China syndrome marches on B2B web gateways

Manufacturers outsourcing production or seeking to penetrate Far Eastern and Asian markets are increasingly turning to web exchange providers to set up their IT and business infrastructure. Recent major announcements include Dongfeng Peugeot Citroen and also China Entercom, both in the automotive sector and both developed with GXS B2B e-business gateway technology. Steve Keifer, GXS vice president of industry and product marketing, says uptake of web-based supplier and partner networks on this scale is increasing again, with growth rates around 5—10% per annum. “Companies are looking at ways to become more competitive, and one of the ways is to manage their supply chains more effectively using B2B e-commerce as the platform for invoices, schedule releases, despatch notes and so on between, say, China and Europe,” he says. He sees GXS’ involvement in this area as stemming not only from its suite of technologies, which has been around for some time, but its presence in Asia and China. “We can be the information broker behind the participants’ firewall, providing a global network for transactions for partners and taking responsibility for connecting their SME trading partners,” says Keifer. Specifically on China, he makes the point that the vast majority of local organisations are SMEs and that setting up requires knowledge of these, pre-qualification and workable connection. Says Keifer: “The Chinese government is concerned about competitiveness – about state and private enterprises competing with Japan, the US etc. So it’s looking to best practices, including supply chain business practices, to see how to encourage more of its companies to compete better with other countries. So there is funding to accelerate this.” China Entercom is one such company accredited to provide VPNs (virtual private networks), call centre services and the like, and now providing a web exchange for the automotive market for dealers, logistics providers and suppliers to do business electronically using 10 different standards. “That’s what’s been developed on GXS technology. It’s the first system to be developed with funding from the Chinese government. Our technology provided 80% of what they needed and in 90 days they were up and running. They chose GXS because we have interfaces in Chinese and we’re not over-engineered. They wanted a unique platform that didn’t force them into an all-Western model – just the best practices.” But for manufacturers considering outsourcing to the Far East, Keifer says GXS has other useful services. “We do all the technologies but we also provide the community links. We go out and pick an inventory of suppliers and talk to them about the system, educate them and offer them choices. We do that on behalf of our clients.” So far he claims 6,000 UK customers and 40,000 SMEs on GXS e-business infrastructure around the world. “We focus on the channel masters at larger than 100m euros, although we won’t turn away companies with revenues of 50m euros. “Price points for connection then range from 20 euro per month up to hundreds or thousands depending on volume. They can pay a flat fee per month for unlimited use, or go for a utility model. Set up changes would be 20k euro in software licences, and then customisation on top.” And the benefits, even for those not embarking on china? “If they have no e-commerce, we can save them 20—30% off admin costs around procurement, invoicing etc, and provide tracking stats on the receiving side. We can also automate receipt with barcode and RFID technologies and ASNs [advance shipping notes] to schedule their machines and workforce. We can also provide a portal for suppliers looking to get paid to see the status – so there are less clerks receiving payment queries.”