High-Tech Industry Leaders Announce Open Internet Exchange For Computer And Electronics Marketplace
May 1, 2000 13:21 PM
New York -- AMD, Compaq, Gateway, Hitachi, HP, Infineon, NEC, Quantum, Samsung, SCI Systems, Solectron, Western Digital to form independent company for high-tech supply chain, increasing business efficiency and customer value
Twelve high-tech industry leaders today announced their intent to launch an independent company that will operate an open Internet exchange to serve the needs of the high-tech supply-chain community.
The new venture will provide services to buyers and sellers involved in computing and electronics-related industries. The exchange is expected to enable these businesses to manage their supply chains more efficiently and effectively, improve delivery of products and services to the marketplace, and increase customer satisfaction.
An estimated $600 billion* in online business-to-business sales of high-tech components and parts will occur over the next few years, making this the world's largest e-marketplace opportunity. The founding companies are some of the world's largest buyers and suppliers of computer and electronics components and products and have developed considerable expertise in efficient procurement and sales.
The exchange's end-to-end services will be open and available to all parties in the supply-chain process -- consumer and business electronics makers, contract manufacturers, suppliers, and distributors. All participants in this electronic marketplace will be able to manage a wide array of their e-procurement purchases and sales through this new exchange.
"The creation of such an exchange can improve supply-chain efficiency tremendously through cost reduction, timely transactions, inventory savings, and higher-value services," said Dr. Hau Lee, professor of Operations, Information and Technology, Stanford Business School. "But most importantly, it will enable supply-chain partners to fundamentally redesign their business processes and create new business opportunities from end to end. This is a major step toward a virtual economy for the high-tech industry."
In addition to delivering the traditional benefits of the Web, such as continuous global reach and open industry-standard interfaces, the new high-tech exchange is expected to:
• lower manufacturing and purchasing transaction costs through process efficiencies;
• reduce levels of inventory throughout the entire supply chain by better matching supply and demand via the online marketplace;
• increase customer satisfaction by improving the ability to deliver products more quickly and predictably;
• provide expertise on supply chain "best practices" to help participants achieve better results from product design to customer delivery.
The exchange is expected to begin operations within 90 days. The founders plan to contribute resources and an initial total of $100 million to the new company and will have equal ownership in it. They intend to use the exchange for their own supply-chain activities, driving significant transaction volumes through it.
A full-time interim management team, comprised of representatives from the founders, has been chartered to finalize the formation of the new company and launch the business. More details on the exchange are available at www.ehitex.com. Other companies interested in becoming founders should contact Keith Melbourne of HP, (408) 447-4275, or Wendy Caswell of Compaq, (281) 518-2918, by May 15, 2000.
* Data point from "eMarketplaces Boost B2B Trade," Forrester Research, Inc. Feb. 2000
This press release contains statements that are forward-looking. These statements are based on current expectations as of the date of release.