As part of the agreement, supply chain software maker i2 will provide its supply chain management business software for the Net exchange project, as well as host parts of its Rhythm software suite, for users of the GM TradeXchange. Announced in November, GM TradeXchange is an e-commerce portal that the auto maker plans to use to shift $87 billion in purchases it makes each year--using CommerceOne's procurement software to shift the purchase of goods and services to the Net.
Under the i2 deal, GM has agreed to market i2's Rhythm software and services to its suppliers, with initial services to be available sometime in the second quarter. GM's move comes at a time when the big auto makers are trying to cut manufacturing costs by buying and selling goods and services from their partners and suppliers over the Web. Ford recently announced a similar exchange, to be powered by Oracle. With both GM and Fords' plans, the biggest challenge is perhaps convincing the automakers' biggest suppliers to make a commitment to using the exchanges, analysts said.
GM said it will use i2's software to make its supply chain more flexible and to speed up order-to-delivery transactions. GM now spends $86 billion annually on parts, materials and services and works with 36,000 parts suppliers.
i2's software and services help trading partners collaborate on business transactions, such as ordering headlights for vehicles or machine parts for plants. The company's supply chain market competitors include Manugistics, along with enterprise resource planning (ERP) software makers SAP and Oracle.
GM executives said today's deal is key to pushing plans for the new exchange forward.
"The agreement is another step in GM's transformation into a fast global unit that's driving electronic services and business process expertise to the GM TradeXchange," Harold Kutner, GM's vice president of worldwide purchasing, said in a statement. "Combined with CommerceOne's leadership in business-to-business e-commerce, GM intends to quickly move its global supply chain to the site."