Supply Chain Integration

Throughout most of the 20th century, competitive advantage was defined by the production and labor capabilities of individual original equipment manufacturers (OEMs). In the mid 90s, OEMs sought to reduce those costs by distributing those capabilities across a global supply chain. Competitive advantage is now by the combined capabilities of the suppliers that make up the OEMs’ supply chain.  Therefore, the only way to improve competitive advantage is to improve those combined capabilities through better integration – that is information exchange across the supply chain.  The challenge for this program is to develop and demonstrate an open, standards-based, testing and integration infrastructure that enables the automated exchange of information across the supply chain.  This infrastructure will provide the foundation for new types of collaboration and management and it will help propel both OEMs and SMEs to a better competitive position in the global marketplace.

A number of recent economic studies initiated by NIST concluded that this type of infrastructure is a public good that will enhance a number of social goals and support integration across the entire supply chain. This integration will, in turn, increase both productivity and innovation. Since every supplier can benefit from such an infrastructure, no individual supplier or OEM will commit the substantial resources necessary for its development and deployment.  In addition, historically, the private sector has not invested heavily in such work because of (1) the difficulty assessing its potential costs and benefits and (2) the high technical risk and market uncertainty.

This program has been collaborating with two manufacturing standards development organizations to improve the creation and validation of supply chain interface specification standards: UN/CEFACT and OAGIS.  UN/CEFACT published a number of E-Commerce related standards. OAGIS published a collection of standards used by both the aerospace and automotive industries. Each has also published a set of guidelines, called naming and design (NDR) rules, which govern both the creation and use of these standards. These guidelines were originally published in English text, which made testing very difficult.  In FY06, OAGIS, and UN/CEFACT asked us to develop a strategy for verifying that the standards conformed to these guidelines. In FY07, we (1) completed a project to convert the English text into a computer interpretable form and (2) began the development of a set of tools that test the standards against these new computational forms.  In this program, we will complete the development of those tools and complete the testing of both UN/CEFACT and OAGIS standards.  We will also make the tools available to other standards developers.

Rigid supply chain structures are giving way to virtual supply networks of collaborative partnerships.  These partnerships will develop rapidly in response to market opportunities; and, they will disband just as quickly when those opportunities disappear.  A critical requirement for forming these virtual networks is supplier discovery. That is, the ability for OEMs to find suppliers who have the capabilities to meet their design and production requirements. Initial discussion with the Doyle Center and Picatinny Arsenal indicate a need for an integration infrastructure that facilitates internet-based discovery of suppliers.  Such an infrastructure will include standard models for representing design requirements and production capabilities, tools that enable OEMs and suppliers to register those requirements and capabilities, and, methods and tools that allow designers to find potential suppliers whose capabilities match their requirements automatically.

Once potential supply chain partners have been identified, it will be necessary to determine if they can produce the required number of products in a timely fashion to meet customer demand. To facilitate this capability, this project will develop a simulation integration infrastructure using Web services technology.  Web services technology promises to provide better solutions for integrating simulations than the currently used technology, the High Level Architecture (HLA).  They will enable companies to develop models independently using different simulation tools, share data between distributed executables running in remote locations, and address security concerns such as protection of proprietary data.  This integration infrastructure will allow supply chain partners to connect simulations of their facilities over the Internet to verify production requirements and capacities.  To address production requirements, simulations will include technical solutions for creating manufacturing supply-chain models at multiple levels including supply-chain, enterprise, plant, and shop-floor levels. Web-based technologies will enable the integration of models at these different levels.

AIAG’s (Automotive Industry Action Group) Material Off-Shore Sourcing (MOSS) project is an initiative designed to improve the business processes and information exchanges that drive the intercontinental shipment of goods.  AIAG has concluded that standards for the electronic exchange of information will (1) improve both the accuracy of the information and agreement on its interpretation, and (2) result in tangible reductions in both the average and standard deviation of transit times. A direct economic benefit will be reductions in buffer-stock inventory and premium transportation costs.  In FY07, AIAG asked NIST to (1) define necessary information objects, propose standards for those objects, select associated EDI (electronic data interchange) messages, develop an integration infrastructure to exchange those messages, and conduct implementation demonstrations using selected business process scenarios.  This first such demonstration, which showed conformance of a few vendor products to the proposed standards, was conducted in early FY08.  The second demonstration focuses on interoperability. It will show that vendors can successfully exchange messages among themselves according to the business process.  The interoperability demonstration will use a simulation of the business process and logistics plan as a basis for determine which exchange messages will be sent and the ender/receiver of those messages.

Click here fo more details