On September 21, BRAIN North America, Inc., a provider automotive business solutions, announced the purchase of BRAIN's Supply Chain products: SupplyWEB Enterprise� and BRAIN-ANX� by TI Group Automotive Systems (North America), which is a $2.4 billion supplier of fluid-handling systems to the automotive industry. The system will be rolled-out to 30 facilities in North America. SupplyWEB is ERP platform independent and will allow for seamless exchange of ordering and shipment information with TI Group's suppliers.
SupplyWEB is a product to manage supplier relations, procurement, performance, and keep manufacturers compliant with automotive industry requirements. Many automotive suppliers have reportedly felt trapped with the traditional methods of using just electronic data interchange (EDI), which is demanded by their original equipment manufacturers (OEMs). BRAIN claims SupplyWEB Enterprise makes communication and managing their suppliers much more efficient and affordable and helps the tiers keep in contact.
Suppliers can communicate via EDI or through the Internet to receive releases and send Advanced Shipping Notices (ASNs) in XML, HTML, and spreadsheet formats, as well as communicate performance issues and payments. The supplier can also download release data into a spreadsheet for manipulation. With SupplyWEB Enterprise, suppliers can log-on via the web for access to suppliers' latest inventory levels, allowing for supplier-managed inventory (SMI). Suppliers can view releases and purchase orders, view and respond to quality and delivery performance issues like Delivery Performance Reviews (DPRs) and Production Parts Approval Process (PPAPs), view overall supplier ratings, enter invoice detail and view payment information. SupplyWEB Enterprise therefore enables collaborative commerce (or C-Commerce).
The most frequently cited examples of the return on investment (ROI) by SupplyWEB Enterprise customers are significantly reduced inventory levels, decreased expedited freight costs, reduced line shutdowns, significant reduction in time spent managing suppliers, and significant reduction in DPRs.
BRAIN-ANX is a simple and inexpensive plug-in package whose "Mailboxing" feature may allow some users to dispense with current Value Added Network (VAN) expenses. Fully integrated with the BRAIN EDI application, direct communication eliminates the need for user intervention when either sending or receiving data. ANX and E-5 Server communications are relatively new to the Automotive Industry. This technology became available for several reasons; however, the two major reasons include:
- Much faster transmission speeds (9600 baud vs. T1 or T3)
- Guaranteed availability and throughput as certified providers must pass stringent testing prior to certification
BRAIN continues to compete with its two automotive-focused ERP packages, which are Xpert Manufacturing System, which runs on IBM's iServer (formerly AS/400) platform, and TRANS4M, which runs on UNIX and Windows NT server platforms.
BRAIN's parent company, BRAIN International AG, is headquartered in Breisach, Germany and was formed a few years ago from the merger of German ERP software developers BIW and Rembold + Holzer. BRAIN gained the TRANS4M solution when it acquired a US-based CMI-Competitive Solutions in September 1999 with a view to become the leading provider of ERP solutions to the North American automotive industry. The two products differ in their fit to different types of automotive suppliers, in addition to platform support. Xpert is better suited to mixed-mode manufacturing requirements (with EDI being an integrated component of materials requirement planning - MRP), whereas TRANS4M should appeal to manufacturers with a lean/repetitive production environment (with its work-in-progress (WIP) visibility, pay-point operations, multiple backflush methods, and other industry endemic functionality).
Having long been offering two automotive sector-focused ERP systems has allowed BRAIN International to meanwhile also garner Web-based software capabilities and domain expertise in supply chain communication. The automotive industry has unique characteristics that make it highly conducive to Internet-based supply chain optimization and collaboration. A car's complex bill of materials (BOM) results in many entities being involved in its making. Information transparency and supply chain integration are, therefore, the name of the game.
E-business technology, while not causing these requirements, is at least providing for their enablement. To that end, BRAIN has also been offering a suite of automotive-focused supply chain communication applications that integrate with multiple ERP systems. The platform agnosticism stems both from the need for stronger market competitiveness and from the homogenous back-office population within the customer base. While many existing customers run on one of BRAIN's ERP solutions, many others have legacy systems or systems from another vendor that they are not planning to replace any time soon.
As a result BRAIN has developed its e-Automotive Suite of B2B communication and collaboration applications, which also includes SupplyWEB Enterprise, a Web-based system for communicating procurement, shipment, payment, supplier performance, and many other types of information, catering thereby for almost every type of communication an automotive company has with its suppliers.
While extensible mark-up language (XML) holds great promise, the automotive industry has invested heavily in electronic data interchange (EDI) and will not dispense with an investment in something that has been working well. Perhaps, new e-commerce business processes such as MRO (maintenance, repair, and overhaul) components procurement will adopt XML right away, while in other cases, EDI might simply be moved onto the Internet. SupplyWEB therefore eliminates the need for all of the company's suppliers to install and maintain expensive and complex EDI connectivity. While sophisticated suppliers may still use their EDI investment, smaller suppliers' communication needs can be handled via SupplyWEB. As a matter of fact, the company deploying SupplyWEB may be under the impression that all its suppliers have EEDI, as BRAIN leverages the Internet as the means to help lower-tier, small suppliers get beyond manual re-keying of EDI transmissions.
The Internet also offers the potential to take integration to the next level, wherein Tier 2 suppliers will use Internet-based applications to view, in real time, inventory at Tier 1, sequencing their own production to match that of their customer, thereby reducing inventory and other expenses. The pressures that Tier 1 thereby places on Tier 2 will in turn be applied to Tier 3. The emphasis on just-in-time (JIT) production within automotive, by which suppliers deliver parts to the manufacturing tier above them only as needed (the pull-demand concept), therefore mandates tight production and financial integration between automotive tiers.
Just-in-sequence (JIS), another crucial component of the BRAIN suite, supports the requirements placed on automotive suppliers of "sequenced" products. With such products, the way that parts' orders and deliveries are planned, managed, and communicated need to be matched up precisely with customers' assembly schedules and processes. Sequenced manufacturing of configured parts has become ever more important as Tier 1 suppliers are required to build ever more complex subassemblies. Giving the end-customer more options makes it cost-prohibitive to stock all the subassemblies that may be required. JIS is envisioned to allow sequenced suppliers to receive customer communications and create a sequenced production schedule. Pick-and-pack shipping requirements of the sequenced supplier should also be met through the JIS product functionality.
Other notable components of the suite include a business intelligence solution that tracks key performance indicators (KPI) and provides an information analysis tools that will allow users to drill down and see what is happening on the shop floor; a product life cycle management (PLM) module; and a module that functions as an on-ramp to the Automotive Network eXchange (ANX) network used in the automotive industry. The ANX service is the Automotive Industry Action Group (AIAG) Internet communication link that provides secure access to automotive trading partners, and is envisioned to reduce the support, effort, costs, and time associated with existing communication schemes. Many major original equipment manufacturers (OEMs), including Ford and General Motors, have committed to ANX for supply chain communication, including transmission of computer-aided design and manufacturing (CAD/CAM), and EDI.
Challenges
Still, limited financial resources, undeveloped global channel and brand recognition, and continuation of developing two different products running on two different sets of platforms are the challenges BRAIN has yet to overcome. There is a lingering bitter taste of a difficult 2000when the company has to plead with the banks for a rescue package. Eventually, a bank in Munich stepped in, assuming 35% of the shares and the majority of the voting rights.
BRAIN also has to beef up its e-business offering possibly by integrating e-procurement and e-marketplace applications from Commerce One if it is to fend off QAD in their battle for dominance in midsize automotive market. Also, MAPICS, Glovia, Geac/JBA, Fourth Shift, ROI Systems and Lilly Software are some of the smaller vendors that have viable solutions for mid-sized automotive manufacturers in their quest to eliminate complexity and streamline operations and contain costs.
One should never forget about the large players like SAP, Oracle, J.D. Edwards, Baan and PeopleSoft that are entrenched within the automotive original equipment manufacturers' (OEMs) and Tier 1 suppliers' corporate offices, and have recently started addressing the required PLM and engineering change management (ECM) functionality. While they may still lag the above smaller brethren in their support for a day-to-day plant-level functionality, it is very likely that they will not sit idle in that regard either.
The current market trend industry-wide is towards vendors that can provide comprehensive solutions for medium-sized companies. BRAIN seems to have a fair shot at delivering that, given it offers to midrange automotive suppliers solutions that satisfy many of their IT needs-hardware, software, implementation, and training.
Potential and existing BRAIN automotive customers regardless of their size should certainly consider the offered product lines, bearing in mind what the competitors have to offer. As with all new releases, users should employ a critical approach in their evaluation of the products, and require the company representative to demonstrate specific technological and functional capabilities. At least, BRAIN should be evaluated to raise the bar for other vendors in the contest in terms of demonstrating their EDI, ANX, release accounting, JIS, repetitive purchasing, integrated barcode printing, lean manufacturing, and other e-Business processes pertinent to the automotive industry.
Also, the products' compliance with the most common industry standards such as Ford MS-9000, AIAG M.A.P., or QS-9000 should be probed. The lower tiers automotive suppliers in need of a plant-focused ERP system and of getting quickly and affordably on their e-Business feet would be the most likely beneficiaries from evaluating BRAIN.
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