UK's Leyland Trucks Delivers on Global Web Strategy
A version of this article first appeared in Computers & Finance, a magazine published 10 times a year in London by TBC Research. Through its comprehensive portfolio of magazines, events and research, TBC Research is dedicated to helping senior business professionals make more informed technology decisions.
The motor industry in Britain has been littered with recent casualties. But Leyland Trucks, by using the Web and its Truckxchange marketplace as a 24-hour global manufacturing and support operation, is emerging from the wreckage at the forefront of e-commerce.
Prior to 1998, the UK's largest truck maker and exporter admits its IT focus was on business survival, but after being acquired by Paccar in 1998 it has developed a strong IT strategy which it claims will see it spend $100 million a year on technology. However, to fully integrate an acquisitive global company with many different systems is not an easy task, and Paccar knows that many moons will pass before it will fully achieve its goal.
"We intend to Web-enable the company in a variety of ways," said Patrick Flynn, vice-president and chief information officer. "We want to have fewer manual processes and we want to give all relevant users access to the Internet."
Making the Move to XML
Currently, 90 percent of Paccar's transactions are on EDI (electronic data interchange), said Flynn. "We want to use XML (eXtensible markup language) instead and take financial applications online, giving our customers the opportunity to do likewise. This means we must try to wrap XML around the company's data, which we know is a big task but one that is critical for the future."
The strategy will require all new package applications across the board to be XML-enabled and to this end the company is standardising on Microsoft technologies. Paccar has adopted Windows DNA as a standard and is developing expertise in BizTalk, Microsoft's framework for implementing XML. Meanwhile, it is looking at integrating its various ERP (enterprise resource planning) systems via XML across the world including Baan, JD Edwards and Oracle.
Paccar is currently running pilot projects using XML to create browser-based portals to information, but Flynn estimates that these projects, which will include real-time interactive links, will take three to five years to complete for each part of the business. Until these projects are proven, the links with suppliers and dealers via EDI and proprietary batch information exchanges will continue.
The company's other move towards the Internet is its marketplace, Truckxchange.com, currently in beta testing and due to go live in September 2000. Initially the exchange, powered by Commerce One, will provide purchasing tools and services to improve efficiency and reduce costs to customers, dealers, suppliers and vehicle manufacturers. It will eventually add collaborative engineering, supply chain planning and execution tools, and will also act as an entertainment channel for the commercial vehicle industry as it looks into providing news, sports, weather and chat.
Truckxchange and the XML thrust form a two-pronged advance into e-commerce under the banners of ePaccar and Paccar.com. ePaccar forms a global strategy group which provides coordination and guidance on all the company's e-commerce strategies to make them consistent. It will coordinate all Web projects and build extranet links to dealers, suppliers and customers.
Paccar.com is a venture capital firm that has already invested $20 million this year in start-up companies. But like any investment firm, it still needs solid back-office systems. In the UK Leyland Trucks has recently gone live on Oracle in a £5 million project which involves everything from accounting to production scheduling to supply chain management. The project took a total of five years from signing up with Oracle in 1995 to closing down all legacy systems.
Brian Metcalfe, systems manager at Leyland Trucks, said, "With our legacy systems we had problems with connectivity due to the complexity of interfaces but we now have an integrated business and we must integrate with our supply chain via Web technology in the next few years. We now have a single system with a very rich database so we can have more informed decision-making."
At the start of the project Leyland Trucks had a very clear idea of what its business processes were and laid this definition alongside the offerings of various vendors. Oracle was chosen as the closest and most flexible fit. Metcalfe said: "We don't want to be driven by an ERP system, it must conform to us."
Metcalfe said: "In 1995 we were on the cobbled streets of the information highway. Within five years we have moved to automotive best practice."