THE VISION AND REALITY COVISINT
COVISINT includes an analysis tool to help the manufacturers weigh competing bids from suppliers using attributes such as quality, price and delivery date.
COVISINT enables companies of any size, location or technical sophistication to securely share vital business information, applications and processes across their trading partner network. Covisint helps businesses accelerate decision making, reduce cost and improve responsivenesses in serving customers
WHAT ARE THE STRENGTHS AND WEAKNESSES OF COVISINT BUSINESS MODEL?
STRENGHTS OF COVISINT LINKS AUTOMAKERS TO THE ENTIRE SUPPLY CHAIN. COVISINT HELPS TO REDUCE TIME
COVISINT ACTS AS A SINGLE ENTRY POINT
WEAKNESSES COMPANIES BUILD THEIR OWN SUPPLY NETWORK CONSIDERING THEY WOULD LOOSE MONEY
LOSS OF CONTROL WHILE ONE APPROACHES COVISINT
How could it provide value to its users? Covisint sets high standards in the way companies do business…
Benefits to buyers Buyers can usually obtain better prices from it than they could on their own, since Covisint obtains discounts from suppliers by aggregating demand. It provides the convenience of one-stop shopping for a wide range of products, from processed materials to finished goods—a virtue that is especially valuable to buyers in fragmented markets.
Once buyers know what they want, the same search engine that located the product can facilitate the transaction by trimming its costs.
Benefits to sellers Covisint give sellers an opportunity to retain some control over their sales channels while minimizing service costs. It can take over a part of the value-added processing—arranging logistics, breaking bulk quantities into smaller lots,capacity planning,demand forecasting and even customizing products.
It would assemble sellers' products into packages.
Covisint E-Business Portal Expands Into Health Care The portal will let health-care professionals, hospital networks, and group members automate business transactions and share access to information via the Internet
That includes real-time claims processing and insurance eligibility authorization, as well as access to research, data on health-care and benefits programs, and electronic medical records.
DaimlerChrysler More than 8,000 DaimlerChrysler suppliers worldwide conduct day-to-day business functions via a secure, single point of entry the Covisint Communicate portal service. First announced in January 2002, DaimlerChrysler has branded its portal the "Global Supplier Portal" and has fulfilled its expectations.
Designed to standardize and increase communication between DaimlerChrysler and its suppliers, the portal uses a common framework and interface, and provides suppliers with access to more than 160 applications and a library of documents.
OTHERS USING COVISINT
Why has it been so difficult for Covisint to realize its original vision?
The Original Vision To create an e-marketplace where automotive companies could buy supplies As orders would be bundled together, costs would be lower than normal The electronic nature of the system would ensure lowest possible costs of each purchase order transaction Supply chains would never be dry No cost of setting up own procurement platform Low-cost point of entry for suppliers too
Reduced build-time of an automobile
The Reality Auto industry suppliers reluctant to participate fully in Covisint Tier 1 suppliers already have own private networks – fear they could lose money and control over their own supply chains The main point being stressed by Covisint, of “reducing costs” on supplies also scaring off suppliers Suppliers also worried about their products being turned into commodities reducing the visible difference and advantages of their products
reducing brand loyalty of manufacturers
The Reality Covisint suffered from a lack of clear leadership Even basic decisions spawned lengthy debates, due to fierce rivalry between CEOs Peter Weiss from Daimler , Alice Miles from Ford , and GM's A. Alan Turfe Indecision on software to be used
The Federal Trade Commission of America worried that the combined clout of the auto makers could be anti-competitive for suppliers
The Final Outcome On June 28, 2002, Covisint installed a new team of managers Less than a year later, the new CEO stepped down Covisint’s core supply chain management business – eliminated Now Covisint focuses on supply chain planning software that can be shared by automakers and their business partners over the Internet Managing Contracts with suppliers Requesting proposals to build specific parts
Assisting small suppliers