XML stand for eXtensible Markup Language. It is a document formatting approach for creating structured data interchanges. What exactly does this mean? One of the difficulties of transferring data electronically between companies is that the format of most computer files is application-specific (for example, files for Microsoft Excel or Word, DataBases for Oracle, etc.) Other programs generally cannot read these files. If you want to send one of these files to your suppliers or customers, you need to make sure that they have the same application (software program) as you do or that they have one that can specifically read the kind of file you send them. Even if they have the same program, you may need to explain in detail what each of the pieces of data means. The process is usually time consuming and inefficient.
Businesses are becoming eBusinesses in order to be more efficient and responsive to their customers. Productivity improvement will be gained if they integrate their supply chains with their internal operations. This is referred to as "B2Bi" - Business to Business integration. The goal is for the purchasing people from one company to create a purchase order that is electronically transferred and processed by their suppliers, with an automatically generated order confirmation transmitted back.
For years companies have been looking for more economical ways to exchange such data. In the 1980's EDI (Electronic Data Interchange) was the hot topic. EDI was a difficult and expensive undertaking since for each transaction, it was necessary to coordinate the transmission/receipt of documents and then integrate the documents from different computers. The Internet has solved the problem of sending and receiving documents - e-mail and other systems have standardized the transfer. (Previously, it was necessary to either send media (diskettes, etc.) through the mail, or to make sure dedicated modems were configured to receive incoming data transmissions.)
The difficult step that remained was making sure applications at the various companies could read and interpret data from the other suppliers/vendors. This is where XML comes in. There are two parts to the XML approach that make it useful for this purpose. The first is what is called the "Document Type Descriptor", or "DTD". This is a document that a company or group of companies uses to describe the structure of a particular type of document. In the DTD, they can specify properties such as:
the name of a variable
what type of values it may have (text, number, etc.),
if it has any sub-elements or "children" associated with it (for example if the variable is the header for a group of elements)
the variable must have a value or if it is optional
With the DTD, the concept is that others are then able to obtain all the variables in the document.
The second part of XML is the document itself. The format of XML documents is similar to HTML. HTML is the document language that makes up web pages and can be read by web browsers on any type of computer. XML similarly can be read on any computer. HTML consists of pre-defined tags such as
which can be used to denote the title of a document, and can be interpreted by a browser. XML also consists of tags (descriptors enclosed in braces <>). For example an XML document for inventory may contain the following tags: <product_name>; <product_SKU>; <product_price>; <product_size>. The DTD may specify that <product_name> is a text field that is required, and must have other elements associated with it such as <product_SKU>.
<P>Expanding the concept, one can think about working with the supply chain, sending and receiving documents electronically without human intervention between ordering, inventory, manufacturing, service, and support. Ideally, this would work regardless if the organizations are within a single company or are external. For this to work properly, companies wanting to use XML for transactions will need to agree on the list of tags that will be used to transfer information within the supply chain. Then, they need to clearly define the source, role, and meaning of each of the variables.
<P>RosettaNet is one of the better-known industry consortiums that has created an XML standard for supply chain transactions. The group is an independent not-for-profit consortium of computer manufactures and suppliers. The key to this standard is that it specifies the meaning of each of the XML tags (variables). Without this meaning, the only benefit of XML is that multiple computers can display the information in each file. This is equivalent to being able to read a foreign language because it uses the same alphabet yours does - but not being able to understand what any of the words means. RosettaNet has developed what they call a Partner Interface Process (PIP) that is based on extensive modeling to determine how partners in the supply chain interact in their daily activities. From the models, they have created a list of variables that are meaningful for supply chain operations. The combination of a standard set of variables that are clearly defined and are meaningful to the specific operations with a document format based on XML make RosettaNet one of the few successful uses of XML.
<P>Without the second step for XML - agreement between companies as to the precise meaning of the variables in a document - this new standard is pretty useless. Many large companies are issuing their own XML standards, and advertising their initiatives as the solution for all their customers' problems. These initiatives should be looked at carefully (and skeptically). Competing companies are issuing their own standards (as to the contents of the XML documents) in order to control the marketplace rather than to facilitate communications.
<P>To summarize, XML is a way for people to store information electronically so that other companies can read those documents. The advance created by the XML approach is that the document format for each type of file is described by a separate document (a "DTD") that is to be published on the web. However, XML by itself has very limited usefulness. For XML to provide benefits, companies must agree with each other on the precise meanings of each component in an XML file. Several consortiums are working on developing data sets that are meaningful for specific types of transactions within their industries. Once these standards (on top of XML) are widely accepted and used, XML will be a useful tool to increase productivity.
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