Volkswagen has said it will save up to 50% on its supply chain costs thanks to a new business-to-business Internet marketplace.
Although General Motors, Ford and other manufacturers have already established similar supply chain sites open to everyone in the industry, Volkswagen has chosen to go its own way with an open site tailored for the European market.
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Volkswagen board member Fransisco Javier Garcia Sanz said the initiative will simplify the ordering of groups of auto parts and other business supplies. Manufacturing parts, tools and office equipment will be ordered over the Internet. "In certain cases we expect to make savings of up to 50%," said Sanz.
Fellow board member Jens Neumann was unconcerned about going it alone. He said, "Volkswagen sees its chance to create a broad European standard. Our e-market is open to everybody."
Volkswagen's technology partners are IBM Global Services, which will provide servers and networking expertise, and i2 and Ariba which will deliver e-commerce supply chain software.
The Volkswagen deal is expected to generate enough traffic to sustain i2's added-value services to users. The company had previously said it would strip away business-to-business sites which do not pay their way.
A big issue for improving supply chain management is interactive transaction processing with suppliers, something Volkswagen said this deal will deliver.