Suppliers rush to simplify supply-chain systems

As the ranks of e-commerce-enabled buyers grow daily, suppliers are now finding themselves scurrying to streamline and automate their supply chains.

One such supplier, Hitachi America Ltd., decided it could no longer juggle electronic data interchange, RosettaNet and XML orders on separate platforms to meet the needs of its buyers.

"We're basically a sales force," said John Gibb, director of business services at the Brisbane, Calif.-based firm's semiconductor division. "We have to respond to the customers' requests in this business. There's no saying no."

Framingham, Masssachusetts-based Staples Inc. also found itself dealing with a growing number of buyers who preferred to use the latest procurement applications.

The office supplier's IT organization found itself "formatting for each customer who wanted a buyer-hosted catalog," said Anne-Marie Keane, vice president for business-to-business e-commerce at Staples. "Over time, that's just not a scalable solution."

For both companies, the answer was consolidation and simplification.

Hitachi boiled down its three business-to-business platforms into a single environment. Gibb estimated that the yearlong effort will save his company more than US$10,000 per month. Hitachi also tapped Contivo Inc. in Mountain View, Calif., to help it map document files with new customers.

"Every new sale requires more mapping, and it just eats up our resources," Gibb said. "It can get tedious, but it's got to be done."

For its part, Staples purchased business-to-business content-management software from Trigo Technologies Inc. in Brisbane, Calif., to replace its homegrown user interfaces.

"It's a natural evolution for us," Keane said. "We've been working toward this [for] the past 18 months, and we were looking for vendors who had products that would allow us to push more content out to a larger number of customers."

Staples and Hitachi aren't alone. These types of supply-side constraints are to be expected in an industry as immature as the business-to-business e-commerce space, according to Karen Peterson, an analyst at Stamford, Connecticut-based Gartner Group Inc.

"It's no surprise they've got problems," she said. "It's just that the products out there to date have lacked the functionality to solve the problems."

But that's expected to change soon. Mo Treadway, an e-business partner at PricewaterhouseCoopers in New York, estimated that supplier-based business-to-business e-commerce software will be the key focus in the vendor community during the next six months.

"The lack of standardisation in the supplier products has been holding back the liquidity of the market," Treadway said, noting that the growth area for software vendors lies between the business-to-business transactions and the suppliers' enterprise resource planning systems.

Gibb said he agrees. "We all want one well we can dip into to get information," he said. "We know we can't dictate terms like our customers [can], so we're looking for solutions to encompass everything."

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