The success of "layering" a new e-commerce solution over existing enterprise resource planning (ERP) systems will result in an estimated $10 million-a-year saving for PMP Communications.
PMP Communications, a large magazine distributor and commercial print company in Australia and New Zealand, says the new system will cut individual transaction costs from $200 to $20 and enable the company to appoint selected suppliers as supply chain management partners.
Mark Mitchell, CIO of PMP Communications, said: "One of the hurdles we had to solve with the new system was that each division of the company used different purchasing systems and purchased in different ways."
PMP teamed up with Getronics to create PMPCommerce, a specially tailored version of Microsoft Market using Windows 2000 Enterprise. This Web-interfaced product sits over PMP Communication's existing procurement systems in all divisions, from accounting to production.
Robert Muscat, chief executive of PMP, said the company wanted a solution to improve the group's procurement process and consolidate its purchasing power.
"In this way, PMP would be able to negotiate better prices with suppliers, use these prices for every purchase, and significantly reduce material, storage and inventory management requirements." Mitchell said: He acknowledged that the interface component of the system was a hurdle (due to the different systems that had previously been used), but despite normal development issues, the implementation has been successful.