Exostar, eBuy lead the way to 21st century business

Reverse auctions, rapid data "pipelines," electronic purchase orders and virtual team rooms. Sound high-tech? You bet. Working together with suppliers, partners and customers, the eBuy@Boeing team designed these innovative products—as well as others—to e-enable Boeing to work in the electronic aerospace industry marketplace.

The new tools and services—designed by the program and other business units—shave hours off process times and also provide Boeing an efficient means of communicating with suppliers and business partners, resulting in lower cost and reduced cycle time.

Nearly three years ago, Boeing, Lockheed Martin, Raytheon, BAE Systems and Rolls-Royce announced the formation of Exostar, an electronic marketplace aimed at increasing the efficiency of transactions and collaborations across the aerospace and defense industry supply chain. They launched Exostar as a single e-marketplace allowing manufacturers, suppliers, customers, and service providers the ability to lower transaction costs significantly by offering standard products. Boeing also announced the creation of the eBuy Program to e-enable the aerospace supply chain and to align itself effectively with Exostar.

Since the formation of both Exostar and eBuy, Boeing has been recognized as an industry leader in enabling the business process with tangible results impacting the financial bottom line.

"Every day, Boeing employees using Exostar and eBuy products work with the newest technology, providing the right data to the right people at the right time globally," said Bill Stowers, Integrated Defense Systems Supplier Management vice president and leader of the Supplier Management Procurement Council.

Boeing employees, suppliers and partners are all benefiting from a reduction in paper-based processes through the use of the new Web-based products. Boeing Commercial Airplanes alone—using electronic purchase orders and purchase order changes—annually creates a stack of paper nearly the height of the Chicago Sears Tower --1,454 feet. Upon full implementation of all their e-business activities, the group expects to save more than 10,000 feet of paper annually.

"Our teams' goal is to optimize Boeing business processes and to provide a common service in an innovative and effective manner, allowing our business unit customers to e-enable their processes while benefiting through a reduction in overall cost," said Paul Pasquier, eBuy program director.

Working in partnership with business units and suppliers, Boeing eBuy program employees recently have achieved many program successes. For example, employees implemented the Exostar online auction system, called SourcePass, for procurement transactions. In 2002, Boeing business units realized an average savings of 32 percent over traditional negotiation techniques from hundreds of electronic auctions.

In the past 12 months the Boeing eBuy program has made working together with Boeing suppliers, partners and customers easier. The team implemented the Enterprise Supplier Portal—a secure business-to-business Web site, which allows suppliers to get information quickly and efficiently, reducing costs and increasing productivity. The portal has more than 18,000 supplier users now accessing the portal.

The program also created a data "pipeline," which moves information between Boeing and its suppliers faster and more efficiently. This new service—called Transaction Services—manages incoming and outgoing information from 22 business systems supporting supplier management and payment processes.

SupplyPass, a paperless purchase order, which allows suppliers to receive, acknowledge and manage their incoming orders, also was implemented. This capability allows many of the Boeing procurement groups to reduce the cost of delivering procurement transactions to suppliers by eliminating the delivery of paper "hard copies." As of the middle of last month more than 1,000 suppliers were set up to use SupplyPass.

eBuy program employees also are working on other tools and services to e-enable the enterprise supply chain. These include ForumPass—a Boeing-Supplier Web-based virtual team room, which streamlines team communication and reduces variability and cycle time. The Boeing 7E7 Program is the first new airplane program to use ForumPass during the beginning design phase of an airplane (see story, page 14).

The team also is working on the Boeing Enterprise Supplier Tool. This BEST Web site is a single source of enterprise supplier data that includes information from supplier addresses to diversity reports, including supplier profiles (addresses, contact names, etc.), reports (e.g., payment and diversity reports), corporate agreements and data analytics.

The Boeing eBuy program e-enabling technology will help change the way aerospace procurement employees—not just Boeing employees—include the Internet and other technologies in their work processes. These forward-thinking tools will play a critical role in allowing the company to develop new business models.

"Our alliance to Exostar—including eBuy products—allows us to adapt in a changing environment," said Boeing Chairman and CEO Phil Condit. "By adapting, we are tapping advances in e-commerce and computing technology to benefit both buyers and sellers in the aerospace and defense industry. We are improving a complex, fragmented procurement process that is both cumbersome and costly. We are simplifying tasks, increasing productivity, and standardizing an 'old economy' procurement process."

—Stephanie Mudgett