The Austrian automotive supplier and the global supply chains

EDITEL launches an initiative to connect the Austrian automotive supplier industry to global supply chains

According to the “Working Group Automotive Supplier Industry”, approximately 900 Austrian companies work directly in the automobile supplier industry. While the use of Electronic Data Interchange (EDI) is standard practice among large suppliers to automotive corporations (OEMs), some subcontractors have yet to embrace this technology. Gerd Marlovits, the CEO of the EDI service provider EDITEL, is convinced of the technology’s potential: “There will be no way around EDI anymore because every supply chain interruption will make another case for EDI,” he said. As the technical partner of numerous automotive businesses, EDITEL is now launching an awareness-raising campaign.

“Overall, more than 20,000 companies from a wide range of industries are already connected to our data hub eXite. We have recently seen an important increase in demand from the automotive industry. In times of supply chain problems, automotive suppliers increasingly want to digitalize their supply chain processes”, said Gerd Marlovits, CEO of EDITEL. One reason for this is that this issue is becoming more and more relevant among OEMs and the other is that EDI increases data quality, planning security, and cost efficiency along the supply chain for all involved partners. EDI allows for the electronic exchange of business documents such as delivery forecasts, advance shipping notices, despatch advices, merchandise receipt notifications, and orders.

“Our automotive business has seen strong growth. Given the high demand, this area is a priority for us,” Mr. Marlovits explained. As an international EDI service provider, EDITEL has more than 40 years’ experience working with renowned corporations in the automotive sector (Toyota, Skoda, Panasonic, Alpine, etc.). “In Austria, where many successful manufacturing companies in the automotive sector exist, we are also seeing increasing demand for professional digital solutions,” Gerd Marlovits elaborated.

There is no way around EDI

Given its precisely timed production steps, the automotive industry has particularly high demands regarding data quality, which is a driver for constant innovation. “For all companies that have a direct business relationship with an OEM, EDI has been an essential part of their everyday work,” Mr. Marlovits explained. “And this tendency is gradually reaching pre-suppliers, the so-called tiers,” said the expert.

Austrian automotive suppliers are important players on the market

As the data provided by “Working Group Automotive Supplier Industry” reveals, 74% of Austrian automotive suppliers are tier-2 suppliers that deliver to tier-1 suppliers. By contrast, 61 percent of suppliers (also) deliver directly to large OEMs, which makes them tier-1 suppliers. Tier-1 businesses tend to be module and system suppliers, while tier-2 suppliers are usually component manufacturers. Depending on the model, up to 30,000 components are needed to manufacture a car, which is why it is not surprising that countless suppliers and subcontractors are involved. In addition, to ensure security of supply, components are oftentimes purchased from different suppliers and from different countries.

Several connection options available

EDI is also an important factor for success regarding just-in-time production where the exact quantities of parts and components are delivered as needed. The same is true for just-in-sequence production where the production sequence is scheduled to the minute with all suppliers. “The ideal way for connecting to procurement logistics is EDI integration into the ERP system (Enterprise Resource Planning). “Small businesses have the option of using web-based portals that meet all the basic needs of involved business partners,” explained Gerd Marlovits. During a free webinar scheduled for 7 April 2022, EDITEL experts will explain the opportunities of EDI with a focus on the requirements of large players in the automotive industry.

As in previous years, EDITEL will have a strong presence at “Odette 2022” in Prague. The international conference for the automotive supply chain industry will take place from 23 to 24 May 2022 at the Cubex Centrum in Prague. It will once again attract numerous industry experts from Austria. The Czech automotive industry is one of the largest in Central and Eastern Europe and also receives supplies from Austrian automotive component and parts manufacturers. One example is the world’s largest carmaker, Toyota, which has a large production facility in the Czech Republic, operated by its subsidiary Toyota Motor Manufacturing (TMM). TMM is a long-standing client of EDITEL, an international EDI service provider headquartered in Vienna.