The company strikes separate deals with DaimlerChrysler, Toyota and Volkswagen to help develop the automakers' private Net marketplaces.
The company today struck separate deals with DaimlerChrysler, Toyota and Volkswagen to help develop the automakers' private Net marketplaces.
i2 said it will help build private exchanges for each of the carmakers in an effort to improve their existing internal purchasing processes by moving to Net-based systems.
Software makers Oracle and Commerce One are working on Covisint, the closely watched automotive Internet exchange being formed by DaimlerChrysler, Ford Motor, General Motors, Renault and Nissan Motor.
Covisint, for one, has faced a number of hurdles on the road to beginning operations, including awaiting approval from federal regulators. Regulators say they fear that major auto manufacturers will use the exchange to dictate which pricing models and purchasing practices suppliers must use.
Covisint, which originally planned to be operational by June, is now gearing up for a fall launch. Still, regulatory concerns and personnel shifts have slowed the company's plans. Last month, the Federal Trade Commission requested more information from the automakers backing the exchange. And Alan Turfe, one of three original co-chief executives of Covisint, recently left to become president and chief executive of MetalSpectrum, a metals industry exchange.
AMR Research analyst Mike Burkett said most auto manufacturers are beginning to realize that the development of larger industry exchanges, such as Covisint, is taking longer than they had anticipated. In response, he said, the market will see more private exchanges being created to take immediate advantage of online networking and collaborating with their own set of suppliers and partners.
The market saw a number of public exchanges come out in an effort to get "volume discounts on commodity items that are typically shared between OEMs (original equipment manufacturers) such as maintenance supplies and office supplies," Burkett said.
"But, if you're DaimlerChrysler buying body components that are unique to Chrysler and you have a specific supplier that supplies you that (item), you can handle that transaction via a private exchange," he added.
i2's software helps trading partners collaborate on transactions such as ordering headlights for vehicles or machine parts for plants. The company's supply-chain market competitors include Manugistics and giants SAP, Oracle and PeopleSoft. Like many other software makers, i2 has been focusing on the business-to-business industry, aiming to capture more lucrative and complex online marketplace deals.
In the past few months, a number of online marketplaces have popped up to help businesses streamline their purchasing costs and improve the way they conduct business with their suppliers and partners. The most popular type of online marketplace has been initiated by groups of companies that target one industry, such as automotive, pharmaceuticals, oil and gas, retail and food.
Burkett said although he expects more and more companies to turn to private exchanges, they will still participate in public industry exchanges once they become operational. The trend to set up private exchanges, for those companies who have not already, will be evident in other industries as well, not just the auto industry.
Public industry exchanges are just "taking an awful long time to get off the ground," he said. Participants "will find they can't wait for public exchanges to take care of all their needs so they are going out to form private exchanges."
As part of today's agreement, i2 said it will work with DaimlerChrysler North America on developing the first phase of its new FastCar program, which was unveiled earlier this month. The automaker plans to reduce costs in the development of new cars by connecting its internal design, engineering, manufacturing, procurement and other related processes over the Web.
Toyota said it signed a contract to use i2's software to manage its accessories and replacement parts business. i2's flagship TradeMatrix software will help manage inventory and promise accurate delivery dates for all Toyota parts, providing inventory support for 1,500 North American Toyota and Lexus dealers.
With Volkswagen, i2 said it will help build the carmaker's online marketplace through i2's alliance with software maker Ariba and computing giant IBM. The three technology providers have already begun working on the Volkswagen project, which includes collaborative planning with the automaker's suppliers and online auctions.