XML-Based Format Shows Promise for High-Tech Hubs

Is it possible, in the space of an Internet minute, to design, order and manufacture products from an increasingly far-flung network of plants, suppliers and contract manufacturers? Supply chain vendors say this is all possible. But in most cases efforts to integrate supply chains are hampered by incompatible systems, by an array of paper-based communications protocols such as faxes and e-mails, or by Web pages not dynamically linked to the source of the product content.

Now, one vendor claims to have a solution that integrates information into any system in a supply chain, and it all runs off a Windows NT server. Agile Anywhere from Agile Software Corp. (www.agilesoft.com), is being implemented within the high-tech and electronics industry, a segment noted for dizzying product innovation and change. The key to the approach is implementation of an XML-based document format, which has the potential to enable participants from a select industry group to communicate with each other.

Agile Anywhere provides an XML-based network of linking applications for various brands of supply chain software. The server component of Agile Anywhere, Agile eHub, can run on top of Oracle8 or SQL Server 7.0. The core application delivers information via product definition exchange (PDX) documents, a format that is comparable in functionality to PDF, the popular document format supported by Adobe Systems (www.adobe.com). PDX is supported by, or under development at, a number of organizations in the electronics industry, including RosettaNet, Compaq Computer Corp., Lucent Technologies and Solectron.

PDX-formatted documents are targeted at occasional supply chain partners, says Joe Fazio, vice president of marketing at Agile. Instead of enabling partners to come into a system, product information can be published and delivered via e-mail, he explains. "Companies can create a PDX file with assembly information for partners." Partners can then view the PDX documents through a viewer called Agile Express, available as a free download from the Agile Website -- again, similar to the availability of Adobe Acrobat viewers for PDF files.

The similarities to Adobe's PDF format end there.

"Unlike PDF, which is a flat static file, partners can go through PDX files, traverse a bill of materials, run reports on the data, extract information out of the file and export the data to other systems -- such as SAP, JDEdwards and PeopleSoft" Fazio says. "It's real live information, based on XML." For example, an online registration form could be presented as a PDX file, on which data can be entered and transferred back to a hub company.

More established trading partners can access Agile Anywhere at the hub site through a personalized Web portal branded "My Agile," Fazio says. They can obtain information through the portal, as well as "participate within the processes, like the engineering change order process or the deviation process."

Agile's implementation of the PDX format is "potentially quite important, particularly in the industries they focus on," says David Yockelson, an analyst at Meta Group (www.metagroup.com). "Everyone's excited about XML and its ability to act as a neutral format language for advanced supply chain collaboration, such as engineering changes to RFPs. The problem is that up until now there has been an absence of industry standards for implementing in XML. PDX represents a collective standard."

But Yockelson warns against the "XML Nino effect," in which everybody attributes everything positive that will happen to XML. While XML is a standard that can get industries to work together better, XML "is not going to be effective until you're not having to do everything on a peer-to-peer basis or at a semantic sort of level." While PDX has a promising future, it isn't necessarily a good fit for every industry, says Yockelson. "You could certainly have an XML-based standard like PDX in other industries. But not every vertical market has a similar bill of materials structure."

To date, Agile's efforts have focused on electronic and medical device manufacturers -- industries with high rates of change and intense competition, where substantial rewards go to the first company to get a technology to market. "Outsourcing of manufacturing is how everyone does business in the electronics industry," Fazio says. "When you're dealing with partners all over the world, it's even more problematic to get something into manufacturing, and once it's in manufacturing, to be able to change it very quickly."

The need to rapidly exchange information between far-flung partners was the challenge for Flextronics Int’l (www.flextronics.com), a $2 billion global electronics manufacturing services provider. This industry faces increasing rates of new product introduction, shortening life cycles and rapid product and component obsolescence, says Bob Dykes, CFO and senior vice president of finance at Flextronics. "All of these factors are causing our customers, the OEM companies such as Cisco and Ericsson and Philips, to look completely differently at the way they manufacture their products and the way they manage their supply chain," Dykes says.

"Their major thrust has been to outsource their electronics manufacturing to companies like Flextronics," Dykes says. In turn, Flextronics has to be able to change production lines in a moment's notice.

As an example of services Flextronics provides customers, Dykes points to a dramatic simplification of the product shipping process. Several steps were taken out of the process from sales, accounting and manufacturing, he says. Agile Anywhere was employed at the back end of the process to reduce the time from final design out to the market. This is facilitated by rapid turnaround of engineering change orders, immediate notification of design changes and uniform implementation across factories.