Making a Match

Engineering companies of all sizes are turning to the Internet to find parts suppliers, shaving sales and procurement costs in the process. Companies seeking parts suppliers can post requests for proposals on a Web site. The automakers chose to work together after General Motors and Ford announced on the same day in November 1999 that they planned to launch their own proprietary business-to-business exchanges to host supplier auctions. As evidence of the trend toward moving the vendor and supplier relationship from fax machine to Internet, big three automakers—DaimlerChrysler, Ford, and General Motors—banded together in February to create a Web-based marketplace called Covisint, where suppliers bid for the automakers’ parts contracts. Renault and Nissan signed on later and the site was unveiled in October. With the system, one of the automakers will be able to post data for a part it wants made for a car. However, without technology-equipped suppliers willing to use the service, Covisint could experience a dearth of business.