and Oracle to Create Multi-Billion-Dollar Business-to-Business Internet
VEGAS, NV, SEMA SHOW COVERAGE / ORACLE PRESS RELEASE
2, 1999 - Ford Motor Company CEO Jac Nasser and Oracle Corporation
President and COO Ray Lane today announced the formation of the
AutoXchange, an automotive e-business integrated supply chain to
be created and run by a newly formed joint venture between Ford
Motor Company and Oracle Corporation. Ford and Oracle will immediately
begin negotiations of a definitive agreement. The venture will initially
facilitate Ford's $80 billion in annual purchasing transactions
with its more than 30,000 suppliers and $300 billion extended supply
chain. The two companies will create the world's first automotive
online supply chain network, and the world's largest business-to-business
electronic network. This new online automotive marketplace is expected
to dramatically reduce Ford's purchasing costs and increase its
operating efficiencies through an integrated Internet supply chain
system. Further, it will extend Ford's core business into a virtual
e-business enterprise allowing direct connections of the supply
chain to the consumer to reduce Ford's time to market.
the terms of the business agreement, which is subject to the negotiation
of a definitive agreement between the parties, Ford will own a majority
of the new joint venture which is expected to become operational
in the first calendar quarter of 2000.
AutoXchange will allow Ford and its suppliers to capture savings
through more strategic sourcing of vehicle components, and eventually
automate the entire purchase process. Taking advantage of the inherent
cost savings associated with Internet-based transactions, the new
model initially will promote procurement efficiencies and allow
Ford's purchasing professionals to focus on product quality, supplier
competitiveness and performance, and time to market.
its part, Oracle will provide the software, implementation and support,
as well as host and manage the AutoXchange. Powered by Oracle( Exchange,
Oracle's on-line e-business marketplace, it is anticipated that
the AutoXchange's supply chain capabilities will ultimately extend
to other initiatives such as warranty, performance and design collaboration
and will become the e-business backbone that will ultimately connect
Ford's customers with their suppliers.
Ford, Oracle is the clear leader in business-to-business e-commerce.
Oracle was the only company with the resources and capabilities
to handle the scale and scope of our requirements. With this agreement,
Ford will redefine the limits of e-business enterprises," said Nasser.
"This new Internet supply chain gives Ford tremendous competitive
advantage. Better, faster, more effecient supply chains and efficient
acquisition of component parts, commodities, supplies and services
for Ford means we can provide our customers with better products
and services. This is a bonus for Ford suppliers; we're inviting
our supply chain partners to participate in the rewards of the e-enterprise."
venture will create the world's largest Internet supply chain,"
said Brian Kelley, president of Ford's Global E-Commerce unit. "It
will deliver major productivity to Ford, real savings to our suppliers
and reduced inventories to our dealers."
commented that, "Ford is the partner we wanted to have in this joint
venture. Ford is the most progressive in its understanding of the
magnitude and speed of change that e-business will have on the entire
automotive industry. Ford is furthest along in developing a strategy
that creates new capabilities throughout the automotive supply chain
from procurement to collaborative product development and from customer
to supplier. This venture is on an unprecedented scale and will
be a model for a vertical supply chain."
can spend more than 50 percent of their revenues purchasing goods
and services. A reduction in total purchase costs has a direct,
positive impact on increased profitability," Lane continued. Lane
cited the example of a major US manufacturer who, through the application
of Oracle procurement software, expects to save $500 million annually.
"Becoming an e-business allows companies to communicate in real
time across the supply chain for better utilization of resources.
The goal is to end the era of disconnected suppliers with big buffers
Internet Procurement software is currently being used by over 300
global corporations including Boeing, Compaq, General Electric ,
Honeywell, and UPS. Additionally BT, the company formerly known
as British Telecom, runs 25,000 users online today.
Ford Motor Co.
Motor Co. is the world's largest producer of trucks and the second-largest
producer of cars and trucks combined, marketing and selling approximately
7 million vehicles globally through its seven brands last year.
Ford Motor Co. employs approximately 354,000 people in plants, offices
and laboratories to serve consumers in more than 200 countries and
territories. Ford Motor Co. is also one of the largest providers
of financial services worldwide through 2,400 branches in 33 countries.
Corporation is the world's leading supplier of software for information
management, and the world's second largest software company. With
annual revenues of more than $9.1 billion, the company offers its
database, application server, tools and application products, along
with related consulting, education and support services, in more
than 145 countries around the world.
more information about Oracle, please call 650/506-7000. Oracle's
World Wide Web address is http://www.oracle.com/