Collaborative Commerce Enablement

-- Using Both Public & Private Marketplaces

Collaborative Commerce Enablement

-- Using Both Public & Private Marketplaces

Dr. Hau-Chen Mike Lee

Com2B Corporation

Adding value to the Entire Product Lifecycle

Adding value to the Entire Product Lifecycle

The linkage of Private & Public exchanges

The linkage of Private & Public exchanges

AgendaAgenda

Com2B Corporation Briefing Taiwan Market Reference cases Conclusion

Com2B Corp. Com2B Corp.

Leading B2B Marketplace Service Provider in Greater China Region

E-Marketplace Enabler by providing industry leading platform, business services and solutions

Com2B’s Shareholders-- Represented 9 Industries

Value added industry leaders

Far Eastern Group Telecom, Retail

Lite-on Group Components

Walsin Lihwa Group Steel/Cable/Wire

Yulon Group Automobile

SESODA Chemical

ShinKong Group Security

Systex, Netpacific…etc

Platform Providers

Compaq Computer

Commerce One B2B Solution

WI Harper Venture Capitalish

Major MilestonesMajor MilestonesJuly 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. 2000 Successful integration of Supply Chain service into e-

Marketplace

Dec. 2000 More than NT$110M reverse auction been conducted

Mar. 2001 Successful GTW Connectivity with eScout for

Taiwan’s 1st 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 MilestonesMajor Milestones

AgendaAgenda

Com2B Corporation Briefing Taiwan Market Reference cases Conclusion

Taiwan MarketTaiwan Market

Total national trading amount reach to US$288B in year 2000, the 14th 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

Taiwan MarketTaiwan 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.

AgendaAgenda

Com2B Corporation Characteristics of Industries in Taiwan Reference cases

• Far Eastern Textile Online Reverse Auction• CAPCO: 1st EBP Project• Wise.net: Hospitality e-Marketplace

Conclusion

Reference Case 1

Far Eastern Textile Corp.

Textile on-line Reverse Auction

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.

About Far Eastern Group (FEG)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

Key Business of FEGKey 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

The Diversification of FEGThe Diversification of FEG

FEG e-Business Model

Hospital

Private Market Auction

Private Market Auction

Global Trading Web

Global Trading Web

CementOthers

B2B

PortalTextile

RetailTelecom

FEMHFETL

FEDS

FETNCIC

Asia Cement

Hyper

Current Procurement StatusCurrent 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+

IssuesIssues

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 trackingLengthy Process -> difficult for tracking

Distributed information -> ineffective utilization of informationDistributed information -> ineffective utilization of information

Weak technology infrastructure -> Stay in manual stage Weak technology infrastructure -> Stay in manual stage

Project Goals – FEG e-Procurement Project Goals – FEG e-Procurement

Web-based infrastructure, high internet connection.Web-based infrastructure, high internet connection.

Re-engineering work flow and business processRe-engineering work flow and business process

Adoption of e-form Adoption of e-form

Build a real-time RFQ systemBuild a real-time RFQ system

Implementation PlanImplementation 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

Online Reverse Auction 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)

Project findingsProject 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

Benefits to FEGBenefits 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

Customer ExperiencesCustomer 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

e-Catalog Scenarios e-Catalog Scenarios

Procurementworld-wide

Access via

Internet

C C

C

Catalog hosted by company (intranet)

• Purchasing department maintains catalog• content is provided by suppliers

C

C

C

33

FETL Purchasing Centre

Ext. supplier owns catalog

C

C

C

Access via Internet

11

• Supplier updates catalogs

Catalog / Content broker

• multi-supplier catalog• maintained & hosted by external catalog broker

C

C

CC C

C

22

DB

Internal catalog

• Purchasing from own stock (within company boundary)

44

DB

Connect To MarketplaceConnect To Marketplace

MarketSiteMarketSiteeCome.ComeCome.Com

HOSTED EBDHOSTED EBDERP

ERP ERPUnited-Purchasing Center

FET

IPCDK

CDK

CDK

Middleware

ERP

CDK

Suppliers

Asia Cement

Notes

United-Purchasing Center

United-Purchasing Center

Reference Case 2

CAPCO

1st SAP EBP Project implemented in

Asia

Reference Case 2

CAPCO

1st SAP EBP Project implemented in

Asia

About CAPCOAbout CAPCO

Established in 1979 by BP, CPC(Chinese Petroleum Corporation)

& CIC(Central Investment Co.)

2nd 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.

Current Procurement StatusCurrent 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…

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

Project GoalsProject 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

Key FindingsKey Findings

A new powerful online game on internet for bidding process

Ensure less buyer’s 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.

System ArchitectureSystem Architecture

EBPEBPSystemSystem

EBPEBPSystemSystem

Web Server/Web Server/ITSITS

Web Server/Web Server/ITSITS

CatalogCatalogCatalogCatalog

OCI

ALE

BAPIs

Marketplace

XMLDB DB

Browser

Buyer: Maintain Catalog Price

User: Order Release

Benefits to CAPCO (1)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

Benefits to CAPCO (2)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

Reference Case 3

WISE.net

Hospitality e-Marketplace

Reference Case 3

WISE.net

Hospitality e-Marketplace

Ranked Top 3 in Taiwan’s 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 Taiwan’s future economy

development.

Taiwan’s Tourist industry

Current Issues Current Issues

WTO Challenges

Low usage of Information Technology

Growing Tourist market opportunities

Project Scope

WISE.netBuilder

Bundled ServicesBusiness Services Framework

eLogisticsAdd-In Services

HIS eRelax eService

eProcurement

ISP/Bandwidth Payment /System

e-Sourcing/ bidding Auction Service

Content Service

B2BB2B B2CB2C

Supply Distribute Agent

Lodging

Customer

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

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.

ConclusionsConclusions 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

Conclusion 2Conclusion 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 Com2B.net are engineering related

Preparation for engineering bid requires analysis in materials and labor

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

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