Stivison--E-commerce Has Arrived
But there is a new twist. Beyond eliminating paper shuffling, the big automakers are insisting that their suppliers use the same Web "bidding bazaars" to also do business with each other. Every step of the process—from raw materials to the delivery of products to the new car owner—will go through the same Internet-based system. Bidding, pricing, delivery, inventory-on-hand—all become much more transparent.
And the goal of all of this? GM explained that it sees the system as a way to assure itself of getting the benefits of the lowest costs at every step of the supply chain. By forcing its suppliers to use electronic commerce, and monitoring the results, GM can be sure that the efficiency savings—and the savings from open, competitive bidding—are being passed along to GM.
What's Good for the Goose
At one time, the nation laughed at Secretary of Defense Charles Wilson's claim that, "What was good for General Motors was good for the United States." However, Wilson's rationale for his statement, "Our company is too big. It goes with the welfare of the country," is still valid nearly 50 years later. What proves valuable to a single firm, which buys $87 billion of goods and services within the American economy, probably works as well for much of, if the rest of, the American economy.
The rules for doing business in America have changed. There can be no doubt that the electronic commerce model that boosts the bottom line in Detroit will spread quickly to energy, aerospace, communications, healthcare, consumer electronics, retailing and all the other major facets of our varied economy.
The graphic arts industry, the commercial printer in particular, is going to have to jump into the fray with both feet. Ford and GM have established the principle that a major purchaser can demand that its suppliers pass along the best deals on raw materials. How long can it be before our clients demand to see the evidence (rather than our best "package bid") that we are passing along the absolute best prices on paper, ink, bindery work, warehousing, etc.?