DaimlerChrysler Saves Through Online Bids for Part Supplies

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Online bidding is working for troubled automaker DaimlerChrysler.


Thirty online auctions conducted by the German-run company for procuring more than 500 parts helped to save 17 percent on the cost of production and non-production goods and services in the past seven months, a company statement said yesterday.


"The Internet will raise the response capability of the entire supply chain enormously," Gary C. Valade, executive vice president of global procurement and supply at DaimlerChrysler, said in the statement.


"Clearly, e-business signals the end of sequential communications," Valade said. "These pilot applications have shown that changes in production program information can be made available to all companies in the supply chain simultaneously. This gives us a tremendous cost advantage."


Vendors bid to supply parts that are used in cars produced by DaimlerChrysler. The highest bid wins the contract.


Covisint, an online trade exchange that DaimlerChrysler owns with other automakers, played a key role in the company's e-business strategy.


The auctions were held in DaimlerChrysler's world headquarters in Stuttgart, Germany, and its domestic head office in Auburn Hills, MI.


Vehicle production materials up for bidding at the online auctions included batteries, stampings, water shields and fasteners, as well as non-production items such as racks and assembly plant maintenance tools and equipment.


"Processes are now being put in place for a rapid start-up phase in 2001 that should enable us to achieve approximately 100,000 transactions during the calendar year," Valade said in the statement. "Covisint has been, and will continue to be, a good enabler to help us reach our e-business goals next year."
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