June 26, 2000
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Changing Marketplaces: Users Integrate Supply Chains
Operator apps let customers electronically present and modify production forecasts
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any marketplace operators have a grand vision: Not only will they simplify the buy-sell process, but they hope to cut waste out of supply chains by letting trading partners share demand forecasts, production schedules, and inventory data.Right now, few of the thousand online marketplaces in operation or in development offer supply-chain collaboration, but that's changing. Last week, Commerx Inc., which operates a marketplace for plastics processors called PlasticsNet.com, said it will offer a supply-chain collaboration service by partnering with Manugistics.
For a monthly subscription fee and incremental messaging fees, businesses that use Commerx will have access to hosted versions of Manugistics supply-chain applications, which present and modify demand and supplier production forecasts and inventory levels with select trading partners. Those capabilities should be available by year's end.
Commerx says the Manugistics deal represents an evolution in the marketplace business model. "We're not an exchange," says Commerx CEO Tim Stojka. "We're focused on creating collaborative trading networks where we can give customers apps that allow them to electronically integrate their supply chains."
RetailMetro, which operates the Furniture Trade Exchange, formed an alliance earlier this month with supply-chain software vendor Adexa Inc. that will let furniture retailers share demand forecasts with manufacturers and optimally allocate available supply to demand.
Online auction platform FreeMarkets Inc. has relationships with two supply-chain vendors-WebPlan Inc. for manufacturing industries and Xelus Inc. for service industries-while supply-chain company Syncra Systems detailed a marketplace version of its collaborative planning, forecasting, and replenishment package last week.
Analysts say availability of technology isn't the only hurdle for marketplaces trying to expand supply- chain capabilities. "The majority of today's existing trading exchanges haven't processed their first transaction," says Robert Ferrari, an analyst at AMR Research. "Initial activity has been directed at providing content, driving liquidity, and facilitating transactional and indirect procurement cost savings."
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