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					      Since its inception in 2002, the Motor Industry Supply Chain Competitiveness Improvement Programme (MISCCIP) has
      been influential in strengthening South Africa’s automotive supply relationships. Now this locally developed e-business
      platform developed by Collaborative Xchange (CX) and managed by the AIDC, is aiming to provide a similar supply chain
      benefits to the aerospace industry.


      AeRoSPACe, tHe NeXt FRoNtieR
      CROSSING OVER                                                                    fulfilment relationships between the industry’s original equipment
      Building on its successes in integrating and streamlining supply                 manufacturers (OEMs) and the OEMs’ suppliers – first- and second-tier
      chains within the South African automotive industry, e-business expert           providers of components and sub-assemblies. Every supplier and OEM
      Collaborative Xchange (CX) is adapting the automotive model for                  runs a supply chain and messaging platform unique to that company,
      use in the aerospace industry. Known as the Aerospace Supply Chain               whether electronic and integrated with enterprise backend systems,
      Improvement Programme, or ASCIP, the new venture was commissioned                a combination of automated and human workflows, or even paper-
      by the Department of Trade and Industry’s Aerospace Industry Support             based flows, augmented by e-communications like e-mail or fax.
      Initiative (AISI), and will be in pilot for the six months to May                       Each supplier, logistical service provider (freight and forwarding
      2007. Its creation was inspired by the Motor Industry Supply Chain               companies) and OEM in both industries has relationships with one or
      Competitiveness Improvement Programme (MISCCIP), commissioned                    several of the other types of players. In automotive for example,
      in 2002 by the Automotive Industry Development Centre.                           this could see OEMs like BMW, Ford, Fiat, Nissan or Daimler Chrysler
              In recent years, MISCCIP has succeeded in mobilising the local           SA ordering supplies from any permutation of Feltex, Behr, Dorbyl
      automotive industry to bring together the disparate supply chains                or hundreds of others. “It used to be the case that for every new
      of the various roleplayers for greater efficiencies, cost savings and            relationship, a new supply chain was purpose-built,” says Leppan. “But
      competitiveness, thereby enabling them to tackle the pressured global            because each differed in many subtle ways, the resultant industry-
      marketplace from a position of strength. As the brainchild of the                wide supply-chain complexity was wasteful, requires excessive
      Automotive Industry Development Centre (AIDC), “MISCCIP’s brief was              maintenance, and put local operators at a distinct cost disadvantage
      to integrate and simplify supply chain processes and to ensure full              when competing against their international counterparts.”
      visibility for all involved,” says Barlow Manilal, programme manager at                 The remedy was MISCCIP, and all eight local automotive OEMs
      the AIDC. “By replacing the various messaging standards with a single,           and over 270 local suppliers now use the single, integrated supply
      ‘any-to-any’ message switching system for the entire industry, we would          chain management platform. The benefits to all have been immense.
      enable more efficient order-to-delivery processes, and realise greater           “MISCCIP has given us a single, secure and automatic clearing house
      downstream efficiencies in areas like production planning, supplier              for electronic data interchange with all the automotive manufacturers,”
      forecasts and stockholding.” It now offers full supply chain visibility to       says Gary Hollins, IS manager for Feltex Automotive. “It has removed the
      every industry player, irrespective of their core IT systems, leading directly   need for us to program our systems for each individual OEM’s unique
      to its successes being sought out by the aerospace industry.                     data format requirements. Collaborative Xchange knows our data
                                                                                       formats and those of the OEMs intimately, and can bring them together
      SIMPLE IDEA, COMPLEX EXECUTION                                                   in communications between the OEMs and us so much more quickly.”
      The concept in both industries is simple enough, says Peter Leppan,                     The logical next step was to extend the experience gained
      general manager of CX. There exists a tangled web of ordering and                through MISCCIP to other industries.




178   THE E-BUSINESS HANDBOOK
                                                                                                                    case | study


GREAT EXPECTATIONS
Based on MISCCIP, great efficiencies and cost savings were envisaged
                                                                             miSCCiP ReviSiteD
from the integration of aerospace supply chains locally and                  • Adopters of the system have extended it to second-tier suppliers and
internationally. This is real e-business, which promises transparent           international OEMs.
workflows across corporate boundaries and in turn paves the way              • MISCCIP receives vehicle tracking signals from three OEMs along the
for applications like MISCCIP and ASCIP to give absolute insight               production line.
                                                                             • Some suppliers and OEMs are adopting international communications.
into correct stock levels and enable just-in-time manufacturing and
                                                                             • A number of local suppliers are transacting electronically with
supplier forecasting.                                                          international customers.
       When the Department of Trade and Industry established AISI,           • Some OEMs require that suppliers print labels and attach them to
they approached the CSIR and CX to undertake the project. Chanel               components they ship, but label requirements differ among OEMs. CX
Schoeman, programme manager for ASCIP at the CSIR explains:                    allows printing of OEM-specific labels, which in some cases are required to
                                                                               tie up to ASNs sent by suppliers, allowing automatic scanning into stock.
“Like MISCCIP, ASCIP seeks to create a Web-based supplier portal for
                                                                             • RFID is a strategic future direction, and is in pilot involving Chep, UTi,
South Africa’s aerospace industry, providing a central message switch          BMW, CI Shurlok, CX and the AIDC.
and standard trading and communications channels. The ultimate               • Reporting and alerting functionality provides an exception-based solution
aim is also the same – creating greater supply chain visibility that           to supply chain problems.
will ultimately increase the industry’s global competitiveness”              • Some first-tier suppliers are adopting MISCCIP processes between
       The pilot phase saw the roll-out of the solution at local OEM           themselves and their second-tier suppliers leading to extended visibility,
                                                                               savings and efficiencies further down the supply chain.
Aerosud and 16 of its suppliers – including five local BEE companies,
                                                                             • E-waybills will reduce manual and duplicate processes and further
eight other local suppliers and three international suppliers. The             improve visibility and data quality to benefit LSPs. It will also help
solution envisaged inbound and outbound supply chain electronic                suppliers reduce manual capture and recapture of information.
data interchange functionality for all involved. Suppliers would             • An affordable and easily deployed hosted ERP solution is being
receive purchase orders, send acknowledgement of receipt of orders,            investigated.
                                                                             • Some suppliers are pushing for MISCCIP’s extension to the parts and
perform status updates, send advanced shipping notifications and
                                                                               accessories business. This is currently in place with GMSA and being
receive ‘goods received’ notifications. The end goal is for an                 reviewed by Nissan and Ford.
extended industry roll-out to suppliers like Saab Grintek, Reutech           • News functionality allows OEMs to post events to suppliers
and Altech, and OEMs like Denel, ATE and others, provided the                • Discussions are under way on ways to adopt invoicing in MISCCIP. With the
transaction volumes justify it and industry participation becomes a            release order, ASN and GRN all part of the process, the ability to perform a
                                                                               three-way match already exists. Moving this into an ability to raise invoices
reality, says Schoeman.
                                                                               based on what OEMs received should see a reduction in the number of
                                                                               credit notes, payment administration and the time taken to pay.
BIG AND SMALL                                                                • MISCCIP is finalising local and international OEMs supply chain
Johan Steyn, managing director of Aerosud Interiors, a division of             integration.
Aerosud, says that when Aerosud saw what automotive was doing, they
wanted a similar standard too. The need was dire, as purchase order
releases from Aerosud and proof of receipt by suppliers was critical         trick there is to continue delivering new solutions that contribute
for supply chain management. “The aerospace industry supply chain is         to the continued success and competitiveness of the industry. For
long, with up to 120 days from raw materials supply to manufacture.          aerospace, there is still some way to go, but we anticipate tremendous
Before ASCIP, supply chain efficiency depended on forecasting tools          growth. But depending on volumes, efficiencies and the right charge-
and strict adherence to supply chain rules. We wanted a better audit         out models, this venture will contribute immensely to both the global
trail, to close the communications loop”, explains Steyn.                    competitiveness of local OEMs as well as the empowerment of smaller
        According to Schoeman, most OEMs have fully integrated supply        suppliers, and will ultimately benefit the entire country.
chain systems, but many suppliers don’t. ASCIP is therefore a highly
attractive proposition to managers, not only due to the perceived
business benefits, but also due to the ease and speed of adoption, with
small suppliers only requiring Internet access. “Orders enter the system
automatically from Aerosud, and suppliers can see them on the Web
interface and get automatic e-mail notification. This means orders are
resolved quickly, and there is better tracking. The portal will also carry                                              Barlow Manilal
OEM feedback, something that has been lacking before.”                          Peter Leppan                            Programme Manager
                                                                                General Manager
                                                                                                                        Tel: 012 564 5250
FIRST SUCCESSES                                                                  Tel: 011 523 4813                      Fax: 012 564 5301
                                                                                 Fax: 086 521 3455                      E-mail: bmanilal@aidc
                                                                                                                                              .co.za
                                                                                                        xchange.co.za
Leppan of CX concludes: “The main thing is to get collaboration across           E-mail: peter.leppan@c                 URL: www.aidc.co.za
                                                                                 URL: www.c    xchange.co.za
the entire industry, not just of one or two players. Many solutions can
be hung off an exchange like MISCCIP or ASCIP once you have critical
mass. We have reached this point in the automotive industry, so the

                                                                                                                   AN ITWEB INFORMATICA PUBLICATION     179

				
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posted:3/29/2011
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