Blog: Dave LeggettE-marketplace/SupplyOn observations

Dave Leggett | 16 May 2003

I sat through a comprehensive presentation delivered by Cornelia Staib from SupplyOn yesterday and I picked up a few basics on e-marketplaces which I may as well share here while fresh.

Much of what SupplyOn does revolves around providing a standardised electronic platform for sourcing transactions between participating Tier 1 firms and their huge network of small and medium sized Tier 2 suppliers who provide them with parts for their systems and modules. The company was born when Germany's big Tier 1s realised a need for a shared standardised sourcing platform, thus avoiding costly duplication. Bosch, SiemensVDO, Continental and ZF are all shareholders, as is business software company SAP.

As I was given to understand it, that differs from Covisint in one very significant respect. Covisint was formed by OEMs (DC, GM, Ford) and is mainly concerned with enabling e-commerce transactions between Tier 1s and the different OEM sourcing portals. So, the two companies are largely positioned at different points in the supply chain and concerned with different things - one is a standardised platform for suppliers looking down from Tier 1, the other provides an interface between Tier 1s and individual OEM supply portals, GM, Ford etc.

But, that said, SupplyOn is also addressing the Tier 1-OEM interface for its sourcing platform and has formed a pilot project with Volkswagen. Perhaps BMW will be next...

SupplyOn's Big Idea is making its standardised transaction system easy to access via the Internet - just need a pc, modem and browser - so that small companies can easily participate. There is also a SupplyOn WebEDI solution that enables small companies to cover order/delivery/payment processes within the industry's preferred electronic systems.

According to Cornelia, SupplyOn is now breaking out from its initially German origins and the company expects to see more 'buy-side' participants emerge - outside of Germany - next year. One potential problem for SupplyOn is that some Tier 1s have already developed their own portals - Valeo for example - which would make it more problematic to participate with SupplyOn's. Sell-side sourcing participants are growing at about 100 firms a month - total around 1,250 now - 60% Germany, 21% Europe outside Germany, 19% outside Europe. There are 1,500 companies using SupplyOn's webEDI solution.

So, does the company make money? Cornelia said it has had positive cash-flow since the beginning of this year and is looking to break-even by the end of this year, early next.

There was a lot more info about the supply chain and things like collaborative engineering (in product development), which was all very interesting, but I recommend talking to SupplyOn directly if you want to know more. Website: www.supplyon.com

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