Enabling the Auto Industry: A Covisint Interview
Q: Everyone is talking about Covisint. What precipitated all of this attention?
A: Covisint is an exciting new enabler for the automotive industry. In a nutshell,
Covisint is an Internet-based system that provides a platform for collaborative
e
-commerce.
It facilitates efficient business transactions between members of the exchange.
Covisint expedites product development between organizations, and it enables
organizations to move a variety of processes forward faster, without the need
for constant travel, face-to-face meetings, and all the time and expense that
goes along with that.
Q: Who created Covisint?
A: First, General Motors, Ford, and Daimler-Chrysler announced their intention to create a common, Internet-based platform for this collaborative procurement project. Subsequent to that announcement, Renault and Nissan joined. So those five OEMs - or auto manufacturers - plus Oracle and Commerce One, formed the nucleus of Covisint.
These organizations have an ownership stake and have fully capitalized Covisint. But Covisint's relationship to them goes beyond that. They are customers of Covisint, as well. When Covisint launches an IPO, (which could occur in 2001, if market conditions support it), the organizations will become both customers and Covisint shareholders.
Q: How will suppliers who work with auto manufacturers be involved in the system?
A: They too will become customers of Covisint. Covisint has product offerings in procurement, in Supply Chain Management, and in collaborative workspace. Covisint will enable its customers to conduct business between themselves and the OEMs, among themselves, and/or among their respective supply chain.
So let me explain it like this. In the pre-Covisint vision, the supply chain worked in a linear fashion. For example, an auto manufacturer may decide to change the volume of production of a vehicle by say a thousand units. That information would get transferred to tier one, from tier one to tier two, from tier two to tier three, and so on. It might take days or weeks for all of the information to reach the end of the supply chain. Organizations at the end of the chain never really know exactly what might be needed. If they supply a number of key components to a customer, they still never really know from day-to-day or week-to-week how much of each component they will need. They need to keep a supply on hand - an inventory - so they can respond relatively quickly. But of course, keeping inventory around means tying up capital.
With Covisint, when the OEM wants to make a change to raise additional units, the information does not have to go linearly through the supply chain. It can be broadcast to all members of the supply chain simultaneously - people can see it at the same time, and use it depending on the need. With Covisint, the link at the end of the supply chain knows immediately what is happening and can better manage its response. Perhaps they won't have to commit so much capital to inventory. That alone should deliver significant savings as a result.
Q: Will additional technologies be added into the Covisint package in the future?
A: Definitely. As we move forward, you'll see a variety of additional capabilities. Capabilities in logistics, additional capabilities in Supply Chain Management, and a host of other capabilities that aren't yet fully articulated. Our focus is, of course, to bring value to Covisint's customer base, which is the automotive industry at large on a global basis.
It's important to remember that Covisint was not the creation of a group of technology companies who had developed great technology and then tried to apply it to an unknown need, guessing at what the industry might require. Covisint is the creation of a combination of people with vast experience in the automotive industry in developing solutions that apply directly to the needs of the industry - in concert with technologists who are recognized leaders in their space. That combination is a pretty potent force. The offering with which Covisint comes to market is very robust and clearly defined. It directly addresses the needs of this 100-year-old industry. Covisint is the most effective new tool for addressing issues that are there to help bring more value, more efficiency, and more speed to the industry.
Q: Please talk a little about the Virtual Product Workspace.
A: Virtual Project Workspace (VPW) is a collaborative work environment. With VPW, you can bring together via the Internet people from the same company. Through the VPW all of these individuals can work together, in real time, in this virtual environment on the computer. They can make changes, make design adjustments, mark up the imagery, have a virtual meeting, communicate by voice, and compare two-dimensional or three-dimensional drawings.
