brewer and its network of regional suppliers. With HOPS, resellers can log-in, place their monthly forecasts for sales and place product orders. "Now, beer from our brewery in Europe can make its way through the US retail channel in just about the same time it takes Anheuser-Busch to ship from its domestic breweries. We can react faster than ever before" states Heineken's vice-president Dan Tearno. By the end of Summer 1997, 80% of Heineken's sales will be integrated into HOPS. Heineken expects that investments in the system will be paid back within one year.
Comments are welcome
Created: Aug. 27, 1997
Revised: Aug. 27, 1997