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To: Logain Ablar who wrote (2471)	8/26/2001 9:57:30 PM
From: John Pitera	Respond to of 2850

Hi Tim: GM does $98 billion in transactions via Covisint By EPHRAIM SCHWARTZ, INFOWORLD.COM (August 17, 2001) Covisint LLC is still in the midst of deploying all of its online business-to-business marketplace functionality, but online procurement via its quote manager for electronic RFQs appears to be gaining traction in the industry, to the tune of $96 billion for General Motors Corp. and its suppliers. Although there was no official announcement by either Covisint or GM, the giant automaker revealed at a management briefing in Traverse City, Mich., run by the Center for Automotive Research, that the total value of transactions it conducted over Covisint in the first seven months of Covisint's operation totaled $98.2 billion. Of the total, $96 billion was done through Covisint's quote manager, which is used for procurement of direct materials (rather than maintenance, repair and operations products), said David Barnas, a GM spokesman. He added that the spending represents contracts going out over the next six years. Despite the huge amount, GM's benefits come not from finding new suppliers or reducing the piece price of any products, but from the time it took to close the deals. Although GM offered no time frame, a Covisint spokesman said one large OEM, which he declined to name, accomplished in two days what otherwise would take 10 months for certain business processes. "When you can take almost 10 months out of a process, you are bringing significant savings to you and the other suppliers," said Dan Jankowski, vice president of global communications at Covisint. The breakdown for the remainder of the $98.2 billion spend via Covisint was $200 million through catalog buying of indirect goods and $2 billion through online auctions, where GM sold back into the market materials it no longer needs. GM's annual spending on direct materials is about $86 billion. The $96 billion done in the first seven months of Covisint's existence represents the final sourcing decisions for systems and components for vehicles through the 2006 model year, Barnas said. GM and the other automakers are trying to reduce time to market through online procurement as well as using design collaboration to take time out of the process. "We are looking at ways to develop our systems faster and give suppliers requirements they need to produce parts, which they in turn can relay to their suppliers all the way down the chain. And that is where the real benefit is," Barnas said. Using Covisint for design collaboration, considered by most industry analysts to be one of the best ways to reduce time to market, is still to be determined, said Barnas. "We know we want to do that, but we haven't started that. The entire industry recognizes the need to do design collaboration, either through Covisint or on their own," Barnas said. Related stories: Covisint Focuses on Tech Integration, July 2, 2001 Covisint Technology Partners Sign Equity Agreements, Jan. 1, 2001 Key auto supplier agrees to join Covisint exchange, Sept. 15, 2000 computerworld.com