Vendors Seeing Savings In B2B
By Alan Wolf -- TWICE, 4/30/2001
WASHINGTON, D.C. — Though still in its infancy, business-to-business e-commerce is already yielding significant savings for major appliance manufacturers. And the best is yet to come.
That was the word from vendors, analysts and marketplace service providers partaking in a panel discussion about the state of b-to-b e-commerce within the appliance industry during the Association of Home Appliance Manufacturers Annual Meeting here earlier this month.
Moderator Sanjay Gupta, an analyst with Internet research firm Gartner Group, kicked off the discussion by pointing to the explosive growth of online b-to-b sales. Gartner projects that worldwide sales will go from $403 billion last year to an expected $953 billion in 2001 and a staggering $7.3 trillion by 2004. "There's no need to panic because dot.com became dot.bomb," he said. "E-business as a concept is here to stay, will continue to provide benefits, and must be an integral part of your overall business strategy."
It already is at GE, where it will drive $1 billion in cost from the system this year. According to Blair Johnson, manager of portfolio services for GE's Global eXchange Services unit, the company has built "an intelligent supply chain" by digitizing its front and back office operations and establishing real-time information flows.
"The idea is to make as much information available to business partners as possible to facilitate exchange and trade," he said, citing the 1 billion electronic transactions valued at $1 trillion that GE conducts annually. Resulting benefits ... include inventory reduction, increased speed to market and, ultimately, reduced prices.
"We've removed billions of dollars from the process and will drive unprecedented value," Johnson said, adding that GE prefers its own private online exchange to public trading exchanges due to the private nature of the information being shared.
Ken Boyle, VP/general manager of e-commerce for Maytag, said his company still has "a ways to go" on the buy side of b-to-b, given the long-term contracts and traditional supplier relationships it maintains. Nonetheless, it is busy "digitizing to drive out costs," has already begun dabbling in reverse auction sourcing, and is providing some preliminary services to its retail customers on the sell side as well.
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