BAE Systems is implementing an electronic trading system
linking it with 15,000 suppliers and predicts it will deliver £2.5m
a year savings when it is fully deployed in 2004.BAE
Systems has consolidated back office systems around five platforms
- Oracle, Baan, Manugistics, IFS and SAP - and linked them using
Webmethods integration software, said Dave Bergin, head of
e-trading.
The
armaments and engineering company is using Axway gateway software
to link these internal systems to the outside world.
When the
project is complete, BAE Systems will link to the Exostar
military/aerospace exchange, which is run in partnership with
Boeing, Raytheon, Lockheed Martin and Rolls Royce and to up to
15,000 suppliers.
For BAE
Systems the trading network will ultimately supply about 80% of the
requirements for commodity products such as metal and electronic
goods to 23 manufacturing plants.
Bergin
said, "The savings will come in a number of ways - reduced
headcount, by getting 1-2% discount on contract price by being able
to trade electronically, by spending less time progressing orders
and by integrating procurement information directly into
manufacturing planning schedules.
"Today it
is all done on paper with some EDI links. We don't get many
acknowledgements of orders and, because we don't get those
responses we get difficulties, so the new system will iron out some
of the errors which get into our planning."
"It is,
essentially, a cost-cutting measure but I believe we will have to
trade this way in future. We want to get to a situation where we
are integrated with our suppliers as if they were within our own
business."
Clive Longbottom, director at analyst Quocirca
said, "BAE Systems is somewhat behind and is using the Webmethods
and Axway technology to play catch-up and get onto Exostar, as
Lockheed Martin and the others already have done."