But despite their own enormity, in the highly fragmented, $33 billion European market for "white goods" -- home appliances of all sorts -- these five manufacturers had to deal with literally tens of thousands of smaller chains and individual retailers. "In Europe, we have 100,000 retailers, and even the top 20 retailers represent less than 40 percent of the market," explained the e-business leader at one of the five companies.
This fragmentation presented a major challenge for each of the manufacturers as they set about their sell-side e-business initiatives: how to link with their thousands of retail customers in a way that would be affordable not only for themselves but also for the retailers, many of which were mom-and-pop operations with just a few outlets.
Thus was born the idea for Tradeplace, a joint service venture formed in 2001 initially by three of the manufacturers -- BSH, Electrolux Home Product and Whirlpool Europe -- and later joined by Merloni (in May 2002) and Philips (September 2002).
One aim of the initiative was to create an umbrella for the companies' existing portals that, at first, would provide retailers with a single point of entry, accessed through a Web browser, to the manufacturers' systems. The retailers could then search for product information and availability and place orders with any of the manufacturers without having to log into different systems. In addition, the ultimate goal of Tradeplace was the standardization of XML message types, which enables both sides of the supply chain to reduce the upfront investment to a minimum.
The vision then called for moving the retailers to system-to-system integration through the Tradeplace Message Hub, set up with technology and services from Seattle-based integration solution provider Hubspan, to communicate electronically with the manufacturers. In this second phase, the hub would receive messages and requests from one partner, reformat and translate the data as necessary, depending on the intended destination, and then send the data to the appropriate addressee. Theoretically, the hub would be able to handle data formats ranging from traditional electronic data interchange (EDI) to the latest XML, or even data from Web forms for retailers with just a PC and Internet access.
The attraction of this ultimate vision was that all the participants would be able to use their existing information technology infrastructure to communicate with the hub, eliminating the need for investments in costly point-to-point integration with multiple partners while providing convenient access for the retailers to all the manufacturers through one portal.
Since its launch in seven European countries in 2001, more than 8,000 users have registered with Tradeplace to use the browser-based solution, and the hub, which is available in multiple languages and has expanded to encompass retailers in 14 countries. At present, four large trading partners have established system-to-system connections with the hub via XML, with about 20 more in development.
Each of the following supply and demand chain leaders played a major role in envisioning and creating Tradeplace. They realized that, as much as competition is healthy for a business to keep current and innovative, providing the best possible service to your customers is even more so. One member of the team summed up their collaborative strategic initiative by saying: "We have an obligation to our trading partners to assure rapid and easy access to information."
Frederic Marie, e-Business Director, Electrolux Home, Products Europe
Gustavo Minacci, Director, Strategy Deployment & Innovation, Whirlpool Europe
Michael Steinborn, Corporate Head of CRM and e-Commerce, BSH Bosch and Siemens Hausgerate GmbH
Karel van der Horst, CRM & e-Business Director, Philips Consumer Electronics
Mauro Viacava, Chief Information Officer, Merloni Elettrodomestici
Read more about the Tradeplace team and their accomplishments in the article "From Competition to Consensus," in the August/September 2003 issue of Supply & Demand Chain Executive magazine.
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