DETROIT (Sept. 18, 5:40 p.m. EDT) — When it launches in a few weeks, Covisint, the Big 3 automakers´ joint e-marketplace, will be much more than the automotive version of eBay.
Yes, there will be auctions. But while Covisint´s business plan spent the summer under a Federal Trade Commission microscope, planners have quietly developed a wide range of tools and services for the mega marketplace.
The centerpiece is a 3-D "visualization tool" to let engineers and designers develop and revise automotive components from different facilities around the world at the same time.
"It absolutely would be of interest to suppliers," said Mike Suman, group vice president of electronic commerce at Johnson Controls Inc., in Plymouth, Mich.
"Everyone would have the same data at the same time," Suman said, adding that surprises during engineer meetings could be reduced or eliminated.
Everything is designed to increase speed and efficiency and improve communications.
There will be electronic catalogs, both for parts and supplies. Online tools will let users manage and analyze bids. And electronic quote requests will eliminate the need to use couriers.
With FTC permission to operate being given last week, Covisint now needs only approval from the Bundeskartellamt, Germany´s antitrust watchdog.
Peter Weiss, a temporary co-CEO on the joint Covisint planning team, expects approval soon. Covisint has an internal target of beginning operations late this month or early October and hopes to have a permanent CEO in place in 30-60 days.
Planners last week began revealing details about how automakers and suppliers will be able to use the trade exchange. They stressed they want to create more than just a Web-based auction house.
That is why the visualization tool from Engineering Animation Inc. of Ames, Iowa, an international technology provider, is so important. It will enable Covisint customers to collaborate simultaneously on product development projects via the Internet. It also indicates that Covisint is willing to use technology from providers other than its technology partners, Oracle Corp. and Commerce One Inc.
"We first look to our partners," Weiss said. "If they have best-of-breed (technology), we use them. If they don´t, we use what´s best-of-breed on the market."
"This visualization tool is the cornerstone of our product development ... tools," said Sam Sharan, a Covisint product-marketing representative. "It will be in the first release."
At the Automotive Industry Action Group´s Auto-Tech 2000 conference in Detroit last week, Sharan demonstrated how the visualization tool from Engineering Animation works using a 3-D computer file of a shock absorber.
"You can zoom in, rotate it, everyone sees the same view," Sharan said.
But the tool is not limited to components. It can be used to make changes in exterior vehicle styling as well.
With this tool, project team members from inside and outside the company can conduct interactive online conferences on two-dimensional and three-dimensional product data.
They can view and mark up data and documents and watch the changes being made in real time, saving valuable time. And they will be able to view computer-aided design files from CATIA, I-DEAS, ProEngineer and other systems.
In the purchasing arena, automakers and suppliers will be able to use Covisint to hold auctions and buy parts and supplies from online catalogs.
Suppliers can maintain both custom and community catalogs on the exchange.
A custom catalog is designed for a specific automaker. It will list a company´s products with prenegotiated prices. A supplier also may post a community catalog open to any automaker for the purchase of parts and supplies.
These catalogs typically will feature "indirect" parts and supplies —products such as paper, grease, desks and hanging file folders, said D.J. Cho, Covisint´s product marketing manager for procurement.
"These are not highly engineered parts," Cho said. "However, some suppliers may choose to put some `direct´ parts on the catalogs as well."
Catalogs can come from suppliers outside the automotive industry as well. For example, Office Depot or Best Buy might want to post their catalogs on Covisint, Cho said.
Covisint will offer two types of electronic auctions.
The buyer auction, also called the reverse auction, will enable automakers to accept bids from suppliers for vehicle programs.
The traditional seller auction will allow Covisint customers to auction off goods, such as an obsolete stamping press, or even an entire manufacturing line, Cho said.
There also is a feature called Quote Manager, whereby automakers will be able to send request-for-quote documents electronically to their suppliers, rather than by courier.
Finally, there is Quote Analysis, a post-bid management tool that automakers can use to analyze the responses.
All of these tools take paper out of the procurement process, Cho said. When Covisint begins operating, it is expected to be the world´s largest online trade exchange. Founding partners Ford Motor Co., General Motors Corp. and DaimlerChrysler AG spend about $240 billion in purchasing annually. With other partners Renault SA and Nissan Motor Co., that figure balloons to $300 billion.
Visteon Corp. last week became the latest Tier 1 supplier to agree to use Covisint. About 25 other suppliers also will participate.
Like the FTC, the Bundeskartellamt is addressing whether Covisint could result in price collusion and other anti-competitive practices among Ford, GM and DaimlerChrysler.
"We don´t anticipate any concerns being raised," Weiss said. "They just want to learn more."