Can XML succeed where EDI has failed?

CIO |  Development

Chemical companies have long searched for a way to automate the procurement of production goods. Twenty years ago, many pinned their hopes on electronic data interchange (EDI), which had been used successfully in the automotive industry, but that effort failed to catch on in the chemical industry for lack of standards. Along came the Internet. At the end of the '90s, companies such as Ethyl began to build Web-based connections to many of their best customers. Using these private, company-to-company connections, the partners could obtain order information, submit orders, and find information on product descriptions and shipping details. The problem was, each connection took months and hundreds of thousands of dollars to build. There was no way companies could afford to create a one-to-one connection for each of their suppliers. Bob Mooney, then chief financial officer at Ethyl in Richmond, Va., an $843.7 million maker of petroleum additives, remembers thinking that a better way to go would be to create a central platform -- an electronic clearinghouse or hub -- that would link chemical companies' back-end systems with those of all their suppliers. The hub would translate business documents such as a purchase order from a company's ERP system into standard XML data and send it to the partner, where it would be translated into the format preferred by the partner's ERP system. Having a centralized electronic hub would eliminate the need for companies to forge individual connections to every trading partner, in theory saving loads of time and money.

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