E-market watch


Some of the largest ‘spot-buying' e-marketplaces are beginning to face up to the need to provide members with in-depth collaborative tools, as participants start to question the value of hubs which offer only auctioning capabilities.

General Electric's Global Supplier Network (GSN) is to introduce enhanced collaborative forecasting applications during 2002, in order to encourage supplier participation. Although it is already one of the world's biggest e-marketplaces, the 36,000 supplier members that currently use the exchange only represent a quarter of the total number of General Electric (GE) suppliers.

The problem is highlighted by news that GE Medical, a subsidiary of the GE group, has recently bypassed the proprietary GSN infrastructure to source its office equipment. Instead, GE Medical will connect to Hubspan, an independent e-marketplace that is preferred by its office equipment supplier Office Depot.

Lee Garbowitz, manager of GE's corporate initiatives group says that the collaborative enhancements are needed because many suppliers are not interested in investing their own resources in integrating with GE businesses, only to end up competing solely on price. The new collaborative tools will enable suppliers to compete on how well they can synchronise their delivery and production dates with GE buyers' forecasts.

Elsewhere, the GlobalNetXchange (GNX), a retail industry e-marketplace, has rolled out its own collaboration suite with technology from supply chain software vendor, Manugistics. Unlike GSN, in-depth collaboration is a tool that most retail and consumer packaged goods (CPG) e-marketplaces have planned to implement since the start. Fulfilling this promise has not been so easy however, and GNX is one of the first of these e-marketplaces, alongside CPG e-marketplace Transora, that has begun to roll out collaborative applications after about two years of planning.

Maintenance, repair and overhaul

Aeroxchange, the aviation industry e-marketplace owned by a consortium of 32 airlines, has partnered with Kentucky-based Overhaul Search to provide a database of maintenance, repair and overhaul (MRO) facilities on its e-market. Overhaul Search provides a directory of 600 MRO vendors in 36 countries. These vendors will not be integrated directly into the Aeroxchange platform, however – further proof of the challenge e-marketplaces face in trying to find suppliers who are willing to commit to the cost of a complete integration.

However, Aeroxchange has still achieved much more since its 2000 inception than Exostar, the aviation and defence industry e-marketplace. Since its own founding, also in 2000, Exostar has not managed to move beyond providing procurement tools for indirect goods such as office supplies. The exchange suffered a major setback in June 2001 when CEO Andy Plyler resigned. Six months later, Exostar has appointed Donald Bielinski, the former chief financial officer of MRO services specialist Grainger.com, in order to speed up the development and deployment of its planned direct procurement and MRO tools.

Post-Enron competition

Following the collapse of US energy giant Enron and its EnronOnline e-marketplace, several new energy e-markets are preparing to battle it out for a share of the $639 billion (€721.5 billion) in energy trades that will be conducted online in the US this year. The most obvious successor to EnronOnline is the New York-based IntercontinentalExchange (ICE). Founded in 1999, ICE already trades many of the energy products that EnronOnline provided, and since Enron's collapse, it has reported a surge in trading on its own system. Other established exchanges vying for Enron's market include Tradespark, GFInet online, and Houstonstreet.com. However, E-lecTrade, a new exchange that has been in development for two years, claims its ability to trade complex structured energy products will win over more of Enron's old custom than the simple spot buying abilities on ICE. Let the battle commence. According to Forrester Research, half of all North American energy trading, currently valued at $5 trillion, will occur online by 2005.

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics