Auto Consortium Aims For Lower-Cost Data Messaging

Covisint LLC, the online exchange for the auto industry, and a consortium of the largest automakers and their suppliers are developing a data-messaging system based on XML and other standards that Covisint says will be a cheaper alternative to costly EDI systems.

The project was unveiled Monday, although Covisint executives say development work has been under way since early this year. Covisint expects to pilot-test the new trading hub this summer, and the six companies assisting with the project are scheduled to begin using it for high-volume messaging in November. The system will be expanded to second- and third-tier suppliers next year, says Bob Paul, Covisint's sales and marketing executive VP.

DaimlerChrysler, Delphi, Ford, General Motors, Johnson Controls, and Lear are contributing personnel and an undisclosed amount of money to the effort.

The project represents a move by Covisint to expand beyond what until now has been its primary focus--building applications such as online catalog software and electronic auction tools for the auto industry.

The system will let Covisint customers send and receive electronic data to applications behind each other's firewalls. In addition to offering a more cost-effective alternative to EDI for auto manufacturers and their major suppliers, the system will provide a way for smaller companies farther down the supply chain that can't afford EDI to communicate with customers and suppliers, Paul says.

Beyond handling transactions, Paul says, the system will be capable of sophisticated business-process applications such as notifying manufacturers about component quality problems two or three levels down the supply chain and communicating warranty data between manufacturers and suppliers.