General Motors this month begins exchanging shipping notices and other critical data with its Tier 1 suppliers using the new Covisint Connect messaging service.
By the end of this year, 6,500 supplier manufacturing sites will exchange data electronically with GM's North American assembly plants through Covisint.
Data that typically is exchanged in this manner includes shipping schedules, shipping notices, and invoices.
The change required rigorous testing, said Bob Booth, GM's acting process information officer in worldwide purchasing.
"We're taking an extremely conservative approach to this, as you would guess, given the mission critical nature of communicating supplier schedules, shipping notifications and those kinds of key communications," Booth said. "So we've been through an extensive testing cycle with about 12 key suppliers."
By using a common messaging hub to exchange essential documents, automakers and suppliers will no longer have to use a variety of third party communications networks called value added networks.
GM suppliers have been using an EDS Corp. network.
The amount of data that GM exchanges electronically with its suppliers is staggering - 2 million messages, or documents, per month. GM declined to reveal how much it will cost of what it plans to save by switching to Covisint Connect.
The data messaging service is not limited to just automakers and their supply base. Johnson Controls Inc., for instance, rerouted its own 1,200 suppliers to Covisint Connect during the first half of the year. Lear Corp. is in the process of rerouting its suppliers to Covisint Connect, a process that will be completed by October.
Other automakers are interested as well.
DaimlerChrysler has begun testing and evaluating the service, and Ford Motor Co. has expressed some interest in the service, says Bob Paul, CEO of Covisint, a subsidiary of Compuware Corp. in Detroit.
Both of the Tier 1 suppliers JCI and Lear have signed contracts with Covisint to use the messaging service.
Johnson Controls rerouted its electronic data traffic to Covisint Connect during the first half of the year. Johnson Controls' suppliers had been using Global eXchange Services and IBM/Advantis networks.
The first step was to get Johnson Controls' suppliers off of the third-party networks, says Susan Kampe, vice president of information technology - North America for the Automotive Systems Group. Johnson Controls' 1,200 suppliers exchange data now with 77 Johnson Controls plants through Covisint Connect.