Data Standards for Data Communication
Data standards have been around for decades to simplify business-to-business communications. However, instead of having one standard streamlining the data exchange between different stakeholders, it got more complicated as sub-standards, and in-house data formats also manifested over time. Currently, different systems and applications use different data standards and formats, resulting in parallel a mature and imperative technology for data harmonization in trading partner data exchange.
Standards improve data quality and compatibility, making the collection and reusability easier. It reduces redundancy, time, and effort of reconciliation, iterations, manual interventions, or corrections, and finally, it reduces the cost and complexity of data communication. If the benefits are obvious, why would not then everybody use the same standards, eliminating any need for data mapping and translation?
While standards have rewards, developing or using one or a new one also comes with many challenges. On the one hand, it could be the strategy, focus, target, or joint agreement of such development or the level of standards, resources, or required investment needed. Even in the last phase, adopting a potential standard could face several issues in implementing the changes. One of the most significant standardization issues is the ever-growing “gap” between the old legacy technologies and the new cloud-based applications.
The electronic data interchange (EDI) standards may be the most known, but a few evolved and presented a specific challenge for companies instead of a single standard. The following diagram shows the main ones.
On rare occasions, multiple parties use the same data standard with the exact specifications, meaning they cannot avoid data mapping and translation during business-to-business messaging.
In addition, with the new web applications spreading, application programming interfaces (API) have become essential in B2B data sharing. Since these were more popularized about a decade ago, web APIs have been published in many competing standards based on how the information is transmitted, different formats, and how the data is structured. The ecosystem of APIs is generally moving away from complicated transaction standards (like SOAP) toward lightweight ones based on HTTP, such as the REST (Representational State Transfer).
Recently, we have seen significant efforts in the automotive industry to create data communication standards for finished vehicle logistics, led by the associations of ECG, ODETTE, VDA and collaborating with major European OEMs. The announced recommendation covers the main FVL business processes providing clear direction for OEMs and LSPs for standardized data messaging. These message formats are slowly going around in outbound logistics in Europe. However, until these become a collective understanding, all parties in the supply chain still need to deal with the multiple data standards in use.
Highlights of using a Communications Hub
The transportation industry is defined by inconsistent standards and practices, creating operational inefficiencies that add cost and complexity to the logistics networks. To sufficiently solve these challenges, a proper Solution Provider must serve as a communication hub between OEMs and LSPs. They need to seamlessly connect all parties in the vehicle supply chain and ensure end-to-end visibility in one place.
Ideally, a committed operations support team also manages the systems to provide clean and accurate information by validating all data and resolving potential issues, resulting in only reliable and relevant data being utilized in business decisions. This solution works with all the different file formats (EDI, API, flat files, xml, etc.), taking in a wide variety of data from multiple sources and integrating it into one complete database to allow users to make effective decisions based on consolidated, real-time information.
Having all information collected and consolidated, the communication hub creates a sufficient basis for comprehensive control tower services, enabling organizations to understand, prioritize, and resolve critical issues in real time. Supply chain and logistics executives are under enormous pressure to provide customers with what they need, when and where they need it. While also optimizing supply and demand operations to achieve their cost-saving targets. This is especially challenging in times of unpredictable yet inevitable vulnerabilities and disruptions.
Having end-to-end visibility all in one place enables collaboration across teams and trading partners and preserves organizational knowledge to improve and accelerate decision-making, results, and expected outcomes. Ultimately, this helps you better predict disruptions, improve resiliency, manage exceptions, and respond to unplanned events to find the correct answers daily to solve your logistics problems.
Contact ICL Europe – your partner in finished vehicle supply chain optimization – for more information on how we can support your data communication and logistics reporting needs.
Sándor joined the ICL team in September 2020, intending to define our future within the automotive sector within Europe. Sándor is an expert in logistics process management, process improvement, logistics network planning and optimization, logistics services procurement. He also has a background in production management and logistics, with almost 20 years of work experience in the building and automotive industries.
In the previous two-part series, we look at challenges with supply chain inefficiencies and data standards and how to combat this and more about the future of digital solutions within finished vehicle logistics