An exchange is born

By Staff -- Purchasing, 6/15/2000

Twelve major electronics companies say they will form a company to operate an exchange to serve the needs of the high-technology supply chain.

The new venture will provide services to buyers and sellers involved in computing and electronics-related industries. The exchange is expected to enable these businesses to manage their supply chains more efficiently and effectively, improve delivery of products and services to the marketplace, and increase customer satisfaction.

An estimated $600 billion in online business-to-business sales of high-tech components and parts will occur over the next few years, according to Forrester Research.

The founding companies are some of the largest buyers and suppliers of computer and electronics components including Compaq Computer, Hitachi, Gateway, Infineon, Hewlett-Packard and AMD.

The exchange's end-to-end services will be open and available to all parties in the supply-chain process-consumer and business electronics makers, contract manufacturers, suppliers and distributors. All participants in this electronic marketplace will be able to manage a wide array of their e-procurement purchases and sales through this new exchange.

The exchange is expected to lower manufacturing and purchasing transaction costs through process efficiencies, reduce inventory by better matching supply and demand via the online marketplace, and provide expertise on supply-chain "best practices" to help participants achieve better results from product design to customer delivery.

The exchange is expected to begin operations within 60 days. The founders plan to contribute resources and an initial total of $100 million to the new company and will have equal ownership in it.