The e-Marketplace Frenzy
1 comment September 18th, 2006 David Bush - Iasta
As a follow up to last Thursday’s post on MRO Spend Management, I’d like to point out a recent Supply & Demand Chain Executive article that points out MFG.com’s acquisition of SourcingParts.com that effectively Creates the Largest Online Marketplace for the Manufacturing Industry. The deal creates a single global marketplace through which over $5B worth of manufacturing services was sourced in the last 12 months.
According to MFG.com’s statement, “The combined companies bring together buyers and suppliers from around the world in an online environment that leverages the collective intelligence of the community to bring products to market faster, less expensively and more intelligently.” Although it is true that volume and economies of scale will provide benefits to you, the user, I’d like to point out that marketplace buys generally do not qualify as strategic sourcing and that the results you can expect are probably no better than what you’d get through a properly run reverse auction.
Significant, sustained, sourcing results depend on a proper process and proper eSourcing technology to manage that process. That being said, a marketplace that includes an automated supplier discovery engine that matches the attributes of a buyer’s RFQ to “ideal” suppliers using a community rating system that rewards those who are good citizens and exposes those who are not has a lot of value, and the use of such a site in conjunction with an eSourcing project and eSourcing suite that would let you manage the RFX and bidding process internally, so that you could apply decision optimization and total value management to the award decision, could be very beneficial.
I’ll be interested to see how the acquisition and new solution plays out for them over the coming year, especially since many marketplace efforts started during the dot com boom have met with limited success. Mfg.com seems to part of a new breed that is trying and succeeding on this model.
Entry Filed under: General, Supply Management Best Practices, Technology, e-RFx, e-Sourcing Marketplace
