The supply chain looks to open standards

When it comes to the exchange of documents along the value chain, the scenario faced by shipping services provider Pacific International Lines (PIL) is one shared by many companies in the logistics and manufacturing sectors.

"Bigger customers expect the shipping line to comply with their requirements - some come with Edifact, some with flat files, and we have to tailor our format according to their standard," said Tan Chew Eng, general manager, Information Technology, PIL.

Some time ago, the company invested in enterprise application integration software, but that has not solved all its problems, said Tan. PIL finds itself still having to support different data formats required by its bigger customers.

A different set of challenges confronts the company when it services smaller customers. "Some of these companies do not have a system of their own, and we have to re-key in the data. If mistakes are made, for example, in the bill of lading, it may not be possible to submit the document on time at the next port."

Within PIL itself, flat files are the preferred format because they are much faster to process. However, if its agents do not have the latest version of the software, there would be difficulty reading the file. "We have to ensure that the software is synchronized," she said.

The main challenge in supply chain management is to develop an ecosystem of partners who can agree on the adoption of standards and are willing to exchange documents" said Wee Hian Siew of CSA Singapore.

"You have to get manufacturers, logistics companies and other players to agree to exchange information intelligently," he said.

Standards such as XML (extensible markup language) promise to facilitate this exchange.

Han Chung Heng of IBM spoke about the adoption of an open standard, as opposed to defining the standard. "To define a standard for all would be more difficult than for people to adopt an open standard, especially in the supply chain world," he said.

Dr Justin Lim of Stats ChipPac said standards like those from RosettaNet do enhance the ability of companies to connect with each other. "It does help with the public aspect of connectivity, and reduces some of the ambiguity in the protocol," he said. RosettaNet is an organization developing a standard dictionary of definitions for product and transaction properties using XML for the exchange of documents in the electronics and IT industries.

Teo Chin Seng of ST Engineering sees open standards such as XML superseding entrenched formats like Edifact one day. But, he pointed out, the problem that companies are facing right now is the shortage of XML skillsets in the market. As Tan of PIL also highlighted, "It might be easy to introduce new data fields (with XML) but where can I find the programmers, and what tools do I use?"

Then there is the lingering question of interpretation - even where open standards are in place, variations in interpretation occur.

As Daniel Wright of SSA Global put it, "Communication does not automatically mean understanding or business value. Technology is just an enabler."

End users still have to grapple with the difficulty of getting vendors to agree on so-called standards. "They say they are using open standards, but when it comes to implementation, you still need two vendors to sit down and discuss their open standards to make sure things work together," Ho Choo Kian of Comfort Transportation noted with some irony.

Even for entrenched formats like Edifact, there is no universal interpretation, pointed out Vijaykumar Shah of Logipolis.

"It will take a gorilla to make open standards work," he said, giving the example of Walmart and its push for RFID adoption among its key suppliers.

In an open world, according to Vijaykumar, if businesses get their software from Vendor A and the vendor goes bankrupt, they will not be left orphaned.

It is what Teo calls "the first principle of openness". "If I do not like the support I am getting from a vendor, I should be able to move the system over to someone else lock, stock and barrel."

He recalled how, many years ago, he had to pay US$350 for a TCP/IP stack whereas today, it comes free as a matter of course, because it is truly open. "Openness is not a label on the door," he said. "It is what you get where the rubber hits the road."

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