Supply chain collaboration is the key to B2B says Oracle

Struggling B2B marketplaces don't mean the death of B2B, according to Oracle, it latest product offerings show a new focus, on collaboration in the supply chain.

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By  Mark Sutton Published  January 22, 2001

Oracle is shifting the focus of its B2B offerings towards collaboration, due to the lack of success that has been experienced by online marketplaces so far. The software giant’s latest offerings, a triple bill that Oracle says is its most important B2B release to date, are intended to improve efficiency in the supply chain.

The message from Oracle is clear – B2B needs to change focus from purely buying and selling and concentrate on partners and suppliers. “In the B2B market over the last 12 months, what we are starting to see, is a number of the initial marketplaces have run into big problems,” said Jeremy Burton, senior VP of marketing at Oracle. “Also, if you look at the pure B2B software providers such as Ariba and Commerce One they have really started to struggle of late. There are certainly big questions asked of the b2b market as a whole. In November 1999, when we made our first B2B announcement [for Autoexchange], we said then that B2B was not strictly about market places and buying and selling but really covers procurement, through to product development through to logistics through to supply chain.”

Burton said that many of the initial B2B marketplaces have been focussed on purchasing of ‘indirect’ business materials such as stationary and office furniture, but have not offered the primary requirements of the business – the direct materials. The supply of direct materials is inherently more inefficient than indirect materials, according to Burton, as they require advance planning of purchasing, which in turn leads to more inventory having to be held in the supply chain. “The inventory that is held in the supply chain is pretty much inversely proportional to the amount of information that you have – the less information that you have the more inventory you have to hold, suppliers way down the supply chain at the third or fourth tier are hugely inefficient,” he said.

The new products that Oracle has released aim to address these inefficiencies at various points of the chain. Oracle Supply Chain Exchange allows collaboration with partners over a range of enterprise systems, providing visibility and synchronisation across the whole supply chain. Automated performance tracking functions are included to allow constant monitoring and improvement of processes. Oracle Transportation Exchange creates a marketplace for logistics provisioning, and can be linked to Supply Chain Exchange to co-ordinate transportation capacity with supply chain demands; and Oracle Product Development Exchange allows companies to collaborate on product development over the Internet.

All of the offerings use XML for flexible integration, and link into Oracle Exchange Suite. Supply Chain Exchange and Product Development Exchange are available now; Transportation Exchange is expected to be ready by June.

“What we have here, and with integration with our partner software, is something that takes Oracle Exchange from a transactional platform to a hosted Internet community,” said Burton. “These three products, along with our technology platform, form the Oracle e-hub, a collaborative e-business hub which allows you to publish information out of your business, onto the Internet so that your suppliers and partners can access it and make your business process much more efficient that it was before.”

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