Volkswagen's B2B Market Place Set Up

Nearly All of Procurement Volume Managed Via the Internet Applications Bundle for Suppliers on Platform 'VW Group Supply.Com' WOLFSBURG, Germany, Nov. 20 -- The Internet platform started by Volkswagen in the summer of 2000 is up and running. The most important components: Online-Catalogue-Purchasing, Online-Negotiations (auctions), Capacity management (eCap) have been set up for Audi and Volkswagen and have been introduced in the other brands and regions of the Group.

Suppliers can find information on procurement, logistics and quality standards for all eight brands and the three regions of the Volkswagen Group on the new portal ``VW Group Supply.com''. They can click on every application and register themselves with their passwords. 5,500 suppliers have already been using individual elements of the market place for some time. Volkswagen has been sending inquiry and offer documentation via the Internet using the ESL system (Electronic Supplier Link) since April 1999. The suppliers now have quick access to all components via the new standardized Group portal.

500,000 transactions took place this year on Volkswagen's private B2B market place. Nearly the entire procurement volume of more than euro 50 billion of the Audi, Bentley, Bugatti, Lamborghini, Seat, Skoda, Volkswagen and Volkswagen commercial vehicle brands will be managed via ``VW Group Supply.com'' in the future. Many applications, such as interactive negotiations via the Internet, are now a daily part of the purchaser's job. Since Summer 2000 more than 600 online negotiations have been carried out with more than 4,000 suppliers. Currently, 6,000 employees all over the world can order approximately 360,000 different articles directly from 200 suppliers in the Catalogue-Purchase section. With the help of the capacity management system ``eCap,'' suppliers and the Volkswagen Group can discuss requirements and capacities. This results in lower storing and transport costs for all involved. ``Our suppliers can, primarily through the use of eCap, plan for the longer term, react more quickly and communicate with us more clearly. That means that both sides can increase their competitiveness,'' says Francisco Javier Garcia Sanz, member of the board of management with responsibility for Group procurement. The suppliers can see Volkswagen's annual, monthly and weekly planning.

Process times have been decreased by up to 95 percent through the simplification of procurement procedures and the optimization of logistical processes. The investments made have already paid for themselves through the savings made in process, logistics and material costs -- and all this much earlier than expected. ``E-Business is primarily Business,'' says Dr. Jens Neumann, member of the board of management with responsibility for legal matters, treasury, organization and Group strategy, to the success of the project. ``Our strategy of concentrating on process improvements and using Internet technology as a supporting element has been successful.''

At the same time, the harmonization of file formats and processes is being pushed ahead at good speed. Garcia Sanz announced the cooperation on the harmonization of standards with SupplyOn AG, the market place of the European automobile supplier industry, at today's press conference. ``Volkswagen has, with its market place, not only reorganized its processes, but has also created the right technical requirements for an easy integration of the supplier industry. Everything indicates that we have chosen the right path,'' said Garcia Sanz.

In the long term, Volkswagen is planning to connect business processes seamlessly and to thus set up a fully integrated internal and external ``Volkswagen e-web,'' said Dr. Jens Neumann of the steps ahead. At the end, all processes from development via planning to production, from the supplier via the dealer through to the vehicle delivery, i.e. to the customer, will be integrated.

The supplier portal ``VW Group Supply.com'' was set up with IBM, ARIBA, i2-Technologies, e-breviate, Hewlett Packard, the Volkswagen subsidiary gedas and the consulting company AT Kearney.