EDIWheel Seminar Paves The Way for E-Business Protocol

In December, around 70 members from the tyre industry gathered together at Coventry to attend a seminar, organised by the TIF. The seminar had only one subject – EDIWheel, or Electronic Data Interchange Wheel.

The 70 delegates represented a true cross-section of the industry and, in his introduction, David White of Kwik-Fit, said that 21 per cent of the audience were from the e-commerce sector, 20 per cent were wholesalers, 37 per cent manufacturers, 10 per cent from trade associations and 14 per cent were tyre dealers.

The aim of the seminar, continued White, was to learn about and understand EDIWheel, so what is it? MAM Software describe it as “a commonly agreed e-business protocol, developed by the major tyre manufacturers to communicate on a business to business basis with their trade customers.”

It is not a new idea, having been active in parts of Western Europe for some years and involving most tyre manufacturers and 10,000 tyre dealers. Developed specifically for the tyre industry, EDIWheel provides a framework for sustainable growth and profitability by streamlining core business processes, such as ordering and invoicing. Instead of having to access a number of different manufacturers’ websites, EDIWheel would mean one single protocol for all participating companies.

The fact that the idea is already up and running would be an advantage if EDIWheel were to be adopted in the UK, said TIF’s Graham Willson, as we could learn from previous mistakes, if any.

EDICeti

The EDIWheel programme in mainland Europe is overseen by an organisation called EDICeti and Graham Willson introduced the first of three speakers from the EDICeti committee; Frank Plock, from Goodyear-Dunlop.

EDIWheel, he said, was “a proven, pragmatic solution” to the smooth running of the tyre industry, making it easier for tyre dealers to better serve their customers. By having a common protocol, the tyre dealer can see at a glance the price and availability of a number of different products from various suppliers. He can interrogate suppliers and receive an answer in real time and EDIWheel supports all aspects of the transaction, from initial quotes, to written orders, delivery notes, invoices and even payment – all carried out electronically. The benefits, said Plock, include a more streamlined and faster ordering process, less work, better productivity with a reduced chance of errors caused by multiple entries of the same data and wider access to suppliers.

He gave way to the second speaker from EDICeti; Alice Aguemon, of Continental. EDIWheel, she told the delegates, is accepted in more than 10 countries, mainly in Western Europe at present, but there is no reason why it could not be adopted globally. As an example of how it has caught on, she said, in 2008 eight million tyres were ordered through EDIWheel messages in Germany alone. The market share was 10 per cent and has now risen to 70 per cent.

The beauty of EDIWheel is that it is flexible and can be adapted to incorporate changing requirements – for example, inventory management. As yet, EDICeti have received no requests for this, but it would be possible to add it, said Aguemon.

Speaker number three from EDICeti was Roland Bories, from Michelin, who gave a theoretical scenario showing how EDIWheel could benefit tyre dealers. Keeping up to date with the various product catalogues from different suppliers can be a time consuming business, involving visiting different websites. With EDIWheel, this information is supplied by manufacturers and can be accessed by the dealer using a single protocol. He can enquire if the product is available, how much it costs and when it will be delivered.

All this information is available in seconds and, when happy, the dealer can place the order and receive a confirmation. When the goods arrive, an electronic delivery note is raised and an invoice can be sent electronically. The cost of this to the dealer is zero – the manufacturers pay a fee, based on their market share.

Software providers

Another attraction for the tyre dealer is that he does not have to buy into a new software system; he can utilise his existing software system to access online ordering etc. Neither is there one single software company driving the idea of EDIWheel – at the seminar, both CAM Systems and MAM Software gave presentations showing how EDIWheel would work.

Both companies are very much pro-EDIWheel – indeed, MAM has developed an EDIWheel module in conjunction with Michelin and Formula 1 Autocentres, enabling the retailer to check real-time stock and place orders with Michelin, from within Formula 1’s own MAM Autopart management software. The scheme was piloted at the end of 2009.

CAM believes that EDIWheel is very much the coming thing and cited the example of the banking and construction industries, which have embraced the benefits of co-operation and the standardisation of IT platforms across all functions, while the constituent companies continue to compete on price, product and service. In the construction industry, in 2003 there were three founding participants and by 2009, this number had risen to 1,200, with an annual trading value of £2 billion.

These presentations were the final ones of the morning and Graham Willson summed up the morning’s events by saying that EDIWheel is all about having standardised messages which he believed makes sense for the industry and makes it simpler for the various parties to interact.

Industry perspectives

The afternoon session was devoted to short presentations from representatives from all sectors of the tyre industry and to questions and answers. Introducing the session and wearing his Kwik-Fit hat, David White suggested that a common platform route is something that cannot be ignored and that the industry should work together to provide a solution.

Speaking for retailers, Dene Arnold, of Merityre, made the point that his accounts department processes 35,000 documents a year, which involves considerable duplication and scope for errors. The benefits of a single protocol were obvious. The question was raised whether EDIWheel would only be of benefit to large, multi-depot companies? TIF said that, while these organisations would benefit from economies of scale, EDIWheel would benefit everyone, to a greater or lesser degree.

Ashley Croft put forward the wholesaler’s point of view, saying that the functions available from EDIWheel have been on offer from most large wholesalers for 15 years or so, and as such he supported the idea of a single protocol. However, he had reservations that a retailer would be able to instantly compare prices from a number of manufacturers and wholesalers on a single screen and that price would therefore be the sole differentiator. Factors such as service and customer support could not be included and the danger, as he saw it, was that prices could be driven further downwards.

The reaction was that EDIWheel is not, nor was it intended to be, a “compare the prices” website. The manufacturer’s viewpoint was put by Derek McMartin, of Maxxis, who said that the retailer stood to gain the most, but all sectors would benefit from fewer errors, greater efficiency and, ultimately, from lower costs.

The way ahead

The manufacturers in the UK are very keen that EDIWheel, or some sort of single protocol, is adopted sooner rather than later and the seminar did a good job of explaining what EDIWheel is and the potential benefits.

Something that proved of more than passing interest to tyre dealers was the possibility that EDIWheel could be used to simplify the forthcoming tyre labelling requirements. In 2012, tyre retailers will have to supply printed information with tyres, informing consumers about wet grip, noise and fuel efficiency. This could mean that the trade will have to stock and supply a different leaflet for every tyre in stock, causing much inconvenience, extra work and scope for error. However, it was suggested that, with EDIWheel, the information (supplied by the manufacturers) could be automatically printed on the customer’s invoice, with no effort on the part of the retailer. At the moment, this doesn’t happen, but according to EDICeti, there is no practical reason why this information could not be included, if desired, underlining the earlier point about EDIWheel’s flexibility and adaptability.

The tyre industry has not always been quick to embrace change and adopt new systems and, before the seminar began, there was considerable confusion about what exactly EDIWheel was and who would benefit from its adoption. David White summed up the day as “stimulating”, saying he was encouraged by the size and quality of the turnout and the interest expressed by many of the audience. Certainly the delegates ended the day better informed and the feeling among many was that the introduction of EDIWheel had moved that bit nearer for the UK tyre industry.