DaimlerChrysler Initiates Largest Online Bidding Process

    *  Order volume of over euro 3.5 billion during four days
    *  Passenger Cars materials purchasing takes online bidding process beyond
       traditional standard parts for the first time
    *  Covisint online exchange proves its worth

    STUTTGART, Germany, May 15 Last week DaimlerChrysler
conducted what was, to the best of its knowledge, the largest online auction
to date at an Internet exchange.  The Internet-based bidding process
determined the prices of parts for future products.
    After careful preparation, the five participating suppliers took part in
bidding that proved to be very competitive.  Over four days, 1,200 parts were
traded in 80 combinations worth up to euro 2 billion a piece.  The total
volume of orders that will be placed as a result of the event was on the order
of euro 3.5 billion.  Covisint provided the Internet application for the
bidding and successfully managed the event without any technical problems.
    It again became evident that, even in the case of this large volume of
orders, online bidding processes shorten procedures considerably both for
DaimlerChrysler Purchasing and for the bidders.  In addition, it makes
participating bidders aware of their price position compared with their
unnamed competitors, allowing them to draw corresponding conclusions.
    Whereas in the past online bidding processes involved only products that
could be standardized or were not very complex, such as car batteries,
starters or oil baffles, DaimlerChrysler has now proved that this process can
successfully be used for situations where complex orders must be placed.  The
suppliers who participated in the online bidding process were selected by
Purchasing after a thorough analysis.  On the basis of the results of the
online bidding event, Purchasing will now make the final decision regarding
the placement of orders.  Factors such as the technology, logistics and
quality performance of the bidders are also taken into account during this
process.
    Johannes Rudnitzki, head of Purchasing - Passenger Cars for Mercedes-Benz
and smart, comments: "We are extremely satisfied with the results of this
event.  Online bidding has proven to be an outstanding purchasing tool even
when the placement of the orders is this complex. But the precondition for
this was a detailed description of the object of the bidding.  Without a doubt
this promising tool will now be widely used by our purchasers."
    In addition to the use of Internet-based catalogues, the online bidding
processes are among the most important e-procurement activities at
DaimlerChrysler.  They form a central component of the DCXNET initiative.