TRANSORA STARTS TESTS OF B2B RETAIL SERVICES

LOS ANGELES -- Transora, the Chicago-based business-to-business exchange, has launched a series of retail service tests involving consumer packaged goods manufacturers and retailers in the Global Net Exchange, Judy Sprieser, Transora chief executive officer, told SN here.The initial retail tests involve implementation of promotions management and on-line order management, Sprieser said in an interview

LOS ANGELES -- Transora, the Chicago-based business-to-business exchange, has launched a series of retail service tests involving consumer packaged goods manufacturers and retailers in the Global Net Exchange, Judy Sprieser, Transora chief executive officer, told SN here.

The initial retail tests involve implementation of promotions management and on-line order management, Sprieser said in an interview following a symposium Transora hosted here -- an event repeated in other cities in the United States, Europe and South America.

Transora is a B2B marketplace whose participants encompass 54 of the world's largest CPG companies. Sprieser said the exchange is conducting 34 pilot tests involving manufacturers and participants in a number of other B2B exchanges.

In addition to the retail services tests, Sprieser said Transora-sponsored pilot projects in the next few months will include the following:

A rollout of financial services, once Transora selects a financial institution partner -- a decision she said is expected to be completed this month. The financial services offering should be available on a pilot basis before the end of the year, she noted.

An anticipated alliance with logistics providers aimed at finding ways to optimize cube utilization in truck shipments.

The introduction of consumer services, beginning with e-couponing and expanding beyond that, possibly into the area of direct consumer research and the ability to track performance on new products and promotions. Sprieser said the first consumer services pilot will probably begin in mid-2001, "though we could roll out the e-couponing earlier," she noted.

She said Transora is also continuing to test procurement programs, including auctions between CPG companies and their suppliers.

Asked about potential savings resulting from participation in B2B enterprises, Sprieser said Transora is just beginning to build business cases for each of the services it offers. "But based on early projections, we believe a $5 billion CPG company that implements an item catalog, promotions management and on-line order management can save $200 million a year," she said.

A prerequisite for any testing is for manufacturers to digitize their product lists, "which will be the foundation for a lot of retail services," Sprieser noted.

Most major manufacturers have already digitized their item catalogs, she said, "but the data is in thousands of locations. However, through Transora's partnership with UCCNet -- which defines product standards in digital form -- manufacturers are providing upfeeds of their complete catalogs to Transora.

"Once those catalogs become available, retailers can execute purchase orders through Transora with the goal of significantly reducing the number of errors and misunderstandings."

According to Sprieser, the on-line promotions element in the Transora-GNX tests will enable buyers and sellers to link up and communicate on promotional programs. "We have a format that establishes a system of record for promotions, with an automatic link to the item catalog and the order management tool," she explained.

To determine the participants in the retail services pilots, she said Transora worked with manufacturers and GNX members to match up what each wanted to test.

The tests involve GNX retailers rather than those in the World Wide Retail Exchange, Sprieser explained, "because the GNX management team is more settled, whereas the WWRE management team has not been in place long enough for us to engage in similar dealings with them."

Although Transora's initial retail tests are being conducted with larger retailers, the processes can work for smaller operators as well, she pointed out.

"Some on-line order management pilots will involve a browser-based on-line ordering capability suitable for small retailers, including mom-and-pop stores, convenience stores and food service operators. We're testing those pilots outside the U.S. in countries where there are large numbers of small retailers."

Asked about the skepticism from some industry players about B2B exchanges, Sprieser said, "It's a healthy skepticism. Most companies are pretty much past the euphoria stage and becoming more introspective about what their strategies will be regarding B2B."

For smaller companies, "some are hoping it will go away while others are truly excited because they see that the Internet can level the playing field and give them access to channels that were not open to them before," she said.

In her formal presentation at the symposium, Sprieser defined Transora as "a gateway to other exchanges -- a one-stop shopping location for linkages to B2B exchanges on the Internet" that connects CPG companies to each other and to other supplier exchanges, retailers, retailer exchanges, private exchanges, and horizontal and vertical exchanges.

Although hundreds of B2B exchanges are available today, "there will be only a fraction of those left in 12 to 18 months because many models won't work," Sprieser said.

B2B exchanges like Transora replace the need for companies to make individual connections to each company with which they do business, she explained. "In an industry like the CPG industry -- with 10,000 suppliers, 1,000 manufacturers and 10,000 distribution points -- each company has to make 100 billion one-to-one connections. But with Transora, companies need to make only one connection to approach the same 100 billion connections."

She said Transora's goal is to create "a global, open, standards-based, industry-led marketplace that delivers breakthrough values to all industry participants" by making available services that span the entire value chain -- "not only focused on procurement but also on supply-chain optimization, retail services, financial services and eventually consumer services."

She said Transora is working with leading-edge technology providers to build its technology architecture, "so participants will need to rethink their involvement with technology and determine if they want to access part of that through our platform."