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Private Trading Networks Defined

Private Trading Networks Defined. PTNs enable private interactions with key suppliers, distribution partners. Begin with transactions Move to online collaboration for inventory visibility, collaborative design Focus on business processes, sharing information with trading partners

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Private Trading Networks Defined

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  1. Private Trading Networks Defined • PTNs enable private interactions with key suppliers, distribution partners. • Begin with transactions • Move to online collaboration for inventory visibility, collaborative design • Focus on business processes, sharing information with trading partners • Aim for direct goods, not MRO

  2. Enterprises with PTNs Are Still on the Leading Edge of Technology Direct procurement Public net markets/ISMs E-procurement software Private trading network None of the above Percentage Adopted by Enterprises Source: Jupiter/ERI Executive Survey (3/01), n=403 (US Only)

  3. Collaboration Key Objective for PTNs within the Next 12 Months Supply-chain visibility Collaboration CPFR Commodities procurement Procurement Transportation management Logistics International logistics Procurement management Product design Percentage Expecting to Add Features Source: Jupiter/ERI Executive Survey (3/01), n=390 (US Only)

  4. Companies Pursue Closer Partner Relations with Supply-Side PTNs Closer supplier relationships Closer channel partner relationships Faster time to market Process cost savings Reduction in inventory Value Propositions Risk management Analytics Higher quality products Increased market share Lower product costs Percentage Cited for PTNs Source: Jupiter/ERI Executive Survey (3/01), n=59 (US Only)

  5. PTNs Driven by Multiple Factors • Power Tools for Centralized Purchasing • Just-In-Time Manufacturing • Demand Visibility • Outsourced or Contract Manufacturing

  6. Reluctance to Share Data with Partners Slows Adoption of PTNs Sharing sensitive data w/ business partners How to leverage ERP or EDI Legacy system integration Employee adoption Barriers to PTN Use Supplier adoption Time to implement Inadequate tech vendor solutions Percentage of Potential PTN Users Source: Jupiter/ERI Executive Survey (3/01), n=382 (US Only)

  7. Short-Term ROI Proves Promising • Flextronics boosts manufacturing yield from 40% to 80%, cuts inventory 30%, reduces reporting costs 75% • GE Aircraft Enginesreduces costs per order from $80 to 50 cents. • Pargain pushes new products into volume production in 4 weeks vs. 10, engineering changes take 5 days instead of 30.

  8. Enterprise Enterprise Enterprise Supply Chain Visibility Product Design Supply Chain Visibility Supply Chain Visibility Demand Chain Visibility Demand Chain Visibility Product Design Product Design Strategic Sourcing Strategic Sourcing Strategic Sourcing Demand Chain Visibility PTNs Must Forge Complementary Links Before Start of Integration Today: Standalone PTNs Vision: Integrated PTN Next: Link Complementary PTNs pub. 4/01

  9. Buyers Can Outsource Routine Activities; Keep Sensitive Ones In-House Proprietary Joint design Demand forecasting Supply chain visibility Spot buys Contract buys Sensitivity of Data Proprietary Peril Zone Commodity trading Mega-hubs Standards creation MRO buys MRO buys Routine Outsource Safety Sector Transactional Collaborative Type of Interaction pub. 4/01

  10. Commerce Must Lead PTNs into Mature Collaboration Phase Phases of PTN Functionality pub. 4/01

  11. Thank You For more information, please contact inquiry@jup.com.

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