STRASBOURG, France - Volkswagen AG has identified 180 product categories suitable for online auctions.
VW's e-marketplace will reduce material costs, but that is not the primary focus of the initiative, said Jens Neumann, a member of the Volkswagen AG board of management. Its three main functions are online auctions, catalog purchasing and capacity management.
VW has conducted 70 online auctions and expects to complete more than 100 by the end of this month.
'We will have completed the full rollout - including training of all purchase people involved - by the middle of next year,' Neumann said.
The automaker will not go online for specific parts that will alert the competition to VW's future plans, Neumann said.
'I would say there are more parts suitable for auctions or for online buying than we had initially thought,' Neumann said. But VW will continue to purchase sensitive parts from a handful of selected and accredited suppliers to cut the risk of disseminating secrets, he said.
'It is clear that any specific part design which gives you the competitive edge would be difficult to describe to a multiple of suppliers,' Neumann said. 'We would not go online with specific parts which would tell the competition what we will be doing two or three years from now.'
VW shunned overtures from the Covisint trade exchange and instead built its own e-marketplace to communicate and do business with its suppliers worldwide.
Its exchange went live in September, about a month before Covisint began. Covisint was conceived and developed by Ford Motor Co., General Motors and DaimlerChrysler, and was joined later by Renault SA and Nissan Motor Co.
Neumann said that joining Covisint would not have been consistent with the VW way, a path it has been pursuing since 1993.
'In particular, we would probably have lost precious time to implement our specific process-improvement program,' Neumann said here Friday, Dec. 1 during the Automotive News Europe e-Business Conference. 'We firmly believe in one thing - the gold is in the process - and we want to dig for gold in our own back yard with our own tools, doing it our own way.'
The most difficult marketplace tool - but also the most promising - is capacity management, he said. VW will exchange demand and capacity data with its suppliers via the marketplace on a rolling 26-week schedule and plans to expand the time horizon up to 24 months.
'This will give us ample time to define work flows and utilize capacity much better than to date,' Neumann said.
The exchange was developed with the help of i2 Technologies Inc., Ariba and IBM.