VW sees clear road to B2B

Volkswagen Group said its online business-to-business marketplace is on course to handle virtually all of its £31bn annual procurement volume.

And in a vote of confidence for internet-based B2B trading, the German automotive manufacturer also claimed that VW Group Supply.com, its group-wide portal, had already paid for itself thanks to process improvements of up to 95%.

VW said that the key components of the supplier marketplace were now in place for its eight vehicle brands – VW, Audi, Skoda, Bentley, Seat, Lamborghini, Bugatti and Volkswagen Commercial.

These elements include online catalogue purchasing, auctions and capacity management, as well as details of procurement, logistics and quality standards for all eight brands and the group’s three operating regions.

Six thousand of the company’s employees are now able to order 360,000 different items directly from their supplier via the catalogue purchasing element of VW Group Supply.com.

E-Cap, the capacity management system that allows suppliers to see VW’s annual, monthly and weekly planning information, is also widely used.

Francisco Garcia Sanz, head of group procurement, said that E-Cap had brought significantly lower transportation and storage costs for everyone. ‘Our suppliers can plan for the longer term, react more quickly and communicate with us more clearly,’ Garcia Sanz said.

Reductions in procurement and logistics process time of up to 95% because of simplified procedures meant the internet platform had paid for itself ‘much earlier than expected’, he added.

The company expects almost all its group-wide e50bn annual procurement spend to be managed via the marketplace within the foreseeable future.

VW has shunned consortium B2B ventures such as Covisint, preferring to push on rapidly with its own private e-trading relationships with suppliers. The manufacturer formed technology partnerships with IT specialists including IBM, HP and i2 to create the portal.

‘Everything indicates that we have chosen the right path,’ Garcia Sanz claimed.

As a next step the company plans to co-operate with European supplier marketplace SupplyOn to create unified technical standards and processes.

In the longer term, VW Group Supply will form part of an extended ‘Volkswagen E-web’ connecting its supply chain and manufacturing operations with dealers and customers.

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