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Supply Siders

Global-supply management requires integrated, inclusive, real-time technology.
Companies that have dealt with global suppliers for a long time have developed some of this functionality themselves. Ford Motor Co. has a supplier-management metrics system, based on Java programming and Oracle databases, that tracks delivery performance, quality, and field activity such as defective parts that need to be recalled. Ford uses the data to rate suppliers, and suppliers can see electronically how they're doing, says Brenda Schultz, Ford's manager of purchasing-quality systems. Data comes from Ford's materials planning and logistics systems.

Covisint, the auto industry's growing business-to-business Web site, provides a variety of software tools, both acquired and internally developed, to support the more than 10,000 members that buy and sell on its site. Covisint counted among its accomplishments last quarter an agreement by DaimlerChrysler, Ford, and General Motors to standardize on applications for online auctions, product-quality planning, and indirect material purchases.

PeopleSoft's Supplier Relationship Management suite includes tools to help analyze and manage money spent on supplies, supplier information, contracts, and sourcing projects. Next quarter, PeopleSoft will add features to create tighter links between supply-chain planning and strategic sourcing; that will, for example, let suppliers and employees across business lines participate in the development of a request-for-quote bid.

Commerce One Inc. offers technology for strategic sourcing, buying, and contract management. Its latest product, Conductor, which is due next month, will manage documents across multiple enterprises and processes using XML technology. "We say the sourcing solution needs to interoperate" with other apps, says Narry Singh, senior VP of worldwide marketing. "It must be horizontal process-enabled." Frictionless Commerce Inc. later this quarter will launch a version of its Frictionless Sourcing software that incorporates programming interfaces that allow integration with enterprise apps, such as ERP. The new version also will include globalization functionality that will let a company configure the software's language, date and time, and currency preferences.

Vendors and users have tackled important aspects of sourcing and procurement, but no one has realized or exploited the full potential of global-supply management, says Tim Minahan, VP of supply-chain research at the Aberdeen Group. "The time is right for companies to develop or adopt a technology infrastructure that can provide a single command-and-control center for aligning, executing, and monitoring supply-management processes on a global basis," he says.

Glen Meakem -- Richard Kelly

Software isn't enough to improve supply management, FreeMarkets CEO Meakem says.
FreeMarkets' ES technology isn't that comprehensive, but it does offer advantages, Minahan says. First, it's built on a Web-based architecture, .Net, that can better support collaborative and usability requirements across an extended enterprise; and second, FreeMarkets has deep domain expertise in commodity categories and sourcing methodologies. This, Minahan says, "will be very difficult for technology vendors to replicate."

FreeMarkets co-founder and CEO Glen Meakem is confident that FreeMarkets has the vision and resources--400 employees in Europe and Asia and 700 in the United States, plus $97 million in cash, according to the most recent Securities and Exchange Commission report--to be a player in the global-supply management market. Meakem says his company's pairing of software and related services--from training to vertical-market expertise to identifying deep bases of specialty suppliers--is its competitive advantage. Global-supply management "isn't just software," Meakem says. "If it's going to be done right, it has to be a combination of software, information, and services."

-- with Beth Bacheldor, John Foley, and Marianne Kolbasuk McGee
Write to Bob Evans at [email protected]

Photo of Glen Meakem by Richard Kelly