Companies will soon be able to cut out unnecessary expenditure by conducting the full sourcing cycle, from the specification and design of a new product to order processing, online through a global plant and mechanical engineering marketplace.
This is thanks to a joint venture between Babcock Borsig AG, MG Technologies AG and SAPMarkets Inc., the SAP AG subsidiary dedicated to creating and powering globally interconnected business-to-business marketplaces. These companies plan to develop and operate a global online marketplace for plant engineering and mechanical engineering companies encompassing a worldwide market volume of more than $ 800 billion.
"With plant maintenance contributing such a large degree towards the operational expenditure on most engineering sites, and with South Africa's currency under pressure, this marketplace promises to cut out any unnecessary expenditure," says Freek Malherbe, product manager: manufacturing at SAP Southern Africa.
He says this will be done through smarter parts sourcing and procurement, as well as through reducing stock holdings and purchasing of maintenance stocks only when they are required. "To a certain degree, South African engineering sites are reliant on foreign parts. With this marketplace in position, the risk of currency fluctuations will be reduced through just-in-time purchasing," says Malherbe.
Claus Heinrich, member of the executive board of SAP AG and member of the executive board of SAPMarkets, adds: "Driven by intense global competition, companies need to continuously develop innovative ways of increasing the efficiency of their operations to maintain a competitive edge.
"The new mySAP.com Marketplace for engineering companies will help our customers thrive in the new economy and significantly increase their competitiveness," he says.
The marketplace is designed to streamline the processes involved in sourcing and purchasing direct production materials using the mySAP.com Marketplace solution.
The newly established marketplace, ec4ec (e-commerce for engineered components) will be located at www.ec4ec.com and is slated to go live in October. It encompasses the full sourcing cycle, from the specification and design of a new product to order processing, and will include separate public and private areas to ensure the security of participating members' intellectual assets.
Using the marketplace, companies can collaborate on designs, projects and other technical information with their potential suppliers, in addition to conducting auctions, creating bid invitations, accessing supplier information and processing purchase orders.
Key benefits for buyers include an accelerated sourcing process through more efficient data exchange and collaboration techniques, and improved quality of information through more consistent specification and overall change management. Collaborative engineering capabilities in the marketplace integrate buyers and suppliers during the specification and design stages, enabling them to work together as if they were one company.
In contrast to many catalogue-based trading exchanges, this collaborative marketplace enables participants to purchase complex parts and obtain services that need significant collaborative engineering - including the intensive exchange of technical specifications, CAD models and project data - which is typical for an industrial company.
Founding members Babcock Borsig AG and MG Technologies AG will be the first to use the new marketplace for their sourcing activities. Babcock Borsig expects the ec4ec marketplace will help them achieve cost savings in excess of a hundred million deutschemarks by 2001.
Additional companies of all sizes are given the opportunity to invest in the marketplace or join as participants.
With this partnership, MG Technologies AG is entering one of the largest business-to-business markets on the Internet. This new engineering platform, together with the company's already successful chemical marketplace, cheop, is part of the MG strategy to realise the opportunities provided by e-business to increase profits and market shares.
For the ec4ec marketplace, SAPMarkets will provide e-business applications including collaborative engineering and project management, tendering and auctioning, bulletin boards and maintenance of supplier directories. The MarketSet solution infrastructure is currently being developed by SAPMarkets and Commerce One in the context of their partnership.
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Babcock Borsig AG
The Babcock-Borsig Group concentrates on highly profitable areas and future-based technologies. With its roughly 37,000 employees, the Group achieves sales of roughly DM 14 billion in the core business segments of power engineering, shipbuilding and special technologies. The Babcock-Borsig Group has earned a leading position internationally as a supplier of all turbine-related power station components. Moreover, the Group is pushing ahead with the construction of two MW-plus wind power plants and the design of smaller gas-driven power generation units in decentralized power engineering.
Babcock E-Business Solutions
Babcock E-Business Solutions (BES), a new project team, was formed on June 1. The BES team focuses on the coordination of existing e-business projects and their development in order to ensure the utilization of these solutions by other companies, primarily within the group. The integration and standardization of the group-wide e-business activities are also a task of the BES team. In addition, new web-based projects are initiated. BES' objective is to build up e-business know-how and to share its growing expertise with Babcock's employees. This is achieved through workshops and similar events, which serve as an information platform and increase employees affinity toward Internet technology.
mg technologies ag
mg technologies ag (mg) is the strategic management holding of a worldwide operating chemicals and engineering group with a turnover of 7.4 billion euro and more than 40,000 employees. Lurgi AG, Lentjes AG, and Zimmer AG plan and build turnkey systems for the fields of metallurgy, oil, gas, and chemicals, life science, environment, energy, polymers and synthetic fibres. Bochum based GEA AG is a leading supplier of plant and process systems. Together, they constitute mg engineering. Under the roof of mg chemical group, Dynamit Nobel AG produces explosives and specialty chemicals, especially for the pharmaceutical industry. Solvadis AG is active in the chemicals distribution. In 1999, mg launched www.cheop.com, today one of the most successful internet marketplaces for the chemicals industry. In the current financial year 1999/2000, mg aims for the sixth profit increase in succession.
mg e-business consulting
mg e-business consulting GmbH is a Frankfurt-based mg company focusing on development and support of e-business activities in the mg Group. As a competence center for e-business, it is in charge of coordinating all of the Group's current internet activities and serves as a hub for e-business projects set up anywhere within mg. Its goal is to cut costs by streamlining business processes, generate additional sales, and strengthen customer bonds. Using innovative e-business strategies, mg plans to establish large-scale projects with the potential to transform entire sectors, such as www.cheop.com, and later develop them into independent companies.
SAPMarkets
SAPMarkets Inc., a subsidiary of SAP AG (NYSE ADR: SAP), spearheads all business-to-business e-marketplace activities of SAP. Delivering mySAP.com Marketplaces, SAPMarkets extends the market leadership of SAP in inter-enterprise software solutions. In its "dream team" alliance with Commerce One, SAPMarkets enables enterprises and communities of all sizes and industries to efficiently conduct collaborative business on the Internet. Examples of such seamless cooperation through marketplaces include the dynamic linking of buyers and sellers, auctioning and tendering, collaborative forecasting and engineering across enterprise boundaries. SAPMarkets, based in Palo Alto, Calif., can be found at http://www.sapmarkets.com. More information on SAP can be found at http://www.sap.com.