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Retailers are moving rapidly to 100% web-based supply chains, says GXS
Retailers want to deal with all their suppliers via the web because separate procurement systems are inefficient and undercut their ability to achieve economies of scale, Harvey Seegers, CEO of GE Global eXchange, says.
The old 80-20 rule no longer applies in retailers’ supply chain initiatives, Harvey Seegers, president and CEO of GE Global eXchange Services, tells Internet Retailer. “Retailers used to think that if they could get 20% of their suppliers who provided 80% of their goods to go to EC-based supply chain, they’d be doing all right,” Seegers says. “But now they’re moving to 100% supplier enablement and it’s largely because of the Internet.”
Retailers want to deal with all their suppliers via the web because maintaining separate procurement systems is inefficient and undercuts their ability to achieve economies of scale, Seegers says. Suppliers’ resistance to an electronic supply chain process is evaporating because standardized web-based systems are easy for small and mid-sized suppliers to use, he says. While EDI-based, private-network systems used to take weeks to implement, web-based systems can be up in almost no time, Seegers says. “Now we tell them the URL to send the file to, there’s no software to install and no systems integration,” he says.
GE Global eXchange has more than 100,000 trading partners in major industries including retail, consumer goods, food and beverage, automotive, manufacturing and transportation. It recently signed deals with Rite-Aid Corp. drugstore chain and J.C. Penney Corp. Inc.
Seegers says the retail industry has proven the most receptive to web-based supply chain initiatives. “Retailers are so competitive and their margins are so thin that they always try to think out of the box in reducing their costs,” he says.