Wednesday, January 28, 2009

Automotive Industry Suppliers are Investing in IT and EDI Process Improvements

Paralyzing economic conditions and budgetary restraints are motivating some automotive industry suppliers to act now rather than later. Nemak, a subsidiary of ALFA, a Mexico-based global manufacturing company that has more than 48,000 employees and operates 75 production facilities located in 17 countries is an example. Due to recent acquisitions of various businesses, Nemak’s operations around the world have more than doubled. As a result of this rapid expansion, the complexity and volume of EDI transactions has also increased. The company had various ERP solutions in place and multiple B2B platforms to support, with no way to centralize EDI coordination and management. The result of these inefficiencies was duplication of work and unnecessary expenses.

Nemak chose Crossgate, the global experts in business-to-business integration (B2B) for SAP, to assist in the consolidation of its B2B operations to reduce complexity and expenses. “Electronic data exchange is vital to the success of business processes in the automotive industry, and we work with over 100 business partners,” said Christian Fischer, Nemak IT Director Nemak Europe & China. “We needed a strong, reliable, competent, and experienced SAP partner to help us implement a fully outsourced global B2B integration service.” After evaluating five potential vendors, Nemak selected Crossgate because they could provide professional B2B methodology and experience as well as a well-developed repository of ready-to-run B2B mappings, a strong SAP relationship, and 24/7/365 support.

Prior to implementing SAP ERP, Nemak’s EDI operations were costly and time-consuming. “With so many B2B platforms to manage, our IT staff was overwhelmed,” Fischer noted. “Two of our most pressing concerns were controlling IT costs and ensuring regulatory compliance for each location. Crossgate helped us consolidate our B2B platforms in alignment with a centralized SAP ERP solution that gave us flexibility to continue expanding our network in a more efficient, cost-effective way.”

Crossgate’s B2B 360 Services will complement Nemak’s SAP rollout by migrating the company’s EDI partners to the Crossgate network prior to the SAP go-live. As a result of implementing EDI Managed Services, Nemak will gain reuse and economies of scale while being able to reposition IT staff to core SAP functions.

The initial rollout project in Nemak’s U.S. and European offices has already been completed successfully. The second rollout is currently underway in a cluster of locations in Europe and the United States. The projected timeline calls for all 28 rollouts on three continents to be completed by the end of 2009 by deploying parallel clusters in Europe and the United States. The project calls for a wide variety of data formats like ANSI X.12, VDA and EDIFACT as well as a number of communication protocols including AS2, oFTP,VAN, HTTPs and others.

“Crossgate is performing very professional project management and implementation work,” Fischer said. “Until now our business sites were all using different B2B solutions without central coordination or involvement. The advantages of using the EDI Managed Services provided by Crossgate will be a tremendous benefit to all Nemak sites worldwide."

Kevin Benedict
EDI/B2B Blog -

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