Online Auto Industry B2B Electronic Commerce

1
Online Auto IndustryB2B Electronic Commerce

• Nadia-Shazrin Asari
• Christopher Butsko
• Joseph Carlen
• Ljubomir Cvetkovic
• Kevin Daily

2
Overview of Auto Industry

• The traditional supply chain of
  business-to-business transactions in the auto
  industry is costly
• Dealer commissions
• Other intermediary costs
• By automating supplier order-entry processes, a
  71/vehicle supply change can be removed
• This can result in a 1.0 billion savings
  opportunity per year! (Source AutoChain Online)

3
Customers

• Dealerships
• Dealers can trade among themselves to get rid of
  large inventory and increase other items low in
  inventory
• OEMs (Original Equipment Manufacturer)
• E.g. Ford, GM, Chrysler-Daimler
• Suppliers

4
Value Added (Suppliers OEMs)

• Auctions
• Get the best price for both selling and buying
• Introduction to new partnerships
• Streamline inventory and transaction process
• there exists an opportunity to remove 71 of
  supply chain waste per vehicle by automating
  supplier order-entry processesThis waste
  represents over 1.0 Billion savings

5
Value Added - Dealerships

• Dealer to Dealer Trading
• Overstocked dealers can trade with under stocked
  dealers
• Both parties benefit by having better inventory
  turn-around

6
Major Players

• Auto Exchange www.auto-xchange.com
• e-business for the auto business
• Besides being an online exchange between auto
  manufacturers and suppliers, the site facilitates
  collaboration on supply chain management, product
  design, and international marketing.
• General Motors www.gmtradexchange.com
• This automotive giants online procurement
  facility is still under construction. However,
  analysts expect it to be the largest player
• Moving towards becoming a portal for online
  automotive procurement

7
Major Players (contd)

• Ford https//web.keyinfo.ford.com/DDL
• The pioneer of automobiles has already developed
  an online interface between the company and its
  suppliers.
• Proprietary application for Ford
• BBCN http//bbcn.com
• Although its e-procurement functionality is not
  restricted to the automotive industry, it has
  demonstrated significant utility for online
  automotive procurement
• A dealer can go on-line for supplies and
  receive
  bids from suppliers all over the country.
  It really makes the entire process so much
  easier!" John Anderson - Owner of the 1
  Chevrolet Dealer in California

8
Reasons for current dominance

• General Motors and Ford Due to their tremendous
  purchasing power, technological prowess, high
  profile, experience, extensive supplier
  relationships, speed, and global presence, they
  have an obvious advantage over newer and less
  established online initiatives.
• BBCN As a large hub for e-procurement
  activity, BBCN is able to leverage the e-commerce
  expertise of partnered firms such as Cisco with
  the industry-specific strengths of large
  automotive manufacturers and suppliers.

9
Business Processes

• General Process (summarized from all 4 websites,
  since registration required us to take legal
  responsibility)
• A buyer must be registered with the website
• A supplier is usually considered a partner of the
  website
• A buyer searches for an auto part or vehicle that
  he needs
• Query results will display the information of the
  product
• If the site is an auction site, the suppliers
  will send their bid to the buyer, and the buyer
  will choose the winner.
• If the site is a regular trading site, buyer
  chooses the supplier to purchase from, and an
  order will be fulfilled.
• The buyer will be allowed to view his order
  history at the website

10
Business Processes (contd)

• Registration process at auto-xchange.com
• User must go through 5 steps before they are
  allowed to use the website (trade, search, manage
  account)
• e-Procurement process in bbcn.com
• Buyer submits a procurement inquiry (PI)
• Product available is listed, by Supplier
• Supplier sends a bid to Buyer
• Buyer chooses which Supplier to purchase from
• All other Suppliers are notified that the
  purchase is complete

11
Business Processes (contd)

• Requisition management at TradeXChange.com

Search options (sort/filter)
Requisition Listing
Line item count Total

• Most sites require the buyers/suppliers to be
  registered first before
• allowing them to use the website

12
From One-time to Repeat Customer

• Offer personalized features such Auto-xchanges
  MyExchange
• Maintain a to-do list
• Check order and auction activity
• Edit personal profile
• Maintain address book
• Offer customized purchasing capabilities for each
  user (TradeXchange)
• Enforce buyers procurement rules and pricing
• Broadcast email (Autochain Online)
• Suppliers and customers communicate directly
  regarding news
• Is plant closing for holiday?
• Is supplier hosting a supplier conference?

13
Improving Online Strategies

• Sites such as Autochain must provide more
  information available before registration
• How many suppliers?
• Who are suppliers?
• What are benefits to suppliers and buyers?
• Search feature to assure specific item is
  available
• Include demo of how auction works
• Provide online community
• Chat rooms to discuss products, hot items
• Online support and feedback sections

14
Improving Online Strategies (contd)

• Send email to buyers about upcoming items to be
  auctioned off
• Based on buyers preferences
• Buyer no longer goes through time-consuming
  searches
• Include industry news, events, and statistics
• Become one-stop shop for buyers and suppliers

15
Final Comparison of Sites

• The Good
• GMs TradeXchange
• Has more personalized/customized sections
  regarding account information, items you have bid
  on, etc.
• Fords Direct Data Link
• Nice organization of products, lots of online
  support
• BBCN.com
• Breaks auction down into categories, then into
  further sub-categories, making products easy to
  find
• The Bad
• Auto-xchange
• Must be a member to get even background
  information about what the site offers
  user-friendly interface though
• The Ugly
• Autochain Online
• Must be a member to get even background
  information about what the site offers
  user-interface poor