ArvinMeritor Inc. uses online reverse auctions - where the lowest price can win the bid - to purchase injection-molded parts, steel tubing and fasteners.
To sell plant equipment, the Tier 1 supplier uses forward auctions to get the highest prices.
The Troy, Mich., company is a prime example of how suppliers increasingly are using the Internet to buy and sell components, equipment and office supplies to trim costs and cut purchasing time.
An Original Equipment Suppliers Association survey found large companies such as ArvinMeritor lead the way, but 50 percent of suppliers are engaged in e-procurement.
The survey focused on indirect materials such as office supplies and goods other than production-ready components.
It found that 45 percent of the respondents already are using Web auctions.
Some companies are going forward based on intuition rather than on proven return on investment.
When asked why they have not selected an e-procurement tool, 58 percent said they need to define e-procurement goals.
Another 27 percent said they were waiting for Covisint, the Big 3's online trade exchange, to become fully operational.
'I think the challenge Covisint has right now is to be cost competitive and functionally competitive with some of the other services out there,' said Bob Brennan, ArvinMeritor vice president of information technology for commercial vehicle systems.
ArvinMeritor, which has done several pilot auctions through Covisint, has conducted regular Web auctions through FreeMarkets Inc. and with a desktop e-procurement program.
In a current pilot, ArvinMeritor cut the administrative cost of a purchase order from $90 to $5, and per-order time from 182 minutes to 22 minutes.