SAP is betting, as is AMR Research, that the majority of SAP's enterprise-class customers will be putting tremendous amounts of energy and investment into PTXs [private trading exchanges] as a way to cement decades of building customer and supplier relationships."
A private exchange is a company extranet on steroids. A company invites vendors and customers into a secure area to transact business. In this marketplace, a company may hold reverse auctions, post Requests For Proposals (RFPs), provide design specifications, and in general collaborate with its business partners. A PTX is somewhat misnamed, since the concept of an exchange is generally thought to indicate a many-to-many model, whereas a PTX is a one-to-many model. But I doubt that companies care. They want the control, and even more importantly, the privacy, of a secure marketplace.
Read more about PTXs (before the buzz) in my presentation at a recent Delphi Group conference. I've also got a supply chain white paper now in pre-production that I'll link to when it's available.
Gorillas to Rule; No Room for the Little Guy?
At a recent Patricia Seybold Group/SPS Commerce discussion, Dr. Larry Smeltzer, professor of supply chain management at Arizona State University, argued that large firms which boast of electronically connecting their supply chains had done so by overlooking SMEs. An SME is a Small- to Medium-sized Enterprise, and such firms make up the majority, by number, of the companies in the US.
· Enduring supply chain rules based on e-commerce between large companies are already in place in the form of Electronic Data Interchange (EDI). But these relationships do not embrace SMEs.
· Large firms are fundamentally different than SMEs (no IT staff, fewer resources of all kinds), and the daily struggle of keeping an SME afloat receives more focus than implementing supply-chain connectivity.
· Integrated technological advances would help optimize supply chain connectivity.
Successful companies do not just add value, they reinvent it...[they] are more than links on a value chain. They are the centers of constellations of services, goods, and design.
So where will the SMEs be in this new constellation? Well, unless the bigger players give them a hand, many could find themselves out in the cold, unless they quickly undertake the effort and expense of getting connected. As John Chambers, president of Cisco Systems said, "The big won't beat the small - the fast will beat the slow."
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