SupplyOn, the Web-based exchange led by major German suppliers, wants to grow internationally and to cooperate with Covisint and the independent BMW and Volkswagen exchanges.
Munich-based SupplyOn remains deeply rooted in Germany. All its associate members are German suppliers. Behr and Siemens-VDO are the latest to join.
But progress toward a broader international platform is under way, says CEO Michael Klemm. An office in Paris is now open and recruitment is taking place for a similar office in North America, scheduled to open by the end of 2001.
Meanwhile, discussions with non-German suppliers are advanced. And changes to SupplyOn's ownership structure could be announced soon.
The exchange wants to attract new owners to the current founding group. One additional supplier has already decided to take a stake. For now, Bosch continues to have a 36 percent holding. Continental, ZF and INA have 18 percent each and SAP has 10 percent. The combined shareholding of the five founders has been targeted to fall to 55-65 percent by the end of this year.
Through its so-called OEM Cooperation Scheme, SupplyOn has been in talks with other OEM online initiatives. Klemm says SupplyOn needs to remain independent of such initiatives. But he also says that a clear set of guidelines is needed to enable interfaces.
'We really need to harmonize the communications infrastructure for the whole of the automotive community,' says Klemm. 'We see ourselves as a possible gateway for OEM initiatives into the supplier landscape.'
These discussions are now at a very advanced stage and details should be made public in late November or early December.
Klemm says SupplyOn now has an integrated suite of purchasing tools, including a business directory, request for information (RFI) functions, request for quote (RFQ) functions and a live bidding facility. It has 450 companies under contract.
A WebEDI (Web-based electronic data interchange) function has also been available since July. ZF, Continental and INA are now adopting this tool for their suppliers. Bosch will follow in early 2002.
In many cases suppliers already had portal projects for WebEDI under evaluation or in place but decided to shift lower-tier suppliers to SupplyOn because of the exchange's better connectivity.
Progress in engineering-oriented applications is less advanced, but SupplyOn is close to selecting a software vendor to develop engineering functions.
The exchange already relies heavily on SAP for basic operations and procurement software and ATOS in the logistics field.
SupplyOn has handled 550 RFQs and auctions to date and expects to double this number by the end of the year. RFQ activity has been particularly high, with a strong emphasis on direct materials and engineered parts.
SupplyOn is targeting this area and currently focuses on 30 material groups. Bosch has now moved its entire annual RFQ round with sub-suppliers to the exchange.
As well as providing an enhanced competitive picture, Bosch sees the use of SupplyOn's tools as a more effective way of communicating with its suppliers, and a means of strengthening relationships.
Klemm believes that greater education and support remains crucial for lower-tier suppliers, many of which have limited human and financial resources.
Lack of in-depth e-business knowledge in the lower tiers continues to hamper progress. SupplyOn is co-hosting supplier days - along with Tier 1 suppliers -to which Tier 2 and 3 vendors are invited. These provide practical demonstrations of the exchange's functionality and detail the contractual obligations of each side.