Technology for open international trade electronic trade scenarios
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Erasmus University P.O. Box 1738 3000 DR Rotterdam, The Netherlands tel. 31 (10) 408 26 01 fax 31 (10) 453 13 21 www.euridis.fbk.eur. Ronald M. Lee [email protected] EURIDIS Erasmus University Research Institute for Decision and Information Systems.

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Technology for Open International Trade Electronic Trade Scenarios

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Technology for open international trade electronic trade scenarios

Erasmus University

P.O. Box 1738

3000 DR Rotterdam, The Netherlands

tel. 31 (10) 408 26 01

fax 31 (10) 453 13 21

www.euridis.fbk.eur

Ronald M. Lee

[email protected]

EURIDIS

Erasmus University Research Institute

for Decision and Information Systems

Technology forOpen International TradeElectronic Trade Scenarios


Outline

Motivation

Vision

Scenario Representation

Scenario Design Tool: InterProcs

Example Scenario

Component Architecture

Future Directions

Outline


Motivation

Globalization of Markets

*New Opportunities

*New Threats

Swimming in unfamiliar waters

Motivation


Obstacles

*Red Tape Problem

"red tape -- n; (so-called from the red tape formerly used to tie up legal documents in England): bureaucratic procedure, especially as characterized by mechanical adherence to regulations, needless duplication of records, and the compilation of an excessive amount of extraneous information resulting in prolonged delay or inaction"

*Babel Problem

An estimated 33% of business opportunities

lost due to language problems

(European Union)

Obstacles


Technology for open international trade electronic trade scenarios

Example transaction: seaport

[bill_lading]

Issuing

Bank

Corresponding

Bank

[lc]

[bill_lading]

[bill_lading]

Import

Customs

Import

Port Authority

Export

Port Authority

Export

Customs

[lc_

[customs_

[manifest]

release]

[cargo_declare]

[remittance_

[manifest]

[lc_ request]

[exp_

[discharge_permit]

advice]

[customs_

[stowage_

approval]

declare]

[exp_

plan]

[eta]

[bill_

declare]

[manifest]

[commercial_

[bill_

lading]

[ship_

[bill_lading]

Invoice]

details]

lading]

Exporter

(Shipper)

[clearance]

[manifest]

Export

Shipping

Line

Export

Liner

Agent

Export

Forwarder

[manifest]

Importer

(Consignee)

Import

Forwarder

Import

Liner

Agent

Import

Shipping

Line

[ship_

[delivery_

[despatch_

[ship_

[eta]

order]

ins_act]

notice

[stowage_

request]

[arrival_

[arrival_

notify]

[manifest]

notify]

plan]

[ship_

instruct]

[bill_

lading]

[load_

[delivery_

[manifest]

[stowage_plan]

instruct]

[arrival_notify]

order]

[manifest]

[ins_contr_req]

[manifest]

[load_list]

[goods_

[pre_arrival]

[trans_

[trans_

available]

[ins_contract]

notify]

interest]

[manifest]

[stowage_plan]

[bill_lading]

[delivery_

Import

Transporter

Import

Stevedore

Export

Stevedore

Export

Transporter

Insurance

order]

import

export


Technology for open international trade electronic trade scenarios

Research Goal: Red Tape

to relieve the bureaucracy of international trade through advanced electronic commerce technology (and artificial intelligence)

*controls better

*yet, more transparent (automatic)

especially for small, medium size enterprises (SME's)


Technology for open international trade electronic trade scenarios

to provide native language interfaces to trade scenarios and associated electronic documents

*native alphabets (Cyrillic, Chinese)

*native writing styles (Arabic, Chinese)

Research Goal: Babel


Technology for open international trade electronic trade scenarios

our focus:

A2A

A2B

B2B

Context...

Adminisrations

Business

Consumers


Technology for open international trade electronic trade scenarios

further potential market:

small to medium size enterprises (SME's)

by enabling entry into international markets,

could potentially double or triple levels of international trade.

Market size ...

International trade per year (1995): $ 28,000,000,000,000

transaction costs: 7% = $ 1,960,000,000,000

UN estimates potential savings @ 25% =

$ 490,000,000,000

  • Compare to estimates for (consumer oriented) electronic commerce by year 2000:

  • $ 200,000,000,000

  • Thus, potential for ITT is more than twice the size

  • of currently envisioned electronic commerce.


Technology for open international trade electronic trade scenarios

Vision

Plug and Play

Electronic Trade Scenarios


Technology for open international trade electronic trade scenarios

need for trade procedures:

easy to install

trustworthy, having adequate controls

efficient, keep transaction costs minimal

applies:

international trading

locally, where procedures are complex and trade relations dynamic, e.g. within ports

Open Electronic Commerce

doing business over digital networks,

potentially among parties where

no prior trading relationship exists


Technology for open international trade electronic trade scenarios

the mutually agreed upon set of rules and procedures that governs the activities of each party involved in a kind of business transaction.

*electronic form

*generic, reusable

*downloadable, installable from central libraries

*flexible -- has parameters for adapting to specific situations

Electronic Trade Scenarios


Technology for open international trade electronic trade scenarios

business-to-business (& government)

especially, international trade transactions

use of artificial intelligence:

--pattern-matching (detect fraud potentials)

--goal-directed synthesis (of trade procedures)

--heuristic navigation (messenger model)

Our focus ...


Technology for open international trade electronic trade scenarios

UN/CEFACT

Centre for the Facilitation of Procedures and Practices for Administration, Commerce and Transport

"The worldwide facilitation of international transactions, through the simplification and harmonization of procedures and information flows"

* Business Analysis Working Group (BAWG)

* Codes Working Group (CDWG)

* EDIFACT Working Group (EWG)

* Legal Working Group (LWG)

* International Trade Procedures Working Group (ITPWG)

* Techniques and Methodologies Working Group (TMWG)

International Collaboration


Technology for open international trade electronic trade scenarios

Scenario

Design:

InterProcs


Technology for open international trade electronic trade scenarios

purpose: design and prototyping of distributed electronic trade scenarios

unique perspective: an artificial intelligence approach to electronic commerce

key advantage: symbolic reasoning, heuristic synthesis of trade rules, procedures

About InterProcs ...

  • main InterProcs representations:

  • documentary petri nets (DPN's)

  • audit daemons

  • procedure constraint grammars (PCG's)

  • regimes, messengers


Technology for open international trade electronic trade scenarios

Current developments

Now ...

Graphical design methodolgy & tools ...

* UML diagrams

* XML schema

* DPN design

Prototype execution ...

* Viewer mode

* Gaming mode

* Network mode

In progress...

AI extensions...

* Audit daemons

* Procedure constraint grammars

* Messenger model

Production implementation...

* component architectures

Wishful...


Technology for open international trade electronic trade scenarios

Design methodology

UseCase Diagram (UML)

Sequence Diagram (UML)

Activity Diagram (UML)

XML Schema (SOX)

Joint Procedure (DPN)

Role Procedures (DPN)


Technology for open international trade electronic trade scenarios

1.Viewer mode:

single user

view, simulate all roles together

executed as applet

2.Gaming mode:

multiple users

each sees, executes one role only

executed as applets

EDI documents sent via server

3.Network mode:

multiple users

each downloads role model as java application

EDI documents sent via Internet email (POP)

Modes of prototype execution


Technology for open international trade electronic trade scenarios

Use Case Diagram


Technology for open international trade electronic trade scenarios

Sequence Diagram


Technology for open international trade electronic trade scenarios

Activity Diagram


Technology for open international trade electronic trade scenarios

Joint Procedure


Technology for open international trade electronic trade scenarios

XML Schema

(Class Diagram)


Role procedures

Role Procedures


Multi lingual italian dutch

Multi-Lingual(Italian, Dutch)


Technology for open international trade electronic trade scenarios

Multi-lingual display of EDI docs


Technology for open international trade electronic trade scenarios

Consignee

Shipper

Carrier

Corres

Bank

Issue

Bank

Downloading

Of

Scenarios ...

Global

Scenario

Repository


Technology for open international trade electronic trade scenarios

Example Scenario

  • International

  • Documentary

  • Credits


Technology for open international trade electronic trade scenarios

Documentary Credit Operations

  • Payment for the goods is made: not on actual delivery of goods,

  • but on presentation of stipulated documents such as:

  • a commercial invoice

  • an insurance certificate

  • a certificate of origin

  • a transport document (e.g., a bill of lading or an airway bill)

  • The seller receives payment by presenting the stipulated documents to a bank (the advising bank) that the buyer has instructed to make payment.

  • Uniform Customs and Practices for Documentary Credits (ICC, 1983)


Technology for open international trade electronic trade scenarios

Principle of

"strict compliance"

Studies show that half of the documents presented to satisfy letters of credit contain discrepancies that delay -- even render void -- payment because the bank is not obligated to pay if the documents are unsatisfactory.


Technology for open international trade electronic trade scenarios

1. SalesContract

Consignee

(buyer)

Shipper (seller)

14. Shipping Docs

6. Shipping Docs

11.

Arrival

Notice

15. Release

Goods

5. Dispatch

Goods

2. Credit Application

4. Credit Notification

12. Payment

13. Shipping Docs

7. Shipping Docs

8. Payment

Carrier

3. Credit

9. Shipping Docs

Corresponding

Bank

10. Payment

Issuing Bank

Documentary Credit Overview


Component architectures

ComponentArchitectures


Technology for open international trade electronic trade scenarios

UPPER CASE:

InterProcs --

Design, Prototyping

lower case:

how to integrate trade scenarios

into local application systems?


Scenario distribution to parties

Scen 1: Role A

Regime: Role A

Scenario:

Transaction #1

Scen 1: Role B

Scen 1: Role A

Scen 2: Role A

Scen 2: Role A

Scenario:

Transaction #2

Scen N: Role A

Scen 2: Role C

...

Regime: Role B

Scen N: Role A

Scen 1: Role B

Scenario:

Transaction #N

Scen N: Role B

Scen N: Role B

Scen N: Role C

Scenario distribution to parties...


What else is needed

A. link to EDI document definitions

*e.g. XML/EDI Schemas

*e.g. formal languages for business communication (FLBC's)

B. link to internal systems

*e.g. database interfaces

*e.g. security

*e.g. concurrency control

*e.g. transaction management

*etc.

B.

A.

Role

Scenarios

Internal

Systems

XML/EDI

Documents

What else is needed?


Component architectures1

Goal: "write once, run anywhere"

"A component is a reusable software building block: a pre-built piece of encapsulated application code that can be combined with other components and with handwritten code to rapidly produce a custom application ...[thus] customized business solutions can be assembled from a set of off-the-shelf business objects"

Examples:

*Microsoft Transaction Server (MTS)

*JavaBeans

*Enterprise JavaBeans

from: Anne Tomas, "Enterprise JavaBeans -- Server Component Model for Java", by Patricia Seybold Group, www.psgroup.com, December, 1997.

Component architectures ...


How the pieces fit together

Inter-Business Component Architectures:

MTS

Enterprise Java Beans

  • Document Representations:

  • FLBC

  • XML/EDI Schemas

  • EDI

  • Scenario Representations:

  • DPN’s (InterProcs)

  • UML (UN/TMWG)

  • Open-EDI (ISO SC32)

  • Off-the-shelf Business

  • Applications (internal)

  • Baan

  • SAP

Custom-developed

Business Applications

(internal)

How the pieces fit together ...


Future directions

FutureDirections


Our primary deliverable

consisting of:

integrated transaction model

role procedures

processing rules

EDI documents

trade scenario models

delivered as an working prototype

operating on the Internet/Web

our primary deliverable:


This could be really big

enabling international,

business-to-business commerce,

among small/medium size enterprises

as easily as domestic trade

making red tape transparent

this could be really big ...


Technology for open international trade electronic trade scenarios

Appendix:

Scenario

Representation:

Documentary

Petri Nets


Technology for open international trade electronic trade scenarios

different node types =

agency of choice

(endogenous, exogenous)

Graphical Representations:

Abstract:

State Transition Diagrams

Applied:

DecisionTrees

nodes = states

arcs = transitions


Technology for open international trade electronic trade scenarios

arcs = activities, tasks (sub-states)

nodes = transitions

total state of system = set of active tasks

Graphical Representations:

Abstract:

Marked Graphs

Applied:

PERT Diagrams

install

bath

do

plumbing

do

electrical

finish

walls


Technology for open international trade electronic trade scenarios

Combines:

choice, contingency (STN)

concurrency (marked graph)

Graphical Representations:

Abstract: Petri Nets

circle nodes = places (sub-states)

bar nodes = transitions

tokens = mark active places


Technology for open international trade electronic trade scenarios

circles = control nodes

boxes = document nodes

cube = physical goods

bar = action

triangle = decision node

Graphical

Representations:

from Buyer:

purchase_order

Seller:

decide_accept

Applied:

Documentary

Petri Nets

{accept_order}

{reject_order}

null

Seller:

deliver_goods

Seller:

send_invoice

to Buyer:

[goods]

to Buyer:

[invoice]


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