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In fact, any company or industry can benefit by following the example of the carmakers The aerospace industry is planning to start MyAircraft as a Web site for supply and inventory management The aerospace and defense industry group that includes Lockheed Martin, Boeing, Raytheon BAE Systems, and CommerceOne (a B2B e-commerce solutions leader) plan an independent Web exchange for the global aerospace and defense industry This aerospace and defense exchange is separate from the MyAircraft exchange and will be based on the CommerceOne MarketSite Portal Solution The four aerospace and defense companies will buy $71 billion in goods and services from 37,000 suppliers using CommerceOne Aerospace companies are typically not on the cutting edge in technology, but then neither are the automobile manufacturers, typically The Financial Industries Markup Language is an initiative by JP Morgan and PriceWaterhouseCoopers This is an effort to unify the data format for financial data transferred among large corporations The Steel Markup Language (SML) is being developed by WebMethods, Computer Sciences Corporation, and E-Steel Corporation SML can be used to simplify data and information transfer across all partners in the steel industry E-Steel does business with more than 1,500 companies, including USX and Dofasco MetalSite includes Weirton, Bethlehem Steel, LTV, and Ryerson Tull MetalSpectrum is an exchange for specialty metal products among Alcoa, Allegheny Technology, Kaiser Aluminum, North American Stainless, Olin, Reynolds Aluminum, Thyssen North America, and Vincent Metal Goods Johnson & Johnson, GE Medical System, Baxter International, Abbott Labs, and Medtronic plan to launch an e-business exchange Health care providers could use an Internet exchange to reduce their procurement costs by 40 percent by reducing paperwork and automating processes Sears, Roebuck, & Co and Carrefour SA have created a retail e-commerce venture called GlobalNetXchange, which is similar to the auto manufacturers agreement This exchange will represent $80 billion in supply chain business and link with 50,000 suppliers, partners, and distributors In an activity separate from its support for the auto exchange, Oracle Corp will also support this exchange Wal-Mart, the world s largest retailer, has no plans to join; it will continue to use its own e-commerce system for supply chain activities However, Sears, the second largest retailer in the United States, and Carrefour, the second largest retailer in the world, both plan to encourage other retail-
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ers to join the exchange Perhaps as GlobalNetXchange gains more credibility and grows in number of members, Wal-Mart will also join the team Buzzsawcom is the exchange for the construction industry Novopointcom is a food ingredient B2B site in collaboration with Ariba and Cargill Novopointcom competes with Inc2inc, which was also started by Ariba Although these efforts provide greater experience, they can cut into the competitive advantage of the developer According to International Data Corp (IDC), three types of B2B e-commerce exchanges exist The first is the method of selling through a Web site, where there are few suppliers and lots of customers The second is based on procurement, where there are a few dominant buyers, like with the automakers exchange An emerging third type will be digital marketplaces; which will be like farmer s markets across the Web, in which buyer and seller may come together in one of many marketplaces
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If you work for a company that can exert some clout, consider collaborative efforts If you are a small cog in a big machine, like the rest of us, explore various industry B2B e-commerce exchanges and compare what they offer Also, look into some of the other exchanges They are not fads and they are not going away They are here to stay You do not need to become an expert in XML, but reading a few articles to understand what it is all about will not hurt The bottom line is that a little education can result in dramatic savings in procurement costs You could be the champion for B2B e-commerce, the first on your block More importantly, you could be the hero the next time your boss asks, Do you know where we could buy some or Budget is tight Do you know how we could save a few bucks Then you could say, yes and save the day The implementation of a standardized Web-based B2B exchange for the supply chain is one of the most dramatic marketplace advances over the past 10 years This B2B e-commerce convergence of industry verticals around a common XML vocabulary substantiates a trend toward improved procurement efficiencies and costs Even if GM saves only 5 percent on procurement costs, consider that their costs are on the order of $138 billion, so 5 percent is more than the R&D budgets of most corporations
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