GXS in Automotive. The Automotive Industry Today. How GXS Supports the Automotive Industry.

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1 GXS in Automotive The Automotive Industry Today The automotive industry has undergone an immense amount of change and restructuring over the past decade. Supply chains have had to become more flexible and responsive to changing manufacturer requirements, such as: Support for new manufacturing plants in emerging markets like Vietnam, Indonesia, South Africa, Thailand and Argentina (the VISTA countries) Consumer demand for more build-to-order vehicles has changed how car manufacturers source and manage their inventories Integration of mobile devices with vehicular infotainment systems has created a convergence of automotive and high tech supply chains Implementation of green technologies, including electric vehicles and associated charging infrastructures, has required significant investment Automotive companies need to improve how they work with global trading partners and find ways to reduce supply chain complexity in order to improve customer satisfaction levels. The continued globalization and restructuring of automotive supply chains, including the establishment of new manufacturing plants in emerging markets like Vietnam, Indonesia, South Africa, Thailand and Argentina, has forced many companies to re-evaluate their information technology (IT) and business-to-business (B2B) strategies. How GXS Supports the Automotive Industry Cloud-based B2B solutions enable automotive companies to deploy scalable B2B trading platforms anywhere in the world. GXS can provide connectivity to trading partners across the automotive value chain, regardless of the business processes that need to be supported, communication protocols being used, or document types being exchanged. GXS INDUSTRY LEADERSHIP A global company of over 3,000 employees Operations in 59 countries More than 45 years of automotive industry experience Largest automotive B2B community in the world 100% of the Automotive Companies in the Fortune % of the Top 10 Car Manufacturers 84% of the Top 100 Global Automotive Suppliers 100% of the Top 20 North American Automotive Suppliers 95% of the Top 20 EMEA Automotive Suppliers 85% of the Top 20 ASPAC Automotive Suppliers These types of solutions help companies address the following issues: Consolidate or Modernize B2B Infrastructures Nearly all automotive companies are trying to reduce costs to remain competitive in the market. Some automotive companies have outsourced production to contract manufacturing companies in low-cost countries. Others have divested under-performing business units. Extensive merger and acquisition activity within the industry has led many automotive companies to consolidate different B2B environments on to one common platform. Automotive manufacturers and their respective supply chains must have access to a single B2B network that can provide a real-time, 24x7 view of business transactions flowing across the extended enterprise. Consolidating B2B platforms also provides a good op-

2 2 GXS in Automotive portunity to integrate to enterprise resource planning (ERP) platforms. Outsourcing the consolidation or modernization of a B2B infrastructure can bring significant cost savings to an automotive manufacturing operation. B2B outsourcing provides the following benefits to a manufacturing operation: Significantly reduces operational costs associated with running a B2B infrastructure and managing a global community of trading partners Provides business continuity following a period of restructuring Enables B2B-related resources to be deployed across an automotive manufacturing operation on a scalable and flexible basis Allows the B2B infrastructure to be managed by the appropriate resource levels according to business demands Provides a way to expand an automotive manufacturing operation or onboard trading partners in any region of the world Offers a way to future-proof an automotive manufacturer s B2B environment, allowing new B2B technologies to be deployed with ease Consolidation of B2B environments onto one common platform allows automotive manufacturers to gain an improved view of cross-enterprise information Allows managers to make more informed decisions relating to the day-to-day management of their automotive manufacturing operations OFTP2, THE NEW COMMUNICATIONS STANDARD FOR THE GLOBAL AUTOMOTIVE INDUSTRY OFTP2 is a new Internet-based communications protocol that has been developed by the ODETTE organization. OFTP2 allows any type of file, including very large files such as CAD/CAM files, to be exchanged securely over the Internet. OFTP2 uses a combination of data encryption, secure socket layers and exchange of digital certificates to ensure that files are exchanged across the Internet with ease. Case Study: European Car Manufacturer A leading European manufacturer and distributor of luxury, sports and off-road vehicles. Following divestiture from their parent company this company had a requirement to establish their own B2B platform as quickly as possible. With the necessary B2B skills being retained by the parent company, this car manufacturer decided to implement GXS Managed Services to help with the onboarding of over 1000 trading partners around the world. Since deploying Managed Services this company has experienced exponential growth and has expanded their manufacturing operations to include India and China with a plant in Brazil planned for the future. The Managed Services platform provides the scalability and flexibility that this company needs as they expand their manufacturing operations around the world. More importantly as GXS is managing their B2B platform it allows this company to focus on their core competency of manufacturing vehicles for distribution around the world. Providing Global Supply Chain Interoperability Automotive companies need to be able to connect with trading partners located anywhere in the world using the most appropriate communication and document standards. As automotive production lines tend to be just-in-time (JIT) in nature, uninterrupted flows of business documents are critical to manufacturing operations. The advance ship notice (ASN) is probably the most important electronic data interchange (EDI) document exchanged between a supplier and a vehicle manufacturer. The ASN must be exchanged in near real-time with minimal disruption. GXS enables automotive companies to exchange

3 3 GXS in Automotive business documents electronically in a secure, fast and reliable fashion. In addition to providing mediation between any communications protocol or document standard, GXS offers automotive companies: Support for industry-specific communication standards such as Internet-based OFTP2 protocol Interconnections to the regional automotive networks such as the North American Automotive Network Exchange (ANX), European Network Exchange (ENX) and Japanese Network Exchange (JNX) A multi-data center, high availability infrastructure with data replication and automated failover Local support in all major manufacturing centers around the world including Europe, North America, Brazil, China, Japan and South Korea Case Study: Chinese Joint Venture Operation This joint venture (JV) between French and Chinese car manufacturers operates from a new manufacturing plant located in South West China and represents the largest JV operation in the region. The JV needed to import components and knock down car kits from their French partner to allow them to assemble new cars in China however the Chinese operation had no internal B2B skills. They also had no experience of working with western B2B standards or how to establish their own B2B platform to allow the exchange of forecast and order information. The JV implemented GXS Managed Services to look after the deployment of a B2B platform that could manage EDI transactions between the JV, their French OEM partner and their European based logistics provider. The solution also provides integration to their Oracle based platform. The new B2B platform allows this JV to connect with any trading partner around the world, irrespective of communication or document standard used and local language support allows any issues to be resolved with ease. AUTOMOTIVE COMPANIES FACE SIGNIFICANT ERP/B2B INTEGRATION CHALLENGES In a recent GXS-sponsored study, many automotive companies said they had experienced significant delays caused by ERP/ B2B integration issues. Other findings from the study included: 89% of respondents said they had experienced delays with ERP projects due to B2B integration issues 79% of respondents said they had lost B2B connectivity 61% of respondents said they were consolidating multiple disparate B2B gateways on to a common integrated platform 40% of the data feeding ERP systems is generated externally 79% of respondents have exceptions or problems on more than one percent of inbound B2B transactions Delivering Increased ROI on ERP Projects The global nature of the automotive industry has led to multiple ERP instances being deployed as new plants are opened in different countries around the world. One of the most common IT projects being undertaken today is to consolidate the number of ERP instances onto a smaller, more manageable set of platforms. Changes to ERP applications often impact the business transactions being exchanged with suppliers, customers and logistics providers. The internal data structures associated with forecasts, releases, shipment notices and invoices may change. For major ERP projects, such as moving from a legacy application to a vendor platform, the maps that convert data into EDI formats have to be completely rewritten. At a minimum, the maps and transaction flows need to be tested prior to deployment of the new ERP system to ensure that functionality remains intact. ERP testing efforts create resource challenges for IT organizations, which may have thinly staffed B2B e-commerce programs. GXS can provide a scalable, flexible resource to help keep ERP projects on schedule and under budget. GXS has broad experience providing integration services to automotive

4 4 GXS in Automotive companies who want to integrate to ERP platforms such as SAP and Oracle. Our services can help to: Ensure that projects remain on time and under budget through the use of scalable resources and knowledge gained through previous ERP/B2B integration projects Achieve faster ROI from the implementation of new ERP modules or adoption of new transaction types with rapid onboarding of trading partners Reduce risk of connectivity loss impacting production operations due to the ERP/ B2B integration platform being hosted on a highly available B2B environment Establish a firewall around ERP applications, ensuring that only clean and accurate data enters the ERP system and those downstream Expanding into Emerging Markets In recent years, much of the growth in the automotive industry has come from Brazil, Russia, India and China (the BRIC markets). A second wave of emerging markets such as Thailand, Vietnam and Indonesia are now beginning to receive an influx of foreign investment and development. In addition to selling vehicles in these fast-growing markets, automotive manufacturers are keen to take advantage of the lower-cost production opportunities and skilled workforces of these countries. Local governments are offering extensive financial incentives to encourage manufacturing investment within their borders. However, to take advantage of sales and manufacturing opportunities in emerging markets, automotive companies must be able to onboard new dealers, customers and suppliers in these regions quickly. Sensitivity to budgets, resources and experience levels is especially important in emerging markets. Many of the smaller trading partners are likely to have limited B2B integration skills. GXS offers a number of on-boarding and community management tools which allow even the smallest trading partner to exchange business documents with an automotive company. For small trading partners, GXS enables companies to exchange information via simple web forms or Microsoft Excel spreadsheets. Additionally, our Managed Services offering includes a comprehensive trading partner on-boarding service. GXS can work directly with your trading partners to educate, consult and implement new B2B integration projects. As a result, GXS can enable you to: Onboard suppliers or establish a manufacturing presence in a new region in a shorter time frame Avoid disruption across manufacturing operations as new trading partners are connected to the B2B platform quickly Improve the overall response time from trading partners and encourage greater participation in B2B-related processes Tracking Spare Parts or Finished Vehicles As manufacturing has become distributed around the world, a growing need has developed to improve the way in which spare parts and finished vehicles are tracked to their final delivery destination. Full end-to-end visibility of shipments can be difficult to achieve, especially when goods have to pass across increasingly complex supply chains comprised

5 5 GXS in Automotive of many international borders and transported via different multi-modal logistics partners. Tracking shipments or finished vehicles in order to gain visibility of expected arrival times and actual inventory levels can be difficult to achieve without having high levels of connectivity to logistics partners in place. The ability to inform a customer of expected delivery dates for spare parts or vehicles through improved supply chain visibility can help to significantly improve customer satisfaction levels. GXS offers a number of web-based solutions that provide the supply chain visibility needed to enhance customer/supplier integration and collaboration. Our suite of SaaS-based applications offer: Full end-to-end visibility of transactions across parts suppliers, logistics providers and border control agencies A single portal to view the status and location of shipments from multiple carriers across multiple modes of transportation A pre-configured network of transportation carriers and third-party logistics providers that can be leveraged without the need for onboarding Increasing Supply Chain Resilience In recent years, many car manufacturers and suppliers across the automotive value chain have been impacted by supply chain disruptions. In 2011, automotive supply chains were severely disrupted by an earthquake and tsunami in Japan and significant flooding in Thailand. As a result of these disasters, many automotive companies have implemented operational changes including using dual sourcing components, spreading the production risk by moving manufacturing to other locations and implementing control towers to improve disaster response times across supply chains. Many companies can build extra resilience into their supply chains by ensuring that they have all of their supplier contact information centrally managed. This way, communications can be sent out quickly to an entire trading partner community. Improving collaboration with trading partners, combined with improved levels of information management, can help to minimize supply chain risk and build stronger resilience into future supply chain disruptions. A community management and collaboration solution can help companies improve the way in which they manage day to day relationships with their trading partners and increase supply chain resilience by: Improving the management of trading partner-related contact information through a centralized, self-service contact database Increasing command and control of a supply chain through the use of mass broadcast communication tools and secure surveys with real-time visibility and follow-up Helping to understand the structure of a supply chain by mapping out all supplier relationships so that key suppliers can be highlighted and weaknesses can be identified quickly during a time of crisis

6 6 GXS in Automotive Why GXS for Automotive GXS has the broadest global coverage of any B2B integration provider, with direct operations in 20 countries and local support for 12 languages. GXS has a presence in each of the major automotive manufacturing centers around the world, including the United States, Canada, France, Germany, the United Kingdom, China, Korea, Singapore and Japan. GXS works with major automotive industry associations including AIAG in North America, ODETTE, High Tech & Logistics, Technical Standards Organizations, GALIA and VDA in Europe and JAMA in Japan. GXS solutions help automotive companies to: Utilize external resources to help consolidate or modernize a B2B infrastructure and develop a flexible B2B platform that can grow according to the needs of a business Provide interoperability to all regional networks such as ANX, ENX and JNX and provide support for the latest communication protocols like OFTP2 Ensure that ERP projects remain on time and under budget through the use of scalable resources and knowledge gained through previous ERP/B2B integration projects Enter new markets and onboard suppliers in any region of the world, allowing accelerated growth in emerging markets Improve end-to-end visibility of both spare parts and finished vehicles Minimize supply chain disruptions through improved information management and collaboration About GXS GXS is a leading B2B integration services provider and operates the world s largest integration cloud, GXS Trading Grid. Our software and services help more than 550,000 businesses, including 22 of the top 25 supply chains, extend their partner networks, automate receiving processes, manage electronic payments, and improve supply chain visibility. GXS Managed Services, our unique approach to improving B2B integration operations, combines GXS Trading Grid with our process orchestration services and global team to manage a company s multi-enterprise processes. Based in Gaithersburg, Maryland, GXS has direct operations in 20 countries, employing more than 2,800 professionals. To learn more, see read our blog at and follow us on Twitter at You can also access our public filings with the Securities and Exchange Commission at Copyright 2013 GXS, Inc. All Rights Reserved. November 2013 A NORTH AMERICA AND GLOBAL HEADQUARTERS GXS 9711 Washingtonian Blvd. Gaithersburg, MD US t t SOUTH AMERICA BRAZIL GXS Brazil Rua Bela Cintra 1149, 9 andar CEP: São Paulo, Brasil Tel: EUROPE, MIDDLE EAST AND AFRICA HEADQUARTERS UNITED KINGDOM GXS Limited 18 Station Road Sunbury-on-Thames Middlesex TW16 6SU England +44 (0) t ASIA HEADQUARTERS HONG KONG GXS International Room /F China Resources Building 26 Harbour Road Wanchai, Hong Kong t JAPAN HEADQUARTERS TOKYO GXS Co., Ltd. Akasaka Intercity 3F Akasaka 1-chome Minato-ku Tokyo Japan t