Discover All That's Possible - Supply-Chain Management - Annual Report 2000

Supply Chain Management
The most expensive box of anything...
In today's economy, implementing a "virtual" supply-chain system is a vital element of success. From aerospace and automotive to construction and manufacturing organizations, companies worldwide are taking advantage of the Internet to create electronic marketplaces where customers, suppliers, and business partners collaborate with real-time results.

Honeywell International, one of the world's most successful and established manufacturing companies, is reshaping itself in the Internet economy. Honeywell's management vowed to increase its use of the Internet to expand its business. In July 1999, it launched, a business-to-business Web site that connects customers and suppliers in the manufacturing industry. At the site, large and small companies from around the world share procurement and manufacturing strategies, download software, and participate in valuable industry discussions. The site has huge potential for Honeywell since it caters to virtually any industry that manufactures goods in a factory.
Inside Cisco... When was first launched, the site offered only Honeywell software products. Now 400 software suppliers provide 650 manufacturing applications on the site for a small transaction fee. In the past, solving a recurring manufacturing problem could take days or weeks. With, users take matters into their own hands in real time. The practice is revolutionary, saving companies time, money, and risk. Recently, hosted 60,000 user sessions, and the company estimates that one-third of the site's users are new Honeywell customers.

The advantage of creating a single electronic marketplace is that everyone emerges a winner. For example, two rival companies that both build engines, but don't make the same replacement parts, can ultimately share resources. Collaborating over the Internet also results in economies of scale. In the next year, Honeywell plans to implement, a joint venture with United Technologies and I2, to focus on supply-chain management for the aerospace industry, and for the facilities management industry. Both sites will match customers and suppliers, providing instant results with improved inventory turns, corrected purchasing inefficiencies, and reduced overhead. It is exactly what customers and companies need in today's fast-paced economy.

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