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Collaborative Commerce Enablement -- Using Both Public & Private Marketplaces Dr. Hau-Chen Mike Lee Com2B Corporation.

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Presentation on theme: "Collaborative Commerce Enablement -- Using Both Public & Private Marketplaces Dr. Hau-Chen Mike Lee Com2B Corporation."— Presentation transcript:

1 Collaborative Commerce Enablement -- Using Both Public & Private Marketplaces Dr. Hau-Chen Mike Lee Com2B Corporation

2 Adding value to the Entire Product Lifecycle

3 The linkage of Private & Public exchanges

4 Agenda Com2B Corporation Briefing Taiwan Market Reference cases Conclusion

5 Com2B Corp. Leading B2B Marketplace Service Provider in Greater China Region E-Marketplace Enabler by providing industry leading platform, business services and solutions

6 Com2Bs Shareholders -- Represented 9 Industries Value added industry leaders Far Eastern Group Telecom, Retail Lite-on Group Components Walsin Lihwa GroupSteel/Cable/Wire Yulon GroupAutomobile SESODAChemical ShinKong GroupSecurity Systex, Netpacific…etc Platform Providers CompaqComputer Commerce One B2B Solution WI HarperVenture Capitalish

7 Major Milestones July 2000 Launches Commercial Services & linked to GTW, Chinese platform of e-procurement system, data transmission & services, and suppliers interface ready Sept. 2000 Launched Shin-Kong Security Exchange, the FIRST security equipment e-marketplace in Taiwan Nov. 2000Successful integration of Supply Chain service into e- Marketplace

8 Dec. 2000 More than NT$110M reverse auction been conducted Mar. 2001 Successful GTW Connectivity with eScout for Taiwans 1 st Bicycle marketplace May 2001 Branch into China – Com2B East Corp., expansion B2B EC & marketplace services to China market July, 2001 Alliance Formed with Computex Online,Taiwan Toy Manufacturers Association, and SECA Construction Information Center Major Milestones

9 Agenda Com2B Corporation Briefing Taiwan Market Reference cases Conclusion

10 Taiwan Market Total national trading amount reach to US$288B in year 2000, the 14 th largest country in global ranking* Small and Medium business dominate Taiwan market, 98.8% of total business entities. SME business contribute 47% of National Total Outputs; 20.03% of national export amount Play as top global OEM manufacturers, focusing on Information Technology and Telecommunications products, key market to US and Europe *Source: Small and Medium Business White Paper in Year 2000, SMEA, MOEA, Taiwan

11 Taiwan Market Key B2B beneficiary due to expected increase in outsourcing trend for global electronics manufacturing. In the history, companies only emphasize on manufacturing efficiency, neglect interactions with end-users to last-tier suppliers. Move forward to private network to gain operational advantage of sourcing efficiency, cost efficiency, and process efficiency. Reluctant to open private network to public.

12 Agenda Com2B Corporation Characteristics of Industries in Taiwan Reference cases Far Eastern Textile Online Reverse Auction CAPCO: 1 st EBP Project Hospitality e-Marketplace Conclusion

13 Reference Case 1 Far Eastern Textile Corp. Textile on-line Reverse Auction The First Textile Industrial online Auction/Reverse Auction Platform in Taiwan for procurement of textile rolls, fiber, base assemblies and other important materials.

14 About Far Eastern Group (FEG) The 5th largest business group in Taiwan Group Capital: +US$45 Million Total Revenue (Y2000): US$ +5.5 billion Group Employees: +23,000

15 Key Business of FEG Petrochemical Synthetic Fiber & Textile Cement & Building Material Department Store Retail Financial Services Sea/ Land Transportation Social Responsibilities Information Technology Tourist Hotel Construction Communications and Internet

16 The Diversification of FEG

17 FEG e-Business Model Hospital Private Market Auction Global Trading Web Cement Others B2B Portal Textile Retail Telecom FEMHFETL FEDS FETNCIC Asia Cement Hyper

18 Current Procurement Status Yearly procurement volume: NT$300B 40 procurement officers, 37,000+ requisitions/year 900+ requisitions per procurement officer a year Major products are PVC, Direct Material Construction/ engineering, Computer MRO etc. Suppliers: 5000+

19 Issues Manual order processing -> inefficiency Manual order processing -> inefficiency Not real time order status management -> time consuming Not real time order status management -> time consuming Lengthy Process -> difficult for tracking Lengthy Process -> difficult for tracking Distributed information -> ineffective utilization of information Distributed information -> ineffective utilization of information Weak technology infrastructure -> Stay in manual stage Weak technology infrastructure -> Stay in manual stage

20 Project Goals – FEG e-Procurement Web-based infrastructure, high internet connection. Web-based infrastructure, high internet connection. Re-engineering work flow and business process Re-engineering work flow and business process Adoption of e-form Adoption of e-form Build a real-time RFQ system Build a real-time RFQ system

21 Implementation Plan Phase 4 Connect to e-Marketplace Phase 1 E-Auction Phase 2 Lotus Notes System E-procurement engineering system Order Management System Integrated With EBD Phase 3 Supply Mgmt tool (BugEyes) Catalog/e-Sourcing

22 Online Reverse Auction Project period: Dec 2000~Aug. 2001 Auction cases: 113 Suppliers: Average 5 / per case Result: 10% cost savings (1~24% per case, comparing to historic procurement price)

23 Project findings More than 100 reverse auctions conducted More than 50% are engineering-related projects Average Purchasing Cost saving : 10% Very effective tool to drive out market price Expanding sourcing base provides long lasting results

24 Benefits to FEG Deploy advanced IT technology in procurement Pricing transparency improve market efficiency Easy of adoption Drive out market price effectively Provide instant E-commerce benefits

25 Customer Experiences Pre-auction preparations are essential End-to-end process flow integration with existing procurement flow Need to overcome legacy process and historical burdens Supplier communication and readiness are critical to on- line reverse-auction success

26 e-Catalog Scenarios Procurement world-wide Access via Internet C C C Catalog hosted by company (intranet) Purchasing department maintains catalog content is provided by suppliers C C C 3 3 FETL Purchasing Centre Ext. supplier owns catalog C C C Access via Internet 1 1 Supplier updates catalogs Catalog / Content broker multi-supplier catalog maintained & hosted by external catalog broker C C C C C C 2 2 DB Internal catalog Purchasing from own stock (within company boundary) 4 4 DB

27 Connect To Marketplace MarketSite eCome.Com HOSTED EBD ERP United- Purchasing Center FET IP CDK Middleware ERP CDK Suppliers Asia Cement Notes United- Purchasing Center

28 Reference Case 2 CAPCO 1 st SAP EBP Project implemented in Asia Reference Case 2 CAPCO 1 st SAP EBP Project implemented in Asia

29 About CAPCO Established in 1979 by BP, CPC(Chinese Petroleum Corporation) & CIC(Central Investment Co.) 2 nd largest PTA manufacturer globally, 1/ 8 of global PTA volume 1997 Corporate re-engineering include process reorganization SAP ERP system implementation strategic purchasing & business units reorganization ISO 9002 & 14001 certified.

30 Current Procurement Status SAP ERP based Yearly procurement volume: NT$20~30B 11 procurement officers Major procurement items are 90% direct materials (PS, catalyst..) and 10% MRO.. Suppliers: 5 major Direct materials suppliers, over 1000 suppliers…

31 Quotation and Order processed by fax,e-mail, phone RFQ (Request for Quotation) of each requisition Working time limitation : Order processing can only be done during office hours Man power limitation : Current staff can only support 5 factories Issues

32 Project Goals Project period: June~Sept. 2001 Streamline procurement process Enhance company competitiveness Tightly integrate headquarter with factories Effective man power cost control: No procurement officers for new factory Starting e-procurement system as basis for e-commerce and future into private exchange

33 Key Findings A new powerful online game on internet for bidding process Ensure less buyers resources consumed, but more fair prices gained. Communication method changed for ordering and inquiry Communication channel extended from office hours to 24 hours with less cost. Utilize resources for data entry: All entered data can be shared and reused by both buying and selling side.

34 System Architecture EBPSystem Web Server/ ITS Catalog OCI ALE BAPIs Marketplace XML DB Browser Buyer: Maintain Catalog Price User: Order Release

35 Benefits to CAPCO (1) Integration with SAP ERP system Web based, Workflow-driven, e-Catalog management Reduce RFQ and order processing time - > Faster purchasing decision Decrease order fulfillment cycles, - >24 hours real-time processing Reduce purchasing transaction costs Employee-centric service approach

36 Benefits to CAPCO (2) Seamless supplier integration Improved sourcing capability thru efficiently parametric product search Fully cycle process involving all partners Focus on strategic supplier management Upgrade procurement officers from tactically to strategically Ready for e-Marketplace environment

37 Reference Case 3 Hospitality e-Marketplace

38 Ranked Top 3 in Taiwans Service industry Total foreign exchange revenue from tourism reached 3.7 billion USD in 2000, equaling to 1.2% of the GDP The strategic industry for Taiwans future economy development. Taiwans Tourist industry

39 Current Issues WTO Challenges Low usage of Information Technology Growing Tourist market opportunities

40 Project Scope Builder Bundled Services Business Services Framework eLogistics Add-In Services HIS eRelax eService eProcurement ISP/BandwidthPayment /System e-Sourcing/ bidding Auction Service Content Service B2B B2C Supply Distribute AgentLodgingCustomer

41 Value proposition eCatalog Purchasing eProcurement end-to-end Integration eSourcing & Reverse Auction On-line management of operation activities and financial things Interconnecting all tourist industry platforms, facilitating information sharing and system integration

42 Benefits to customers Reduce inventory level Value-added Services Less purchasing and administration cost New Business Process, Market & Customers Raising operating efficiency and quality management of services. Connected with the related international websites and industry marketplaces such as travel & airlines sites, chains of large hotels, making Taiwan the travel information center of Asia-Pacific.

43 Conclusions For sophisticated buyers, putting sensitive trade data on public facility is tough While trade is private, big buyers require sourcing expansion to improve procurement efficiency Successful e-procurement requires efforts to maintain suppliers online

44 Conclusion 2 Opportunities for public marketplace service providers Supplier network operational support Sourcing expansion tools Automating suppliers qualification process Industrial specific database, product catalog and supplier information Industrial specific tools More than 50% of reverse auctions on are engineering related Preparation for engineering bid requires analysis in materials and labor

45 Challenges to B2B industry Business Process Integration Many-to-Many environment integration with different variations Scalability ASP business service: one instance, multiple data Support Many-to-Many relationships Interoperability Deploy once, used globally

46 Thank you. For more information, welcome to our website :

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