Volkswagen B2B plans
VOLKSWAGEN REVS UP ITS B2B NET MARKETPLACE
Volkswagen AG is Europe’s largest car manufacturer, producing 5 million cars, trucks, and vans each year. VW owns luxury car makers such as Audi, Lamborghini, and Bentley and family car makers such as SEAT in Spain and Skoda in the Czech Republic. The company has 300,000 employees and operates plants in Europe, Africa, the Asia/Pacific Rim, and the Americas. Vehicles produced by Volkswagen Group account for over 12 percent of the world market.
VW companies purchase annually 60 billion euros worth, or about US$73 billion, in components, automotive parts, and indirect materials, and these purchases represent more than 70 percent of VW’s annual revenue. Obviously, the procurement process and relationships with suppliers are absolutely critical for Volkswagen’s success. The VW Group was looking for ways to create more efficient relationships with its suppliers and reduce the cost of paper-based procurement processes. However, the company did not want to automate procurement using a public exchange or an industry-sponsored Net marketplace because it would have had to adapt its own business processes to a common framework that could be used by many different organizations. It decided not to participate in Covisint, the giant industry consortium Net marketplace set up by Ford, General Motors, and DaimlerChrysler, which provides procurement and other supply chain services for these companies, other automotive manufacturers, and their suppliers.
Instead, VW opted for a private platform that would enable it to integrate its suppliers more tightly with its own business processes. Operating as a private industrial network, VWGroupSupply.com enabled the VW Group to design a system that optimized its own business processes. During the early summer of 2002 the company began implementing a massive private B2B extranet for the Volkswagen Group and its suppliers called VWGroupSupply.com.
Volkswagen AG is Europe’s largest car manufacturer, producing 5 million cars, trucks, and vans each year. VW owns luxury car makers such as Audi, Lamborghini, and Bentley and family car makers such as SEAT in Spain and Skoda in the Czech Republic. The company has 300,000 employees and operates plants in Europe, Africa, the Asia/Pacific Rim, and the Americas. Vehicles produced by Volkswagen Group account for over 12 percent of the world market.
VW companies purchase annually 60 billion euros worth, or about US$73 billion, in components, automotive parts, and indirect materials, and these purchases represent more than 70 percent of VW’s annual revenue. Obviously, the procurement process and relationships with suppliers are absolutely critical for Volkswagen’s success. The VW Group was looking for ways to create more efficient relationships with its suppliers and reduce the cost of paper-based procurement processes. However, the company did not want to automate procurement using a public exchange or an industry-sponsored Net marketplace because it would have had to adapt its own business processes to a common framework that could be used by many different organizations. It decided not to participate in Covisint, the giant industry consortium Net marketplace set up by Ford, General Motors, and DaimlerChrysler, which provides procurement and other supply chain services for these companies, other automotive manufacturers, and their suppliers.
Instead, VW opted for a private platform that would enable it to integrate its suppliers more tightly with its own business processes. Operating as a private industrial network, VWGroupSupply.com enabled the VW Group to design a system that optimized its own business processes. During the early summer of 2002 the company began implementing a massive private B2B extranet for the Volkswagen Group and its suppliers called VWGroupSupply.com.