With the introduction of a new online purchasing Web, Dana Corp. said it will cut $1 billion in costs across its far-flung operations in the next four years.
Dana, with 330 facilities in 32 countries, does not have a centralized purchasing system. The company said moving $8 billion in annual purchases to the Web will cut transaction costs, reduce inventories and speed the entire process. Dana also wants to slash the number of its own suppliers by half in the same period.
'This allows all the independent businesses and operations to have a meeting place to collectively purchase,' said spokesman Gary Corrigan. 'This is a strategic sourcing opportunity.'
But isn't that what automakers also want with their new electronic procurement ventures? General Motors and Ford Motor Co. have announced plans to put their entire purchasing systems online in the next few years. And they are urging suppliers to participate.
Corrigan said Dana's purchasing Web would complement the automaker sites. Dana also will use its purchasing Web to manage some of its unique suppliers, he said.
The system will be introduced this year, Dana said. Its partners in building the site are Ariba Inc. and Aspect Development Inc., both of Mountain View, Calif.