Electronic markets in support of procurement processes along the automotive supply chain

Since the introduction of the internet, firms have continued to seek ways to use these public networks to gain competitive advantage. The procurement function is beginning to take on greater strategic importance as these networks started providing firms wider opportunities such as choices of suppliers. This aims not only to reduce procurement costs, but also to build stronger relationships with suppliers to improve quality and flexibility in meeting customer demand. This type of linkage of firms with their suppliers when the product manufactured is complex and supply-chain is heavily tiered, such as the case of the automobile industry, creates challenges to any electronic market or exchange that is aiming to support such a system. Based on discussions with some key individuals in an automotive supply chain and an in-depth analysis of a supply-chain segment, this paper explores the role electronic markets may have to play, if they are to support the procurement processes of various agents along the supply chain.