Volkswagen in July plans to
launch a business-to-business e-commerce system based on the Internet to
process general purchases from 3,000 Brazilian and 500 Argentine vendors.
According to Elias de Macedo, technology manager at Volkswagen, the goal of
the e-commerce system deployment is cut costs in materials acquisition
processes and diversify purchase methods.
“When we use
paperwork, the purchase process involves more bureaucracy and takes longer.
We want to make our business processes simpler,” says Macedo.
General purchases involve presently seven Volkswagen factories in two
countries with 3,000 Brazilian and 500 Argentine employees.
Among vendors there are 4,230 companies employing 21,000 people.
“Each
vendor uses a different process and solution that must be integrated with
our e-commerce system,” says Macedo.
For executives working in this area, the biggest challenge is cultural and
not difficulty with technology.
To
Volkswagen technology managers, the Internet is being used here because it
offers great flexibility and solves the problems of international
communication costs, added Macedo.
Volkswagen by July will migrate the business-to-business e-commerce
system for efficient purchases on the Internet.
Net 2000, the system used now, runs on a private network and has already
saved the company US$ 400
million, according to Carlos Boschetti, IT director at Volkswagen.
Macedo explained that the deployment of Net 2000 Volkswagen reduced the parts
acquisition lead time from 56 to 7 days, and increase the number of vendors
for each item from 3 to 10 companies.
According to Macedo, the company buys 7 million parts each day through Net
2000 from 550 Brazilian and 180 Argentine vendors. In 1998, this e-commerce
system was responsible for US$ 3 billion in transactions.
