Private Exchanges Going Mainstream In Europe

Compiled ByDeborah Austin Disappointed in business process networks (BPNs) such as public and consortium-sponsored electronic marketplaces, major European firms now are building private exchanges for system-to-system connection with most-trusted business partners. So suggests "Best Practices in Private Exchange Implementations in Europe," a best-practice case-study report analyzing 20-plus implementations deemed most-significant by market analysis company Aberdeen Group, Boston. Private exchanges differ from other BPNs -- managing deep relationships between business units and trading partners, versus focusing on buying/selling -- says Aberdeen. While public BPMs have succeeded at indirect materials procurement, order settlement and payment, private marketplaces excel in direct procurement, fulfillment/logistics, product development and customer service -- mostly due to deeper integration levels. Takeup has flourished around highly engineered or market-volatile products requiring extensive supply-chain collaboration, including automotive-related, electronic/electrical, and aerospace/defense manufacturing.