Building A Full-Bodied Exchange

Since online exchanges have discovered that important value-adds include dynamic pricing and online negotiations, one wine exchange's multiple auction formats supplement or replace long-term contracts with a forward market.


The wine industry has zero tolerance for mistakes; grapes are perishable and wine has to be bottled on time. Supplier relationships often trump price and will provide much of the knowledge that will fuel the auctions and the subsequent contract negotiations. Fortunately, collaboration technologies, online contract negotiation and management among them, may outlive their hype and prove to be the killer apps that will help growers, wineries and distributors identify and remedy mistakes quickly, if not head them off completely. Companies are advised to be wary of B2C solutions that masquerade as brilliant B2B technologies. However, many of the strides made by consumer dot-coms in developing better back-end information and communications technologies are just what B2B companies need. For example, ZuluNet, a B2B transportation exchange, has incorporated instant messaging into the ZuluForum, a chat room buyers and suppliers can enter to work out contract details. DiCarta's software facilitates threaded negotiations that allow suppliers to amend contracts and buyers to track changes in real time. One of the next steps in improving collaborative processes is to add better video conferencing capability to both B2B e-commerce software and Net market platforms.


Cheng's transition from re-engineering HP's supply chain to herding wineries to the Net has been eye-opening. What I've found personally satisfying is that wineries are very open to new ways of thinking about improving the supply chain and new ways to work. The challenge is that they're not easily won over. What will it take? The delicate act of balancing technology, close business and family ties; the changing role of the middleman; and the dynamics of one segment of an industry that's poised for dramatic change.


Stephanie Lara is a freelance writer based in Washington D.C.
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