Mark Hannant
The race is on to bring the aviation industry into the e-commerce era. Announcements in the past two weeks have seen various companies stake their claim to put the $500 billion aerospace industry online.
aviationX has chosen Asian Aerospace 2000 as the stage to launch the business-to-business electronic marketplace it claims will revolutionise the industry.
The challenge is to offer the industry a marketplace in which companies can buy and sell products and services online and drive down their procurement costs.
Other industries, notably the automotive sector, have long seen the cost reduction opportunities of online procurement.
A number of joint venture announcements over the past month herald a similar move in the oil and gas industries. Each is driven by the need to reduce supply chain costs.
"The aviation industry's supply chain today is too expensive, too slow and much too inefficient," says Henrik Schroder, chairman and chief executive officer of aviationX.
Savings
"The time and cost savings offered by digital marketplaces such as ours make business-to-business commerce a necessity for the industry."
He estimates cost savings of around 15% for users who source parts and components through the network.
"The lynchpin of any e-marketplace is a true understanding of what's needed to reduce resource and cost expenditures. In our case, that means knowing how mechanics source landing gear assembly pins, how procurement officers process the related transactions, and what systems and out-put requirements facilitate and support both activities."
For aviationX the initial target is the commercial aviation sector which it values at $350 billion per annum. It then plans to expand to include the general aviation and defence sectors.
A Goldman Sachs report in September 1999 identified the aerospace industry as having one of the lowest levels of e-commerce penetration today but estimates that by 2004 around 35% of the industry's business-to-business sales will be internet-based.
The challenge in capturing a share of that huge potential market is to ensure the integrity of the available data, says Schroder.
Practice
"Through extensive benchmarking our network is based on the best practice of other business-to-business e-marketplaces.
"By designing our network in conjunction with an airline advisory group, we will provide unparalleled business process support and services that are specific to the aviation industry."
Source: Flight Daily News
