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Every week, twice a week, in an unassuming conference room in an office building in suburban Detroit, representatives from rival companies-Ford, GM and DaimlerChrysler-meet to collaborate on a project that is revolutionizing their industry. It's called the Automotive Network eXchange (ANX), and it is a virtual private network that joins suppliers and buyers up and down the supply chain, and allows users to share CAD/CAM drawings, trade e-mail messages, process EDI, post shipping schedules and one day even participate in desktop videoconferencing. Necessarily, it opens communications as much, and as little, as its members want.

One Automotive Industry Action Group study speculates that ironing out such inefficiencies up and down the supply chain will decrease the cost of producing a car as much as $1,200. Another predicted cost savings, and one that ANX spokespeople feel more comfortable asserting, claims that industry-wide telecommunications charges will be slashed by $1 billion per year, an amount that translates to $71 per vehicle.

ANX, which is still being rolled out, has nearly 100 suppliers, but its creators predict that within a few years it will evolve into a global network, joining tens of thousands of businesses in a great colony whose destiny is to make cars better, faster and cheaper. And it now appears that the auto industry may be just the beginning for ANX. Health-care organisations, steel companies and appliance makers have been admiring the security, standards and price of the ANX system, and they are now wondering if it would serve them as well as it promises to serve automakers.

Not surprisingly, the idea for ANX, which is intended to help companies that compete with each other, didn't come from any one car maker. It came from the AIAG, an industry group, based in Southfield, Mich., whose mission includes using technology to increase efficiency. The seeds of ANX were first planted in 1994, following the work of an AIAG task force on CAD/CAM operations. At the time, each of the Big Three were planning to develop private, proprietary networks to communicate data with their suppliers. But that strategy was cumbersome and expensive, as suppliers like Milwaukee-based Johnson Controls , which does business with every major automaker in the United States and abroad, would have to connect with each automaker in individual private dial-up networks.

"Everyone was having to connect with everyone else's network," says Karl Schohl, ANX business manager with the AIAG. "It was as if each automaker was creating its own telephone system for data transmission. That seemed absolutely silly." The AIAG's CAD/CAM task force proposed using the Internet and TCP/IP to develop a single virtual private network that would be more flexible and cost less than proprietary networks. In their judgment, the Internet's strengths-universal accessibility and low cost-came with some serious weaknesses. TCP/IP routes data packets in small, easily manageable chunks, making connections with other networks easy, but it can also create data bottlenecks that slow performance and expose Internet communication to security risks. Savvy hackers can eavesdrop on Internet transmissions with relative ease. By contrast, EDI value-added networks (VANs) and private dial-up networks are largely immune to hacking.

In mid-1995 automakers working under the auspices of the AIAG set out to build a virtual private network that piggybacked the Internet. AIAG spokespeople won't say how much the project cost, but they say that each automaker footed its share of the multimillion-dollar project startup costs in 1997 and 1998 according to its per centage of market share in North America. In 1999 a self-funding model based on subscription bandwidth has been employed.

They also point out that ANX is not a typical VPN; instead of having one Internet service provider it has several, all competing for the business of its participants. That way, ISPs won't get complacent about pricing and service and will constantly seek to add new features. "I don't ever want to consider ANX complete," says Mark A. Jackson, senior manager of transportation systems and e-business solutions for DaimlerChrysler in Auburn Hills, Michigan. "If it's ever complete, it will probably be obsolete." As the AIAG mapped out its ANX design strategy, several key issues clamored for consideration. The first step was to select security technology for the network that worked in conjunction with existing application layer security mechanisms.

The task force chose IPSec, a standard for encryption and data authentication developed by the Internet Engineering Task Force.

Next, the project needed an overseer-an organisation that would manage key parts of the effort-namely certifying Internet service providers and signing up suppliers to use the network.

"Not every company we interviewed was interested in doing that," Schohl says.

"Some companies wanted to be consultants and get paid for everything they did." The ANX project team chose Bell Communications Research (Bellcore, which changed its name to Telcordia Technologies in March) to be the overseer.

Telcordia, based in Morristown, NJ, had a great deal of experience rolling out new technology across competing companies-the regional Bell operating companies.

Reliability was another major concern. When an automaker's assembly line shuts down, it costs about $1 million per hour. AIAG representatives and Telcordia spent several months hammering out quality metrics that each ISP would have to meet to become part of ANX. In addition to typical network performance metrics for downtime, throughput, packet loss and latency, service standards are in place to gauge ISPs' overall health, their disaster recovery plans and help desk response. ISPs must meet more than 120 service metrics in order to get certified by Telcordia.

"Today ANX is a wide, well-paved highway," says Frank Khoshnoud, senior manager with Ernst & Young in Detroit. "But it's only going to help if you have a vehicle and you load it with the right goods." And, Schohl points out, if it delivers the right packages to the right places. While any two members of the ANX network can agree to connect with each other, most members connect with a select few other members. In fact, much of the information that passes through the network must be protected from the eyes of other members.

"The network can be used for any application," says Schohl. "But different companies run their own applications." In some cases, says Schohl, the same monitor may be used on one shift to design for Chevrolet and on the next shift to design for Ford. In cases like that, says Schohl, each automaker must know that critical information is seen only by those authorized to see it.

Among the applications in the works are those that share warranty information, parts replacement and CAD/CAM file management with suppliers independently.

Automakers also want to use ANX to keep track of who has the most up-to-date version of a design and who is qualified to make changes to it. In addition, the automakers and major suppliers are considering developing portals to their ANX sites so that trading partners can find applications easily.

The AIAG plans to begin extending the network this year to trade groups in Europe and later to Australia, Japan and South America. The network has just completed a five-month pilot in Germany, where Volkswagen, BMW and other car makers put it to work.

When Schohl imagines the future of car making, he no longer sees thousands of factories producing parts or materials. He sees one networked system, a complex organism whose veins speed information around the globe in milliseconds so that no one ever has to stay late to wait for a package.

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More about Automotive Network eXchangeBell Communications ResearchBellcoreBMW Group AustraliaDaimlerChryslerErnst & YoungErnst & YoungEvolveInternet Engineering Task ForceJohnson ControlsService MetricsTelcordia TechnologiesTransportationVolkswagen Australia

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