MRO Magazine

Automakers to adopt technology standards for procurement

Detroit, MI -- Nov. 15, 2002 -- In a move that is aimed to reduce confusion and complexity for automotive parts man...


Industry

November 15, 2002
By MRO Magazine

Detroit, MI — Nov. 15, 2002 — In a move that is aimed to reduce confusion and complexity for automotive parts manufacturers worldwide, the top purchasing executives of DaimlerChrysler AG, Ford Motor Company and General Motors Corporation are pursuing three products from Covisint LLC as standards.

The three products are Covisint Auctions, Covisint AQP (Advanced Quality Planner, developed by Powerway and currently marketed as Powerway.com) and Covisint Catalog (the latter is an electronic purchasing environment for indirect and MRO materials).

“The pursuit of these products as standards provides some clear answers for the information technology (IT) executives and business leaders of the automotive industry,” said Bruce R. Swift, president and chief operating officer, Covisint. “It provides automotive parts manufacturers guidance to assist with their strategic plans for future information technology implementation.”

Now, automotive parts manufacturers will be able to simplify their overall technology expenditures and enjoy the benefits of common business processes. They will be able to eliminate redundancies and save time and money by not being burdened with the inherent inefficiency of having to support different processes for each automaker.

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“Clearly, the benefit of trying to establish technology standards for the auto industry will be to streamline how our industry operates day to day,” said Tom Sidlik, executive vice-president of Procurement and Supply for DaimlerChrysler. “By pursuing these three Covisint tools as standards, we hope to eliminate some of the cumbersome steps that are required today, especially for those with multiple customers. The results will lead to improvements in time, efficiency and cost savings.”

“We’ve taken the first step,” said Tony Brown, vice-president, Global Purchasing, Ford Motor Company. “We want to communicate to the automotive parts manufacturers worldwide that we have a clear direction in how we intend to use Covisint products to manage procurement, collaboratively develop product and simplify purchasing of indirect materials. This will help our suppliers refine their plans and eliminate unnecessary expenditures for non- standard technology.”

“The intent of the three of us supporting these three Covisint products is to provide a clear and consistent message to the supply base that we are all looking to simplify our business processes,” said Bo Andersson, vice-president, GM Worldwide Purchasing, Production Control & Logistics. “Clearly, these Covisint planning and purchasing tools can help all of us to eliminate waste and improve efficiency and should be welcomed by the entire industry as standards.”

<b>The products</b>

<i>Covisint Auctions </i>are on-line bidding events that provide rapid, real time, Web-based negotiations in a secure environment. They foster competition for the purpose of supporting the sourcing of parts and components.

<i>Covisint Advanced Quality Planner (AQP)</i> is an Internet-enabled application to manage the Advanced Product Quality Planning (APQP) process. Developed by Powerway, it provides an environment for collaboration, reporting, routing and visibility of information important to develop the highest quality standards for components being designed for vehicle production.

In other industries, Powerway markets Covisint AQP under the name Powerway.com. DaimlerChrysler, Ford and GM had indicated their agreement to standardize on Covisint Advanced Quality Planner in February 2002.

<i>Covisint Catalogs</i> are electronic purchasing environments for indirect and Maintenance, Repair and Operations (MRO) material. It allows users to shop on-line and provides a system to automate approvals and to create necessary documentation such as purchase orders. It assists decentralized organizations to better control spending across the enterprise.