Electronic data interchange is the key to faster, more efficient business between automakers and their suppliers.
Automakers see it as an efficient way to put together vehicles.
When suppliers are linked up, their customers know when a component is shipped, what truck it is on, and even how it is packed within minutes after the part is made.
But participation is far from free, and with technology evolving rapidly, some small suppliers are afraid they might pay a lot for software that quickly becomes obsolete.
Eric Christ, director of custom applications for Harbinger Corp., an electronic commerce software company in Atlanta, said that even though electronic data interchange is 'standard,' each company has its own way of doing it.
'I think lots of people, at times, are sort of negative about EDI. You ask them `Why are you doing EDI?' and they say `Because a customer told me I had to,' ' he said.
To participate, a supplier must buy software and network connections costing $7,500 to $10,000. Then the supplier needs a special template for each customer that mirrors the invoices, inventory or bid forms used by that customer.
Each template costs about $200, and costs can mount rapidly. Since General Motors, Ford Motor Co. and DaimlerChrysler all use unique versions, a supplier doing business with all three might need three sets of templates.
Each time a customer changes a form, a new template must be purchased. Christ said one small tooling company he has worked with has 11 customers, each requiring up to five different templates.
For smaller customers, companies such as Harbinger offer translation services over the World Wide Web. While that lets a small supplier participate in electronic commerce, the service cuts out a key advantage electronic commerce is supposed to offer: direct connection with the customer. And it represents a continuing cost to smaller suppliers.
The technology brings benefits to users. Electronic data interchange can eliminate a lot of clerical work, particularly the need to key-punch data generated by one computer system into another.
But the technology has gotten a bad name because of the way it is being required, he said. 'They're pushing EDI down the supply chain,' he said.
For some suppliers, there's a strong urge to push back.