Leveraging suppliers relations

LABIDI Myriam

Date de création :	01.12.2005
Date de dépôt :	03.01.2006
Niveau :	BAC + 6

LEVERAGING SUPPLIERS RELATIONS

THROUGH THE USE OF INFORMATION AND

COMMUNICATION TECHNOLOGIES:

The evolution of the supplier role in the

aerospace and automotive indus try

Airbus tutor: Miss Celine Dedieu Airbus Trainee: Labidi Myriam

ESC Toulouse tutor: Mr Philippe Malaval Written in November 2005

CONTENTS

General Introduction: Supply Chain Management

· Main Aspects and Characteristics of the Supply Chain

· Material Flow

· Information Flow

· Buyer-Sellers Relations

· The Organization Goals Definition

· Supply Chain Planning

· Supply Chain Execution

· Strategic Procurement

Part I: Supplier Relationship Management, the extension of Supply Chain Management

1. The SRM concept

1.1 The Technical enablers

1.2 Customer service and support: SRM support functionalities

1.3 SRM and Purchase 1.4 SRM and Marketing 1.5 Conclusion

2. Concrete Example: Boeing and the evolution of the supplier role

2.1 Boeings transformation into a large parts and systems integrator

2.2 The 787 Dreamliner program: the elevation of suppliers status from provides to partners 2.3 The new supplier model: linking the supply chain

Part II: E-commerce exchanges

1. The three e-exch ange models

1.1 Public e-marketplaces

1.2 Industry-sponsored marketplaces or consortia 1.3 Private exchanges

2. Industry-sponsored marketplace infrastructure

2.1 Capital investment 2.2 Participant volume 2.3 Industry- sponsored marketplace functionnalities

3.

Private exchanges structure and functionalities

3.1 Private exchanges structure

3.2 Private exchange functionality

3.3 Private exchange value creation: the Daimler Chrysler supply chain network example

4. Choosing between Industry sponsored marketplace and private exchange

4.1 Sustainability of Industry-sponsored marketplaces and private exchanges 4.2 Identification of the processes to be adressed

4.3 Value metrics to be adressed

4.4 Comparison between the development and management costs 4.5 The best practices:

· Change process: the compu!sory partnership

· A so!id business mode!

· Adding value beyond the too!s

· Customer service

· Focusing on the value proposition

· Review of the interna! processes

5. Concrete example: the aerospace exchanges solutions

5.1 Exostar, the BAE Systems, Boeing, Lockheed Martin and Raytheon emarketplace 5.2 MyAicraft.com

5.3 Exostar and Myaircraft potential risks

5.4 The GE Aircraft Engines position toward Exostar

Part III Quality and e-commerce, control and enhancement of the supplier performances

1. Why quality is such a crucial stake?

1.1 The certification process: a quality communication mean 1.2 The ISO norms in the industry

1.3 Implementation of ISO 9001:2000

1.4 Certification, a prerequisite for B2B e-commerce

· Conformity assessment and assurance in e-commerce

· ISO 9000 certification and Internet e-commerce

· Ensuring online security and authencity

2. The aerospace quality strategy

2.1 The AS9000 standard

2.2 AS9100: the first international quality systems aerospace standard

2.3 Industry managed processes: demonstration of the supplier compliance

2.4 The Quality System Audits: the aerospace industry control other party processes 2.5 The Oasis database: a new aerospace procurement tool?

TRAINING PERIOD OVERVIEW AND

EXECUTIVE SUMMARY

As an Airbus trainee I had the opportunity to work for the Procurement Quality International (PQI) section of Central Airbus Entity. This subsection of Procurement mainly deals with quality issues. To that purpose, internal work must be done with the Airbus Quality Responsible as well as external work with the Supplier Quality Responsible.

This training period gave me the chance to understand how quality control is conducted in the aerospace industry. In addition to this overview, I get a real insight of the aerospace OEMs and supplier needs with regard to quality issues. I also get a deep knowledge of ICT tools deployment in a large company.

I was mainly in charge of the relationships with suppliers concerning the use of a collaborative platform. To that regard, I did some administrative work, meaning that I assured full completion of the registration process by the supplier. I also produce some communication documents, which were helping suppliers to understand the outputs and inputs of the collaborative platform. It was also needed to give some technical guidance through mail or phone calls. As communication was also conducted among Airbus employees, I was in charge of producing communication documents for the internal usage.

Related to the registration process some reporting was done especially during the PQI meetings. As a matter of fact, some key quality indicators were provided. They allow the measuring of the adoption level of the collaborative platform by the suppliers. These indicators also help the team to take corrective actions or to enhance the best actions.

All the work described above allows the cleaning up of the suppliers' repository database used by the Airbus employees. I also take part into the collaborative work done by one Airbus responsible with the European Aerospace Quality Group.

With regard to technical issues, I worked in collaboration with the support staff of the collaborative platform. I was in charge of explaining the difficulties encountered by the external and internal users of the platform. To that purpose written reports explained the users needs and even propose other solutions.

In addition to the collaborative work done with the support staff, we also had to coordinate our efforts with the other departments. The holding of different meetings ensured that we were following the same road.

Considering the main tasks conducted during my training period, I've decided to write over the link between the transformation of the supplier role and the use of Information and Communication Technologies. Throughout this paper we try to demonstrate the shift in the roles of suppliers and how the tools provided by the Information and Communication Technologies (ICTs) enhance the collaboration in the aerospace and automotive industry. Considering the similarities between the automotive and aerospace supply chain, we decided to illustrate theory with vivid examples taken from both industries. In order to some useful benchmarking, we also decided to focus on the Boeing practice. We most particularly examine the e-tools, which are used by the Airbus competitor.

The main goal of this paper is to convince the readers that concepts such as supply chain management and supplier relationship management are not useless theories served by costly and sophisticated e-tools. We try to demonstrate that the e-tools available can create value when implemented in the best manner.

Considering the new face of competition, the relationship with suppliers is no longer the same indeed. We would like to prove that the combination of the top management vision and the use of the most appropriate e-tools alleviate the supplier relationship to a real and highly valuable collaboration. We even conclude that firms, which can consider themselves as networks are adopting the "extended enterprise" business model.

We begin to introduce the discussion by explaining how supply chain management goes beyond production and logistics functions. To that purpose, we try to underline how supply chain management leads to a value chain approach. Then, we examine how Suppliers Relationship Management e- tools enabled a better collaboration with the best suppliers.

The second part of this paper focus on the two main models of e-commerce exchanges, which are used in both automotive and aerospace industry. In order to do that, we detail the structure and functionalities of both exchanges. Then, we decided to explain the best practices in the case of e-commerce exchanges adoption and implementation.

As quality is a key issue for both OEMs and suppliers in the aerospace industry, we decided to explain the industry approach of these issues and and its link with ICTs.

GLOSSARY OF TERMS

AECMA: European Association of Aerospace Industries

EDI: Electronic Data Interchange, the transfer of data between different companies using networks, such as the Internet. As more and more companies get connected to the Internet, EDI is becoming increasingly important as an easy mechanism for companies to buy, sell, and trade information

E- RFx: e-request for qualification

ERP: Enterprise Resource Planning. An amalgamation of a company's information systems designed to bind more closely a variety of company functions including human resources, inventories and financials while simultaneously linking the company to customers and vendors.

FAA : Federal Aviation Administration

FAR: Federal aviation requirements

ISO: International Organization for Standardization OEM or PRIMES: Original equipment manufacturer

OTHER PARTIES: Independent organisations engaged in audit and certification activities that are under control and oversight of aerospace industry. They are industry managed

SECOND SHARED PARTIES: European association called ASD EASE in charge of assessing Suppliers QMS, applying the same assessment rules, and sharing the assessment results between its members. They are industry managed

THIRD PARTIES: Independent organisations engaged in audit and certification activities that are not under control and oversight of aerospace industry. They are not industry managed

XML: Extensible Markup Language is a specification developed by the W3C. XML is a pared-down version of SGML, designed especially for Web documents. It allows designers to create their own customized tags, enabling the definition, transmission, validation, and interpretation of data between applications and between organizations.

GENERAL INTRODUCTION: Supply chain

management

"As the economy changes, as competition becomes more global,
it's no longer company vs. company but supply chain versus
supply chain."
Harold Sirkin, VP Boston Consulting Group

Recently, the global market schemes have generated new concepts and mechanisms in various economic and industrial sectors. In the complicated global market place, "Core Competencies" of each enterprise empower their competitive advantages. Thus, the focus of various organizations is directed to their core competencies. For this reason, they try to manage their internal and external resources comprehensively. This orientation to integrating different parts of a business or a production process causes each industry to move initially toward Computer Integrated Manufacturing (CIM). Thereafter, they have evolved into Computer Integrated Business (CIB). More recently, they have grown into Extended Enterprise (Browne et al., 1996).

As a result, modern managers are engaged more and more in the processes of Decision Making (DM) and are forced to consider all factors within the walls of their factories, as well as external factors with a holistic perspective. This led to Supply Chain (SC) systems or more generally, Value Chain (VC) and Value Stream (VS) approaches. SC, VC and VS concepts and definitions, as a total system, have been investigated by many researchers at universities and academic centers, as well as by professionals in industries.

The first concern of a supply chain and a value chain is generally the purchasing process. In such cases, the focus is on the supplier selection, supplier evaluation and relational activities with sellers. In a larger perspective, upstream suppliers are considered as a part of a manufacturing/ buyer enterprise. Buyers usually plan and control their systems and link them to their suppliers. Tiers or levels of suppliers form a supply network, with the buyer managing and leading it in an integrated way.

Finally, supply chain management leads to a value chain approach, in which all the affecting elements related to the customer(s) are considered and analyzed in a broader view. In this approach, manufacturers and distributors are included in the chain. In general, a supply chain is defined as follow: "A supply chain is the network of facilities and activities that performs the functions of product development, procurement of material from vendors, the movement of materials between facilities, the manufacturing products, the distribution of finished goods to customers, and after-market support for sustainability."

Based on this definition, such a network in a system contains a high degree of imprecision. This is mainly due to its real-world character and its imprecise interfaces among its factors, where uncertainties in activities from raw material procurement to the end user make the SC imprecise.

· Main Aspects and Characteristics of the Supply Chain

SC systems can be studied and analyzed from several viewpoints. There are three major perspectives of SC systems: (1) "Material Flow", (2) "Information Flow", and (3) "Buyer-Seller Relations". Apart from these three aspects of SC systems, there are some other building blocks for these systems, such as raw material suppliers, manufacturers of parts, assemblers, Original Equipment Manufacturers (OEMs), distributors, retailers, customers, etc. It should be noted that these aspects examine the SC and all its components in an integrated way.

· Material Flow

Manufacturers should manage their supply resources to meet customer needs. As a matter of fact, today an integrated management of the material flow through different levels of suppliers and distributors is challenging for managers.

Production planning in different sections of a manufacturing enterprise and planning its upstream and downstream activities in a harmonized way are two of the main tasks of managing the flow of materials in an SC.

Synchronizing production planning of each entity and, in a more detailed way, scheduling production lines or job shops in these components of the SC are very complicated and often intractable. This complication can be highlighted if we investigate this chain from a product-oriented point of view.

Consider a product structure or a tree. In the real world, each level of the product tree is assigned to a supplier. A production plan for such a product , which uses, e.g., the MRP approach, determines a due date for each level and each component. When all of these components are produced in one factory, the problem is easier to solve. However, when these levels expand through a chain of suppliers, synchronizing them is usually very complicated, while this synchronization is an obligation in Customer-Driven Manufacturing (CDM). Clearly, a successful plan critically needs supportive logistics. Transportation planning, inventory management and quality assurance activities are some logistics in the smoothing flow of materials through the SC. These logistic activities should be managed in an integrated way.

· Information Flow

The managing and control of each system comprise several parts. In an SC system, information management is an essential sector. Complexities in business planning activities occur in four areas: (a) technological revolution, (1) product changes, (2) research and development, and (3) information explosion. The SC system could be seen as a business enterprise with a high level of data transaction. As a matter of fact, a well-organized information system is a foundation for a proper material flow in the SC.

· Buyer-Seller Relations

The buyer-seller relation is the main aspect of an SC. While traditional approaches to the buy-sell process focus on factors like the price in the buyer-seller relation, the SC draws attention to quality, R&D, cost reduction, customer satisfaction, and partnerships. In an SC, both external and internal resources are important. Consequently, the relations are not established based just on the price and cost.

In the design of new products, for instance, Early Supplier Involvement and Concurrent Engineering are new concepts, which are applied to the SC and lead it to a holistic and comprehensive approach. Some other aspects of the SC, which make it different from traditional approaches are long-term contracts with suppliers and distributors, emphasizing the value adding activities, strategic alliances and information sharing.

· The Organization Goals Definition

Designing and implementing a supply chain management strategy cannot take place until an overall company business plan or strategic plan has been determined. In the planning hierarchy, the business plan or strategic plan is the roadmap for the direction of the company. Just as you would not begin a car trip to a new destination without a map and directions, so too should your company develop its own plan or roadmap as to where it wants to be in 2, 5 or even 10 years.

1 Achieving World-Class Supply Chain Alignment: Benefits, Barriers, and Bridges by Stanley E. Fawcett Department of Management Marriott School of Management Brigham Young University and Gregory M. Magnan Albers School of Management Seattle University CENTER FOR ADVANCEDPURCHASING STUDIES2001, p8

It is important to define a company's strategy in the context of the broader market. An examination of customer's long-range business plans can give an indication of the anticipated market movement and what their position will be, as well as what is necessary to be a supplier to them. This information is usually available for those companies that are able to and willing to take the time to meet and talk to their customers and especially their prospective customers, those who are not yet customers but represent the targeted market. It is also vital to keep a business plan or strategy current. Because markets and customers rapidly change their expectations, so to must a business plan or strategy be flexible and take into account the fluidity of the markets. In fact, a business plan is never truly finished unless an organization is winding up its operations.

The resources required to push the organization in the strategic direction indicated by the business plan must be identified. The primary resource requirements that will need to be determined are people and human resource requirements, financial requirements, infrastructure (both physical and technological) requirements and partner or supplier requirements. When looking out over a period of years it will be difficult to determine exactly what and how many resources will be required to implement a business strategy. However, it is still important to match and plan the acquisition or addition of resources necessary for the strategy as a check on plan credibility and costs.

The resources identified by the company as necessary to the strategic plan should be those sought or valued by the desired customer and market base. For example, if a company sets aside substantial sums for adding an Enterprise Resource Planning platform, it should be certain that the software will improve the capability of the company to service its target market. A company must also be certain it is providing options desired by its current and prospective customers when adding capacity, services or products. It is important to note that when examining the importance of resources in executing a business plan or strategy it is necessary to look at the target market, which may or may not include the current customer base or market.

· Supply Chain Planning

Implementation of a business strategy requires the understanding of supply chain management. That is the reason why it is important to set a definition of supply chain management. Stanford University's Global Supply Chain Management Forum states the following, "Supply chain management deals with the management of materials, information and financial flows in a network consisting of suppliers, manufacturers/producers, distributors and customers".

Long-range planning for supply chain activities must be linked with the planned activities of marketing and sales to ensure that the necessary resources and processes are in place to support anticipated customer demand.

In order to gain efficiency, the company strategic planning must include supply chain management at an early stage. With regard to supply chain activities, long-range planning must link it with the marketing and sales activities in order to support anticipated customer demand.

Sales and Operations Planning is the cohesive operational strategy that supports the companies business strategy. It provides the means to incorporate, both supply chain management, sales and marketing. Based on realistic and achievable forecasts, the Sales and Operations Planning provides the company plan. Supply chain management activities cannot be maximized if they are conducted without long-term strategy coordination with the other functional areas in the organization. It seems that planning is an essential stage in supply chain management and execution.

Good forecasting is also essential as it enables the operations function to define the best balance between the available resources and the anticipated demand. Forecasting also allows to plan, predict and anticipate future market demand. As customers expect more and more from their suppliers, it is important to share schedules and forecasts with suppliers. It should allow suppliers to use a customer's forecasted schedule and to adapt their organizations. This forecasted schedule helps to avoid the so-called Bull Whip Effect, which is the distortion between the end-customer demand and the supply chain activities. The Bull Whip Effect often result from the lack of coordinated and shared information in the supply chain which is amplified by the forecasting of suppliers on customer's forecasts. As customer's forecasts are rarely 100% reliable, forecasting on it should increase the Bull Whip Effect

· Supply Chain Execution

Supply chain management enables the company to execute its strategy through operations and process. Consequently, Supply chain management organises the following operations:

- Production planning and scheduling

- Procurement of raw materials

- Production of goods

- Delivery to customer

Implementing supply chain management at the fist stage of the Sales and Operations Planning allows the best use of resources. As a matter of fact, poor asset utilization, bloated inventories, poor on time deliveries, high shipping and storage costs and low quality often reveals poor planning rather than poor execution.

Various tools such as Lean manufacturing, Just-In-Time, Total Quality Management and strategic inventory management ensure the most efficient and responsive production system, meaning that you use and have no more than what you need at any given time. These tools focus on the reduction of change- over times in order to produce smaller lots without substantial cost difference.

The automotive and aerospace industries were the first ones to lean out their supply chain. For instance, Toyota was one of the pioneers in the Just-In-Time and lean production use within its

manufacturing systems. Toyota lowers its production costs through the use of Total Quality Management (TQM). Total Quality Management means that the company drives its quality principles into its suppliers and even their suppliers' suppliers. The implementation of TQM ensures that only quality products were delivered to Toyota assembly lines. Therefore, the quality defects number was significantly reduced. As Toyota cars were of higher quality at cheaper prices, Toyota was enabled to took market share away from the American automotive companies and to develop brand value in the United States

Boeing tried to copy the automotive model of production. Boeing has tried to push quality up the supply chain to its suppliers. In larger suppliers such as Honeywell Aerospace, this has even led to the formation of on-site supplier development teams that assist suppliers in reducing costs, lead-times and quality defects in exchange for long-term agreements, year over-year price reductions and cost savings sharing from the direct work of the consulting teams. The result has been that suppliers who have participated in this program have seen higher volumes, revenues and more predictable demand while Honeywell and Boeing, have seen lower costs, better quality and better delivery.

Technologies such as Electronic Data Interchange (EDI), Enterprise Resource Planning (ERP), Manufacturing Resource Planning (MRPII) and Material Requirements Planning (MRP) play a key role in the execution of company operations. These technologies even change the way business is conducted. For instance, in the automotive industry Chrysler, Ford and General Motors put in place a common platform for EDI. In order to minimize on-floor inventory and cash outflow, the automotive assemblers require hourly deliveries by their suppliers. Consequently, the EDI platform main goal was to allow the sharing of schedules both from the automotive company to the supplier and from the supplier to the automotive company.

Being a player in the global marketplace means that the company is enabled to access, to receive and send information. However, in order to ensure the better use of the different technologies described, it must be possible to automate proper internal processes meaning that they must yield good information and results. These strategies of partnerships must be built on trust and imply sharing of information. In addition, the exchange and management of information must not be an undue burden for the participants.

Supply chain management cannot be considered solely as a cost cutting tool. As a matter of fact, without direction cost cuts should impact the services, which are valued by the customers.

· Strategic Procurement

When companies look to implement a strategic procurement program, they should again look at what their customers should truly value and try to shape the supply chain within their influence to meet those value expectations as efficiently as possible.

Quite often Strategic Procurement is considered as the way to get the lowest price from suppliers. However, it seems that the savings generated this way are limited. As a matter of fact, companies that have focused on developing relationships with only a few strategic suppliers have saved significantly more in the long run.

According to the study conducted by the Golden Gate University in California (1992) and the Mc Kinsey study (1997), purchased goods and services could account for 50 to 80 percent of a company's

expenditure. With so much product value tied up in the costs of procurement, the implementation of a lean supply chain strategy implies an effective and planned partnership with suppliers.

Implementation of a strategic procurement program implies the reshaping of the supply chain according to the value expected from the customers. Strategic procurement allows to lower total costs, higher quality, better delivery, fewer supplier and outsourcing of non-core operations to the most reliable suppliers. However, this means that a narrowed supplier base may result in less bargaining power. In addition, delivery problems should affect operations and the functional and technical capability of suppliers should limit the quantities and types of parts that can be purchased.

Already, many manufacturers are seeing order sizes shrink, and frequency of delivery increase. To meet these customer requirements a company's suppliers must be similarly aligned to meet the needs of the marketplace and the customer. In the aerospace and automotive industries, a tier system has been developed consisting of many levels of suppliers, assemblers and an end assembler/marketer. Each tier works with its immediate suppliers to operate as efficiently as possible.

In order to perform its role, a strategic procurement program requires resources and skilled staff. For instance, the Ford motor company's encountered a purchasing fiasco in 2002 , Ford lost about 1 million dollars in its stockpile of precious metals because of failed planning and internal communication. As a matter of fact, the Ford's purchasing group used the same techniques they had used in buying commodities such as steel and copper, while Ford's procurement group was stockpiling large amounts of precious metals. This example illustrates that a strategic procurement is essential.

Supply chain management goes beyond production and logistics functions. In order to support the business strategy, it is linked with planning in coordination with sales and marketing. Several tools such as Business Planning, Sales and Operating Planning coupled with the use of information technology enables firms to better plan and manage their business.

PART I: Supplier Relationship Management, the

extension of supply chain management

Supplier relationships are critical to any organisation. As they influence product development costs, inventory levels, manufacturing schedules and the timeliness of delivery of goods and services, Suppliers can directly impact the financial performance and profitability of a buying enterprise.

Many leading companies have realized that it is worthwhile investing to make sure these relationships are managed effectively and efficiently. In recent years, companies have invested in supply chain management (SCM) software to automate procurement processes, improve delivery times and reduce the cost of doing business. Nowadays, market trends, such as increased global competition, shorter product lifecycles and the outsourcing of business processes, require organization to improve collaboration with their supplier base and to examine methods of further reducing the costs associated with supplier relationships.

Supplier relationship management (SRM) represents an evolutionary extension of supply chain management, driven by the need for enterprises to better understand their suppliers' long-term financial and operational contribution to the top and bottom lines. It also represents an opportunity to improve the accuracy and speed of buyer-supplier transactions, while improving collaborative working practices to the benefit of both parties, driving continuous improvement and lowering total cost of ownership. It is the next step in managing the supply chain more effectively.

Primarily, SRM tools have been developed to reduce the total cost of ownership (TCO) for procured goods, while creating competitive advantage for an organization through deeper relationships with its suppliers. Another trend that highlights the need for effective supplier relationship management is the move by enterprises to outsource key functions, from design to product assembly to after-sales service, in order to improve competitiveness and financial performance.

It is obvious that procurement represents the single largest expense for most organizations. Therefore, the development of relationships with the best suppliers is key to the company success as it ensures timely delivery, product quality and best prices.

Different mechanisms can be used in order to reduce procurement costs. For instance, catalogs, auctions and request for proposals are often put in place to reach that goal. However, if the Customer Relationship Management systems of each player are not interconnected, not enough suppliers will respond, catalogs will not be completed of auctions. In this case, the company cannot achieve the reduction cost expected.

It seems that one of the first concerns of IT initiatives was the development of supplier relationship through EDI and e-procurement solutions. To that purpose, EDI and e-procurement solutions help to exchange data (e.g contract, order, delivery coupons) between customers and suppliers. However, they do not really tackle the main relationship management supplier issues such as the understanding of suppliers needs, behavior or performances measures.

1. The SRM concept:

Supplier Relationship Management is defined as follow by the Gartner Group: "the practices needed to establish the business rules, and the understanding needed for interacting with suppliers of products and services of varied criticality to the profitability of the enterprise". Other definitions summarize SRM as the next generation of e-procurement or integrated solution which bridges product, development, sourcing, supply planning, and procurement across the value chain.

We are going to adopt a marketing approach toward Supplier Relationship Management, meaning that SRM must attract, filter suppliers, and promote the company needs. As a matter of fact, SRM needs to support the entire supplier relationship lifecycle.

SRM must attract new suppliers as in our knowledge and global economy, it is becoming more and more difficult to find the best supplier. SRM must also help to acquire new suppliers by doing business with them. As working with the best suppliers is key to maintain a competitive edge, SRM must help to retain the best ones. As ending a contract with a "bad" supplier is another filter, SRM must help to track the rejection of termination of contract

The main goal of SRM is to achieve the better purchase by supporting and developing the suppliers understanding. Consequently, companies should gain the following competitive advantages:

- Increase satisfaction of goods and services purchased and speed up product development by promoting a shared knowledge of suppliers and alternative technologies.

- Increase supplier's satisfaction to attract and retain the most competitive ones.

- Lower prices for purchase and maintenance of goods and services by improving business processes across the supply chain.

Technical integration is another key requirement of SRM solutions implementation. Software companies often propose the integration of both supplier's CRM and buyer's SRM. As a matter of fact, this synchronized integration should develop the relationship and the speed of information exchange. However, we must keep in mind that prior actions need to be conduct before that. First of all, the company must find the proper supplier, perform some check or investigation, and discuss the product specifications. At this stage of implementation, the SRM solution does not need integration with the outside. The company needs to collect its internal sources such as procurement, sales or marketing before calling for information from the outside. As a matter of fact, in very competitive market, suppliers are often changed and it is very difficult to keep information up to date.

1.1 The Technical enablers

The basis of any SRM solution is a common supplier repository. When this repository works, it can be used for reporting, analysis tools.

- Content management and document management: the documents available can concern products and services. They can also cover the infrastructure such as building, factory and all the goods purchased or needing maintenance.

- Knowledge management: As the field knowledge of a procurement officer is its key asset, the experience sharing can lower training time. Consequently, it can impact the procurement performance.

- ERP integration: links the existing ERP and legacy system with the SRM functionalities. Integration is the key element for a proper SRM

1.2 Customer service and support: SRM support functionnalities

SRM products support the company relation with its suppliers in order to provide the best quality and most suited services to its customers at the lowest cost. That is the reason why SRM helps to collect and manage the information from all departments. For instance, identified product issues can be reported by the call management unit, which updates the supplier repository. The procurement officer is automatically informed and can contact the supplier. Then the product line can be adapted and the product design modified in order to solve the problem. With regard to supplier selection, this problem tracking is highly valuable as the supplier corrective actions will be considered.

.

- Call management:

SRM focus on the calls which are made to suppliers. The system ensures that a call for information or maintenance is followed until the end of the process. Call management is not restricted to the purchase officers, it can be used by every employee of the firm.

- Field service and dispatch:

In the case of maintenance the action of production and responsible users must be coordinated. That is the reason why the concerned employee must have granted access to specific information such as warrany, product specifications...

- E-Service:

Call management, Field service and dispatch can be accessed via the web and need the appropriate support

1.3 SRM and Purchase:

One of the SRM goal is to achieve the automation of the sales force, meaning that it must help to improve the efficiency by reducing time and cost of sales. Electronic catalogues, auctioning and electronic request for proposals (RFP) were the last evolutions since the 70's. ISRM which,integrates these tools and the other procurement activities (e. g product design, product development) imposes itself as the natural evolution.

- Purchase assistant:

It manages bids and assists in the creation of the Request for Proposal and requirement description.

- Opportunity Management System:

The identification of the company needs is key to the company activities and that is the reason why they
must be tracked from their identification to the actual purchase. They can concern product improvements or
completely new products and services. Consequently, SRM must enable to prioritize the needs and to track

their moves along the cycle. It can also enable to report the activities and to manage the workflow in order to automate the paper flow.

- Purchase configuration system:

After the identification of the product or service need, comes the design, the writing of specifications, the description and the definition of the actions to be taken such as the financing, the best combination of suppliers or the estimation of the price

- Partner Relationship Management:

As most of the suppliers depend upon their own suppliers performances, partner relationship management is key to the success of both players. That is the reason why providing the right support to your supplier can increase its performance and consequently reduce your costs. In that partnership perspective, the smaller companies are enabled to offer joint products and services through consortiums. Keeping track of relationships with its own suppliers and its suppliers' suppliers allows to identify problems or potential improvements. As well as the relationship tracking, the assistance in planning, recruitment, training, certification, lead management and channel market help the partner to improve its efficiency and service.

- Interactive purchasing systems:

The definition of standard acceptance criteria and dealing with standardized goods, allows to automate the purchase decision using an auctioning process.

1.4 SRM and Marketing:

Marketing is at the center of any sales strategy. To many purchase officers, the best warranty for a successful purchase is the number of suppliers in competition. By promoting its needs through the use of marketing techniques (single, multiple-channel campaigns) a company can attract as many suppliers as required. Company directories can also be used, but automated tools to search on the Internet for suppliers are now emerging .

- Campaign management system:

The search for suppliers must be pro active as simply waiting for the suppliers to come is not efficient. Suppliers also need to be attracted through the use of communication channels such as electronic publication, newspaper, newsgroups and marketplaces. It is also necessary to know the cost of these tracking sources. Furthermore, it is essential to target the best suppliers.

- Telemarketing: After the identification of potential suppliers, the purchase officers get in direct contacts with them in order to collect additional information. The information collected can even lead to the modification of the needs or product reshaping. Then, these information can be shared among the employees of the company. The system can also keep track of contacts.

- Web measurement tools:

Web based purchase system such as auction or RFP must be measurable. Identification, the users profile and how they use the system must be known in order to measure the efficiency of the Web based purchase system.

1.5 Conclusion

The underlying philosophy of SRM system is the better understanding of the supplier by collecting and aggregating information from various sources (e. g purchase officer, marketing, R&D, service and support, maintenance). Consequently, companies are allowed to identify the best suppliers and therefore help to improve the company performance. From that internal perspective, SRM should be seen as a complement to the buyer's CRM.

In order to gain maximum profit from Customer Relationship Management (CRM) and SRM, both systems need to be integrated. As a matter of fact, customer and supplier's data sources are sometimes the same. In addition, CRM systems, which collect customer information, also provide data about supplier's product or service quality. SRM systems collect supplier's customer information and customer satisfaction studies, which can complement the CRM systems. Consequently, integration should avoid redundant information and ensure that the widest range of information sources is covered. We can conclude that maximization of the information flow can be done though the integration of both CRM and SRM with the major company information systems such as ERP.

2. Concrete Example: Boeing and the evolution of the supplier role

2.1 Boeings transformation into a large parts and systems integrator

Founded in 1916, Boeing evokes images of the amazing products and services. Each day, more than three million people board Boeing jetliners, 335 satellites put into orbit by Boeing launch vehicles pass overhead, and 6,000 Boeing military aircraft stand guard with air forces of 20 countries and every branch of the U.S. armed forces. They are the leading aerospace company in the world and the No. 1 U.S. exporter. Boeing holds more than 6,000 patents, and their capabilities and related services include advanced information and communications systems, financial services, defense systems, missiles, rocket engines, launch systems and satellites.

But the company is about much more than statistics or products, no matter how awe-inspiring. Boeing's 186,900 employees, with 23,400 advanced degrees, are some of the most highly skilled, educated and motivated in the world. Partnered with hundreds of thousands more talented people at 15,842 suppliers worldwide, Boeing sees tremendous opportunities in the years ahead for connecting and protecting people, as well as streamlining their supplier network to increase profitability and improve efficiency.

Boeing clearly transforms itself into an integrator of large parts and systems. Consequently, supplier's role is completely changed. In the past, Boeing and its suppliers were duplicating their efforts in development and production. For instance, when designing and building equipments, the Boeing supplier was sending it to its lab or production area. Then, the supplier was testing and shipping this equipment to Boeing which was repeating the very same operations.

Nowadays, Lean manufacturing principles rely more heavily on the supply base in order to achieve customers demand. Consequently, as suppliers jointly develop systems with Boeing, it avoids redundancies. This Lean manufacturing approach completely shifts the role of suppliers who are not vendors but suppliers of Boeing components,which are meeting Boeing specifications. Lean manufacturing results in reduced cost and better products.

As Boeing focuses its attention on the integration of large components and systems and total life cycle support, the role of the supplier has become even more critical. It means that suppliers are obliged to assume more and more responsibilities. They must manage everything from raw materials to critical certifications. They are even requested to assume the management and oversight of quality and delivery from other suppliers in the chain. Consequently, it is key to eliminate waste and to optimize supply chains.

For instance, Boeing applies Lean principles to its inventory management. In order to streamline its production processes, Boeing adopted just-in-time ordering, point-of-use delivery and internal kitting. Consequently, Boeing suppliers were required to use just-in-time techniques.

In support of this, Integrated Defense Systems has adopted an online supply-chain tool called consumption-based ordering. This tool allows Boeing to share its inventory levels with suppliers. The system lets suppliers aggregate demand and order at their discretion, building and shipping only when Boeing inventory levels fall below specified thresholds.

The supplier role shift allows Boeing and its suppliers to set inventory levels based on consumption rates needed to support production. As a consequence, Boeing cut the number of storage facilities at its production sites. Boeing facilities are no more filled with raw materials and inventory. Boeing receives parts just in time at a given assembly area. The use of eBuy and the Min/Max ordering system in Wichita, Kan allowed Boeing in a single year to reduce inventory by more than $300 million.

From the supplier perspective, it is easier and more efficient to plan the production rates rather than waiting for orders. In addition, they are enabled to forecast staffing requirements, to better schedule maintenance and to perform their Lean improvements.

Boeing's focus is on large-scale systems integration, which must result in total customer solutions and lifetime support. That is the reason why Boeing suppliers are no longer considered as subordinates but as team members. Indeed, Suppliers imputs are critical. For instance, Goodrich and Hamilton Sundstrand are doing more and more systems integration works, which were usually conducted by Boeing.

In the past, each company was used to hold its strategies and information. Data and ideas sharing significantly improved communication between Boeing and its suppliers. It helps both players to improve their own production systems. For instance, a better communication, processes and understanding simplifies the testing procedure. The testing procedure, which should be performed only one time allows lower costs and a better product.

2.2 The 787 Dreamline program: the elevation of suppliers status from providers to partners

Suppliers on the 787 program are not just being consulted on how to improve the current systems or components they provide. They are sharing risk by participating early on in the design-build process to ensure the best design is used from the start.

Boeing decided to significantly change its supplier involvement in the 787 program. Instead of simply consulting them, Boeing required its suppliers to share risks. In order to use the best design, suppliers actively participate in the design-build process, meaning that they were involved in the conceptualization, joint development and detailed design. All the new ideas for systems and structures were considered during the conceptualization phase. Then, Boeing selected a small number of suppliers for the

joint development phase. This dozen of suppliers assumed a greater responsibility than on previous new airplane projects, they became real partners. For instance, Goodrich collaborated on the development process of the 787 nacelle and thrust reverser system. Usually, such a development process implies the competition of a large number of people including independent designers and competitors. The usual development process often leads to design iterations. Instead of this, Goodrich, Boeing and others designed the 787 nacelle as a team. Then, all team members stepped back and competed normally to win the contract.

In order to improve its supply chain efficiency, Boeing heavily reduced its core supply base (79 percent) and increased business with high-performing suppliers. The number of Boeings suppliers has dropped from more than 30,000 in 1998 to 6,450 now. These 6,450 suppliers are based in more than 100 countries. 86 percent of the purchase and change orders transactions are conducted through eBuy. The system delivers more than 360,000 transactions a month electronically.

Considering the relationships strengthening and the evolution of supply chains, prime contractors focus on larger-scale assembly integration. As they share risk, support the product throughout its life cycle and focus on innovation and improvement, suppliers are becoming real partners, they are no more subordinates.

· The new supplier model:

They are many reasons to move to a new supplier model. Firstly, Procurement costs represent a high percentage of the sum spent on the aircraft building. Consequently, the money saved in Procurement costs can be invested in new products and services.

Second of all, better asset use by Boeing and its suppliers is highly valuable. As a matter of fact, owning and operating facilities, which works at reduced capacities is completely inefficient and out of sense. That is the reason why letting the suppliers operate can be the best solution. Therefore, it allows Boeing to invest in new technologies and its suppliers to become strong community leaders

Thirdly, it is obvious that working with only the best suppliers allows to maximize opportunities to consolidate work with them. Boeing ensures the highest quality and lowest units costs that can be passed along to the customer.

The shift in the supplier role allows Boeing to move up the value stream by focusing on the customer voice and requirements, the airplane's overall design, architecture and integration and then on final assembly and delivery. Managing an efficient and responsive supplier base allows Boeing to improve the quality and safety of the products delivered. In addition, these products are less expensive.

Lean Supply Chain does not only concern manufacturing. It should be applied to the whole product life cycle from raw materials to the fleet deployment. This Lean Supply Chain dynamic implies trust between true partners. It means that Boeing must sometimes transfer a core competency to its suppliers, which can do it as well as Boeing and even more better. In order to remain competitive, Boeing depends upon one healthy supply chain indeed. As the supplier becomes an integral part of the design and production process, Boeing and its supplier share a common destiny. Boeings success is fundamentally linked to how well it works with its suppliers.

PART II: E-commerce exchanges

In the late 1999/early 2000, after e-markets encountered hurdles in gaining traction, the press and investment community refocused on the emerging consortiums. Analysts and industry experts considered that these consortia would be "the next big thing" in the B2B landscape. By 2000, private exchanges overtook consortia in terms of favourable media coverage. Analysts predicted exponential growth in transaction volume and dollars in current and near-term investments.

Obviously, we cannot consider that e-commerce exchange is the perfect solution or a total failure. It seems that the answer lies somewhere in between and varies from company to company. However, we must keep in main that e-commerce exchanges offers a wide range of benefits such as streamlining of the supply chain process, time and costs reduction or new customer acquisition.

The e-commerce exchanges models have to face various challenges. As a matter of fact, they have to meet high expectations related to tight budgets and times frames for demonstrating the return on investment. Firstly, these exchanges are must be built out on new and fast valuable technologies. Secondly, in order to leverage the exchange technology, key members must change the way they do business.

It seems that the best collaborative exchanges are the ones, which are based on sustainable models. However, financial independency from the founders can only be gained through the continued support of key members organizations.

1. The three e-commerce exchange models

1.1 Public e-marketplaces

Often funded by venture capitalist, Public e-market places are independently owned and develop on-line marketplaces. These neutral e-marketplaces focus on price discovery and clearing. By listing supply and demand for specific products and services, they try to create a transparent market. In addition, the quick identification of trading partners and market pricing help to reduce the cost of purchasing information gathering. 70 percent of public e-marketplaces have either ceased operations or modified their business model.

1.2 Industry-sponsored marketplaces or consortia

Consortia are jointly developed and owned by several industry suppliers. The functionalities vary from a broad to a narrow scope. For instance, it can include supply chain forecasting and replenishment for most purchases or only product development for a single subsystem. It can also deals with industry standards. Examples: Covisint for the automotive industry and Exostar for the aerospace industry;

1.3 Private exchanges (PTXs)

Private exchanges are owned by only one industry player. It is often used to manage, monitor and therefore optimize value chain processes. Unlike consortia, in order to participate, PTXs require partners to adapt to or integrate with the owner's technical applications and/or data management standards(e.g: Boeing, DaimlerChrysler)

Sixty-five consortia have been formed since January 2000. Of the 65 consortia that have been formed, 7 have already shut down and 14 have merged or been acquired. However, the leading players in the consortia space are gaining traction. Their progress can be measured in terms of infrastructure development or degree and satisfaction of use. The capital invested, the employees hired, and functionality developed and brought on-line help to measure the infrastructure development. The equity members and non-equity members attraction, the transaction volume, and the use of the applications also helps to evaluate the success of the consortia. These metrics show the quantifiable evidence of consortia traction.

2. Industry-sponsored marketplace infrastructure:

2.1 Capital invesment

Capital committed has been under $40 million for some consortia serving narrow industry segments or with focused functionality. Investment has totaled $200 million or more at consortia addressing larger industry segments with functionality addressing several value chain processes (e.g.Covisint). With regard to the number of employees hired, six consortia out of nine employ 60 or more full-time staff.

2.2 Participant volume

It seems that the infusion of capital from new industry investors can be interpreted as a strong sign of industry confidence in a given consortia. In the past years, 10 consortia gained new equity members in the past year. In addition, many consortia have increased their base of non-equity members and participants, or users within member companies.

We must keep in mind that non-equity members are key to the success of a consortia as they ensure that buyers and suppliers want to use the exchange. In addition, it is highly valuable to give more breadth in the types of products and services traded. The transaction volume can rise as well as the number of trading participants. For instance, Covisint's member list is over 1,700.

Transaction volume varies from an industrial sector to another, but at least 15 consortia have transacted over $100 million. Among these, Covisint has transacted over $150 billion. This volume includes both indirect products like office supplies and parts that will go directly into end products. For instance, DaimlerChrysler has procured $3 billion worth of highly engineered parts for future models via Covisint reverse auctions.

2.3 Industry-sponsored marketplace functionalities

With regard to functionalities deployment, auction functionality and on-line catalogs has been launched by many consortia. The on-line catalogs took more time to bet put in place. As a matter of fact, you first need to establish product hierarchies, to clean and standardize product information. Then, you must load hundreds of thousands of stock keeping units (SKUs) for each catalog. For instance, 200 catalogs have been rolled out by Covisint.

In addition, tailor made functionalities meeting unique industry needs has been rolled out by many consortia. These tailor made functionalities include product development functionality for the auto industry or spare parts inventory visibility for the airline industry.

Industry-sponsored marketplace functionalities mainly focus on purchasing applications and on the architecture supporting the cross-enterprise collaboration. Consequently, most of the consortia provide purchasing tools such as on-line purchase order generation and routing, reverse auctions, on-line catalogs, and e-requests for proposal or e-request for qualification (e-RFx).

In addition, buyer-led consortia provide broader strategic sourcing services through industry purchasing experts. These purchasing experts help in the sourcing process from the beginning to the end. It means that they identify commodities to source, recommend and conduct an auction, an e-RFx or another sourcing event.

From the buyers perspective, Purchasing tools are creating value in three main ways. Firstly, catalogs or strategic sourcing service reduce search costs for suppliers of specific goods. Secondly, on-line purchase order generation and routing as well as e-RFx reduce the administrative costs of purchasing goods and services. Thirdly, auctions reduce time to complete price negotiations.

It seems that the purchasing tools available allow the leveraging of the aggregated volumeof purchases among multiple buyers. It allows to improvement of the purchase price. However, some consortia did not offer this service and privilege single-buyer sourcing events in order to prevent anti-trust issues.

From the supplier perspective, purchasing tools enable worldwide access to new buyers and increasing penetration with existing accounts. As a matter of fact, suppliers noted that they are enabled to win business from a new client through a consortia auction. Furthermore they often receive orders from this customer for another part. However, we must keep in mind that the benefit of increased revenues is frequently offset by reduced margins on the business won via reverse auctions.

In several industries, suppliers gain access to purchasing tools as well as the buying tools. For instance, Covisint market its auction and other purchasing tools to the automotive industry players so that they reduce their costs through reverse auctions.

From the industry perspective, the value of architecture is created through shared systems development and management costs such as portals. It also reduced communications costs such has data and communications standards. In addition, system integration helps to reduce purchasing and value chain processes administrative costs.

Some consortia went beyond procurement and architecture functionality. For instance, Aeroxchange developed a tool, which allows to share inventory visibility among airline industry players. This "visible inventory" reduces both administrative costs and the time required to find parts dedicated to maintenance. Therefore it helps to decrease flight delays and helps to identify spare parts required for routine repair and maintenance. With regard to internal inventory, Aeroxchange enhances inventory management through the reduction of holding and obsolescence costs. In addition, companies are enabled to sign agreements related to the sharing of their inventories.

It seems that Industry-sponsored marketplaces development plans are mainly focused on the key industry pain points. Industry pain points can be described as the processes, which have significant impact on costs, quality, or value of the product. As a matter of fact, these specific pain points should be solved efficiently through industry collaboration.

3. Private exchanges structure and functionalities

3.1 Private exchange structure

While the consortia results and accomplishments are covered, private exchanges do not reveal such information. However, we can say that at least 25 percent of the Fortune 100 companies have built, or are building, a private exchange. In addition, a survey conducted by AMR Research revealed that the average cost to build a private exchange was of $83 million for Fortune 500 companies. Considering the economic context, this cost should appear as too huge. However, it must be considered in relation to the breadth and depth of functionality that these firms are developing.

The private exchange development varies a lot from one exchange to another as it depends on the type of processes being addressed and the size of the owner. In addition, some private exchanges are brand new and others were put in place ten years ago.

Private exchange functionalities have allowed companies to create an advantaged cost structure while changing the rules of the game in their industry. It seems that private exchange functionalities are suddenly on the schedule of both large and small companies.

Large companies are frequently undertaking functionality addressing several value chain processes. DaimlerChrysler, for example, is developing tools to address procurement, product development decision support, and supply chain networking with multiple tiers of its supply chain.

3.2 Private exchange functionality

Obviously, the functionalities provided by private exchanges are more diverse. Most of the private exchanges build procurement tools or tools dedicated to other value chain processes.

It seems that the procurement tools developed by private exchanges are similar to those developed by consortia. Usually, these tools are eRFx, e-catalogs, auctions or data mining. However, we must keep in mind that instead of cross-enterprise opportunities, these tools leverage individual organization opportunities. They usually go beyond the tools put in place at consortia but the costs are not shared. They vary from one company to another, they are often dedicated to value chain processes such as product development, supply chain network integration or sales and marketing

3.3 Private exchange value creation: the DaimlerChrysler supply chain network example

As the automotive industry supply chain involves hundreds of suppliers, its management is challenging. The Tier 1 suppliers are the ones who have direct relationships with the OEMS. The other suppliers have indirect relationships with the OEMS, they supply products to the OEM through other suppliers. Consequently, the automotive supply chain can imply four levels or more of tiers for some subassemblies.

With regard to forecast, suppliers situated at different levels within the supply chain receive different amounts of forecasted demand information at different times. For instance, Tier 1 might receive weekly forecasts with 12 to 15 months of monthly demand information and 5 to 6 weeks of weekly demand information from DaimlerChrysler. Obviously, this information is not immediately passed on to lower-tier suppliers.

As the supplier has to deliver its orders on time, he might hold extra inventory of both raw materials and finished product in order to met DaimlerChrysler demand fluctuations. This inventory results in higher costs and implies risk of obsolescence as the customer preferences might change. In addition, the supplier might schedule overtime and incur incremental equipment changeover costs due to late changes in the production schedule. In order to get the product faster, the supplier might also use expedited freight.

DaimlerChrysler's forecast is changed from a number of cars of specific makes and models, to part numbers and metrics that are meaningful to each supplier (such as yards of a particular seat fabric). Considering the supplier situation, DaimlerChrysler worked on the development of a software, which translates its weekly demand forecasts to the requirements of each supplier of its supply chain.

This translated forecast data can then be sent out to each supplier in the company's supply chain at once. Development and implementation of this supply chain networking functionality has many complexities that must be overcome before it can be launched to the entire supply chain. To date it has been piloted with three supply chain segments. However, the opportunity represented by this functionality could yield a significant savings per car. Based on this opportunity, DaimlerChrysler continues its development and piloting efforts in supply chain networking.

4. Choosing between Industry-sponsored marketplace and private exchange

Even if the tools developed by both consortia and private exchanges do overlap each over, it is necessary to identify the most appropriate tools. As a matter of fact, it seems that Consortia are more appropriate when it is possible to leverage technology costs across companies in a given industry. In addition, they better suit companies when cross-enterprise collaboration is needed to capture one given process benefits such as airline spare parts inventories, collaborative planning or forecasting.

Private exchanges are more appropriate when the company benefit from a competitive advantage such as Boeing's product development functionality. Private exchanges must also be considered when there is no consortia put in place or when the consortia does offer the desired tools such as DaimlerChrysler's supply chain networking tool.

4.1 Sustainability of Industry-sponsored marketplaces and private exchanges

Industry-sponsored marketplaces and private exchanges seem to be both sustainable. As a matter of fact, consortia and private exchanges have developed or develop value-creating and customer-ready functionalities. However, the success of these functionalities greatly depends upon the ability to gain participants adoption and value demonstration.

Three key factors support the case for the sustainability of industry-sponsored marketplaces. Firstly, the industry players must consider that industry-sponsored marketplaces will create functionality vital to the future of their industry. Secondly, industry-sponsored marketplaces have learned from the failure of the public e-marketplaces and should not make similar mistakes. Thirdly, industry-sponsored marketplaces are morphing their models to respond to market requirements.

Industry-sponsored marketplaces can be considered as cheap as a group. They usually focus on few key products in order to control technology costs. They often hire more staff after the implementation of the exchange in order to gain incremental revenues. The industry and systems expertise developed combined with close partnerships with customers, results in tailored made functionalities. Industrysponsored marketplaces learned from the public marketplaces that they must control the burn rate, create real value while minimizing the disruption brought about by change.

It seems that two years ago consortia were reduced to off-line buying groups which only purpose was to aggregate the purchase volume of several companies and then negotiating better pricing from suppliers. Today, several consortia, including Covisint, do not aggregate purchasing volume across.

As consortia main goal is to meet its client requirements, they did not adopt an inflexible business model, but rather what we can call a morphing model. As a matter of fact, they are setting the product development plans, which are meeting their member needs. They also adjust their pricing models, tailor customer service processes and levels to the requirements of buyers and suppliers. For instance, Covisint develops and maintains broader functionality dedicated to several value chain processes which are critical to the automotive industry.

Even if private exchanges are developed and managed by large and powerful companies, that does not grant success. As a matter of fact, private exchanges have to compete for capital, best people and the top management support. They must also have enough time to demonstrate the return on investment and value created.

It seems that, development costs of the more complex functionality should be covered by the savings obtained through the purchasing functionnality (e.g reduced prices through auctions, reduced administrative costs from catalogs, automated process flow tools). However, the cost savings appear in the budgets of the business units purchasing goods while development costs fall into the e-business organization's cost center. Consequently, it is still difficult to demonstrate that these savings cover the development costs of a complex functionality.

In order to survive, private exchanges must create value, ensures the top management support, partner with business unit managers to drive internal and external adoption. They must also make sure that they continue to meet the needs of the business units

In order to justify embarking on an investment in exchange functionality, either through a consortia or internally through a private exchange, it is critical to understand the value-creation potential of an exchange. It is impossible to outline a specific set of instructions for this assessment, as exchanges vary as much as the companies and/or industries they serve. We can, however, outline the key issues that must be addressed in such an analysis.

Understanding of the value-creation potential of an exchange is key to both consortia and private exchange. Firstly, it is essential to determine to which processes the exchange should be dedicated. Then, it must be showed that the exchange addressed the process in the best manner. Secondly, value metrics must be provided. Thirdly, a comparison must be made between the value provided and the development and management costs of the exchange. This demonstration must help to evaluate if the exchange represents a profitable investment opportunity.

4.2 Identification of the processes to be addressed

In order to find out the value of an exchange, it is essential to understand what value chain processes it will address. The above scheme outlines the value chain processes that exchanges can address. It also gives a list of the key value chain processes and sub processes that exchanges may be dedicated to. When the company wants to join one existing consortia, it is easy to determine if it meets the value chain processes. Indeed, the consortia provides some existing functionality and a development plan for future tools.

When creating a consortia or a private exchange, it is essential to define the processes that should be addressed through the exchange. At first, purchasing should be considered as it is a key process, which does not require significant industry customization. As a consequence, purchasing tools can be chosen quickly and installed. Then, they can generate savings that can help to fund further exchange development.

Identification of the key industry's key pain points helps to identify other processes.(see the above scheme). Pain points should be defined as the process, which significantly impact costs, quality, or product value from the customer point of view. For instance, Aeroxchange address a key pain point of the aerospace industry, as the industry holds 55 billion dollars in inventory. Aeroxchange allows spare parts inventory visibility. It facilitates the finding of the right part faster for unscheduled maintenance. Thus, it reduces administrative costs of finding and required inventory levels. Therefore, airlines are impacted by Aeroxchange as if maintenance is quicker, the number of delayed and cancelled flights decrease.

When the processes are identified, it is essential to determine how well the processes can be addressed. We can say that companies must evaluate the scope of this assessment. First of all, the company needs to know if the consortia or software address the complete value chain or only narrow segments of the process. If the consortia or software address only narrow segments of the process, it is important to know if it addresses the industry pain points. In fact, few companies provide tools which address all the aspects of a given supply chain process. However, it does not mean that the available tools are not valuable. It means that the first stage is to focus on the most important components of the process and then to build out functionality over time.

It is also important to consider how well the consortia or software chosen address the process or subprocesses. In fact, most of the software available have been developed with a generic manufacturing industry in mind. Consequently, the software available must be considered as a starting point from which companies can develop their solutions. That is the reason why the functionality assessment should be detailed enough to identify the gaps between the tool and the deployment which should be created by the user. For instance, Aeroxchange was obliged to work with Oracle in order to incorporate the needs of the

airline industry into the Oracle inventory management software. Indeed, Aeroxchange needed to provide data on the part, its location, its owner and its condition (new, refurbished, or requiring repair).

4.3 Value metrics to be adressed

In order to evaluate the value created by an exchange, it is essential to understand the value of creation levers. The value levers, which can be addressed by the exchange include revenue, costs, assts, risk, cycle times, quality and customer services.

To assess the value created by an exchange, companies must identify the functionality provided or to be provided in terms of the value chain processes and sub processes. Then, for each sub process, companies must identify the value creation levers that will be addressed.

For instance, a reverse auction tool will address "establish terms," a sub process of the sourcing process, by allowing a company to request bids from suppliers and receive bids resulting in a final offer at the end of the auction period. In addition, the tool will help analyze the bids as well, though the degree to which the tool can accomplish this depends on its ability to incorporate non-price variables (product quality and functionality, delivery time, payment terms, etc.) into its ranking of suppliers.

Additionally, the auction tool can be expected to address the cost lever - reducing the purchase price of goods through increasing supplier competition - and the cycle time lever - reducing the time it takes for price negotiations to be finalized. To quantify the value of the auction tool, it is necessary to estimate the impact on each of these value creation levers. Savings in the range of 2 to 85 percent have been reported on reverse auctions. Spend categories have been auctioned without achieving savings as well. A reasonable approach to quantifying this value would be to assume for a spend category that your organization has not yet auctioned and plans to, that savings would approximate those achieved by other companies who have used the tools to source the same or similar spend categories.

Additional savings from the short cycle time of negotiation could arise from reduced use of procurement function resources or on-time delivery of a commodity that would otherwise be late and cause production downtime. Savings of this type should only be included in analysis if there is a reasonable likelihood that they would be avoided through use of the tool.

Once the Sources of Value Framework has been used to estimate the value of each exchange tool, you are ready for the next step in assessing the value of the exchange - comparing costs to benefits.

4.4 Comparison between the development and management costs

The costs of the exchange include:

- Software purchase and/or development, - Systems integration,

- Project management,

- Staff training

- Change management costs.

Software and/ or development costs are obvious. In addition, in order to transfer information from ERP or legacy systems, systems integration costs are need. In order to ensure the exchange development project management costs are also required.

Training costs are important as the staff must learn how to use the tool. They must also understand the benefits of the tools in order to change their work procedures smoothly. Change management costs should include internal and external communication. The communication campaign must present the benefits of the exchange, the analysis and the implementation steps required to transition processes. As change management is a real challenge, it must not be underestimated.

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The above list of costs should help to identify the key cost components. Obviously, this list is not exhaustive. For instance, private exchanges will need to consider the costs of getting suppliers on board and subsidizing their systems integration until they buy into the exchange's value proposition.

4.5 The best practices

· Change process: the compulsory partnership

In order to successfully manage the adoption of exchange tools by companies or within an industry, leadership, communication and implementation are essential. To that purpose, a partnership must be built between the exchange, investor executives, and trading partner executive. This partnership should allow to get the vision of the most appropriate tool, its adoption and usage. Thus, it requires a clear, broad and targeted communication on the exchange objectives and successes. Detailed implementation planning and execution must be done, both within the exchange and between investors and trading partners. Active members must believe that improving supply chain efficiency and effectiveness is critical to their firm's longterm competitiveness. The CEO needs to communicate this vision internally within his or her organization and externally to suppliers and the broader business community. Once the vision has been communicated, the CEO should set the expectations within their organization that exchange functionality will be leveraged as much as possible. The exchange should be used regularly rather than selectively, unless there is a compelling reason not to use it. Lastly, the CEO will need to approve exchange funding due to the magnitude of the investment.

The next set of partners that consortia and private exchanges should seek is senior management. Functional and business unit senior executives have several rolls in managing the change process. They should reinforce the CEO's vision that the exchange is key to the company's competitiveness, and they should extend this vision into concrete goals and guidelines for exchange use. Goals can be in terms of transaction volume managed by the exchange or the number of employees who should be given access to use the exchange for purchasing or other functions. Formal guidelines should be developed to prescribe use of the exchange for functions that can be executed through its tools more efficiently than through offline or through other tools. Incentives for both executives in relevant roles and other personnel within functions impacted by exchange tools should reinforce the outlined goals.

Senior management must also play a key role in change management. In order to drive participation, senior management should use its personnel networks both within and outside the organisation. Internally, managers should be reached out in order to ensure that they understand exchange plans and functionality. Managers must also be actively involved in the setting of tool requirements and improvement opportunities. Outside the company, senior executives should communicate on the value created by exchange tools.

It seems that the senior executives must sit on the board of the exchange in order to be highly involved in the development and evolution of the exchange. As a matter of fact, they are responsible for the function that the exchange is enabling. Consequently, they are able to set development priorities and provide high-level functionality requirements. In addition, they are directly able to ensure that exchange tools are used by their organization.

In order to ensure that implementation plans are rolled out effectively, middle-management level must be highly involved. The middle-management level should help to map out the impact of exchange tools on the current processes and operations. This input is critical as it should help the exchange team to detail the tool requirements and therefore plan the necessary organizational changes. Consequently, we can say that the exchange team partnership with middle management is compulsory.

· A solid business model

Obviously, Consortia must adhere to basic business rules. However, we must underline that the previous public e-marketplace business model was to spend equity fast in order to achieve growth and boost IPO valuations. As this model is no longer in practice, consortia must develop a solid business model, which meet the needs of the investing companies and trading partners.

In order to meet investor needs, the consortia must develop appropriate tools, add value beyond the tools and provide quality customer service. To that purpose, members should shape the planned functionality portfolio, the development road map and the key requirements for each tool. The members of the consortia or the corporate senior members should follow sessions focused on this issue in order to list their requirements. Indeed, it should ensure that the tools put in place meet the needs of the organizations. In addition, work sessions with suppliers should help to identify key functionalities from the supplier perspective. These various points of view should ensure a timely implementation and adoption of the tools.

However, in the case of less complex functionality or specific solutions, it is not necessary to acknowledge the opinion of all the members. The decision making process should be speed when the number of points of view is reduced. For instance, a sourcing event based on the spend of 4 to 6

participants may not achieve the purchase volume that a broader group purchase would, but may facilitate developing a more narrow set of specifications for a bid. The savings can still be significant, and furthermore, demonstrated savings from aggregated sourcing events can be replicated for other members.

· Adding value beyond the tools

The automation of processes and the transparency of information provided by both consortia and private exchanges result in greater efficiency and effectiveness of the value chain activities. Thus, they create value. That is the reason why exchanges have recruited functional, industry and systems experts. To that regard, it seems that consortia can leverage their expertise in order to generate incremental revenue beyond the tools and round out their service offerings. For instance several consortia complement auction and eRFx tools with strategic services. To that purpose, sourcing industry experts were hired. They were enabled to determine the most appropriate spend categories through the understanding of the supply markets for identified categories. They finally recommended the best sourcing event, which reduce the total cost of the category.

Exchanges have also developed systems groups with knowledge of the industry's systems and how to integrate them with other systems. The systems groups expertise was used to "productize" the integration process to enhance margins, and to provide consulting on a broader range of industry systems issue. As revenue generation is not the key goal of private exchanges, adding value beyond the tools remains important to ensure that business units and trading partners have the support they need to implement exchange tools.

· Customer service

Customer service is essential as it can drive the adoption and the transaction volume. It includes training, help desk, systems integration and "consulting" services. Training implies the creation of selfguided on-line modules, FAQs and on-site product overview sessions. The help desk must provide responsive support. It means that it must provide consistent quality in handling basic questions. Systems integration must ensure that both buyers and sellers are brought on-line in a coordinated fashion. In order to back up the other elements of customer service, deep functional, industry or systems expertise is needed.

· Focusing on the value proposition

In order to create value and to drive adoption, the exchange must focus on the needs of both buyers and sellers. This focus is even important for private exchanges as the trading partners who have an expertise of the processes organization might ensure that the exchanges tools create value and drive out cost.

Providing security of pricing information, non-public trading relationships and easy integration into the exchange are the basic ways to provide value. They are compulsory when it comes to gain the participation of trading partners.

Lastly, pricing should be in line with value capture. If the investors will capture most of the benefits of current exchange tools, they should pay for most of the costs. Many exchanges are charging trading partners little if at all for either tool usage or integration (via a low-cost means such as browser). In addition,

exchanges often provide value-added tools for trading partners. For instance, they might encourage suppliers to use auction and eRFx tools to reduce their costs.

· The burn rate management

In order to manage the burn rate, many exchanges focus on a portfolio of functionality rather than trying to cover the entire industry supply chain. They consider a few key tools, which were essential across their membership base, their firm and the trading partners. They also make a balance between the tools, which allows "quick wins" and "big wins".

As a matter of fact, quick wins such as auctions and eRFx generate near-term member value, adoption and near-term revenue. Unlike "quick wins", "big wins" are important tools which often focus on the industry pain points. As well as quick wins they drive substantial value but they take longer to develop and roll out. The balance between quick and big wins is essential as they complete each of other. "Quick wins" revenues should fund day-to-day operations and the more complex technology development. "Big wins" should create value for the participants and sustain value beyond the impact of the "quick win" tools.

In order to manage technology costs efficiently, it is also interesting to partner with the best technology provides. They can help to bring the products live faster through leveraging pre-existing tools.

Control of the burn rate also implies the control of the costs of integration. Most of the consortia managed it through the development of a portfolio of integration options such as browser-reliant or full-scale system integration. These integration options are essential as they drive both trial and adoption. As a matter of fact, suppliers are not willing to pay for full integration when they participate to an auction. In addition, consortia members often want to try some basic functionality before committing to the cost of full integration. However, founding members in the need for specialized tools will want deep systems integration, which allows to capture greater functionality and cost savings.

Staffing costs is part of the burn rate control. It is quite difficult to control these staffing costs while creating and quickly rolling out multiple tools. That is the reason why a clear strategy must be put in place. This strategy must focus on near-term functionality objectives meaning that the staff must meet these needs quickly and efficiently. The staff must be hired in response to revenue growth and not in preparation for it.

· Review of the internal processes

Review of the internal processes and reengineering of these processes must be done before the implementation of an exchange. As a matter of fact, process efficiency can not be reach if exchange tools are supposed to leverage internal processes.

For example, DaimlerChrysler's pilot supply chain management tool does not simply distribute forecast information to Tier 1 suppliers, replacing and enriching the information previously sent via EDI. It simultaneously sends forecast information to suppliers throughout the supply chain. This process change addresses the delays that occurred at each stage in the supply chain and limited the quality and timeliness of information received by lower-tier suppliers.

For instance, DaimlerChrysler had to work with the suppliers piloting this tool to develop the suppliers' processes for using this forecast information. The use of the forecast information is a challenge

because while the forecast could help the suppliers to order materials earlier and schedule operations more efficiently, DaimlerChrysler may only account for 5 percent of the suppliers' sales and other customers do not provide similar forecasts. While process reengineering is not easy, it is vital to creating step function improvement in the key metrics.

According to the above demonstration, it is obvious that consortia and private exchanges create value. The range of opportunities offered by the exchanges is wide and consistent, it can highly impact an organization's bottom line. However, organizations must keep in mind that exchanges require substantial resources in terms of planning, execution, and continuous development.

5. Concrete example: the aerospace exchanges solutions

During the past several years, B2B Web-based operations have evolved from simple sources of supplier information to online marketplaces, with many buyers and many sellers, all focused on the industry's offerings. Exchanges were designed to match those buyers and sellers more efficiently and to lower their overhead costs via paperless operations.

The proliferation in recent months of business-to-business (B2B) exchanges for the aerospace industry is symptomatic of the growing interest in Web-based marketplaces that link buyers and sellers directly,. On the other hand, B2B exchanges are increasingly becoming tools to achieve specific corporate goals--such as increasing sales, improving customer service and cutting back on excess inventory. E- commerce is supposed to eliminate non-value-added activity. According to the chairman and chief executive officer of the Boeing Company, electronic transactions translate into a 25 percent surge in productivity.

5.1 Exostar, the BAE Systems, Boeing, Lockheed Martin and Raytheon emarketplace

Boeing comprehended more than 20 disparate procurement systems operating independently in over 50 global sites and over 8,000 worldwide trading partners. Furthermore, millions of transactions were conducted annually through EDI and XML technologies, and more than 40 unique supply chain and financial business processes. That is the reason why Boeing required a comprehensive, secure and highly scalable integration solution. To that purpose, Boeing conducted a detailed analysis and evaluation of whether they should develop middleware as a core competency or outsource to a third party with an established competency. They finally choose to launch Exostar.

BAE Systems, Boeing, Lockheed Martin and Raytheon, which are among the world's leading aerospace and defense manufacturers are known to be tough competitors. They collectively have more than 37,000 suppliers and $71 billion in commercial and government sales. However, facing the growing pressures of market globalization and cost reductions, it became clear that the aerospace industry was in the need for a mechanism to share costs and facilitate higher levels of collaboration to boost efficiency and effectively compete. Consequently, the foursome later joined by Rolls-Royce, launched Exostar, an electronic business-to-business marketplace for trading everything from jet engines to wing assemblies to paper clips.

Owned and operated by the five founding partners as a separate company, Herndon, Virginiabased Exostar provides a secure yet open environment for trade and collaboration, yielding transactional efficiencies and supply chain synergies.

Through Exostar, vendors can provide computer-aided drawings or other documents to prime contractors. For the supplier, Exostar eliminates the need to establish a separate conduit for each team member. For the prime contractor, Exostar provides a space to collaborate with suppliers outside its own firewall.

Operating as a managed service, Exostar's solution encrypts a document so that it can be opened only by those who hold its encryption key, usually the integrator and the collaborating suppliers. Conversely, only Exostar itself has access to the logs of who opened what material, so the paper trail cannot be compromised. Identities of participants are verified through an independent managed public key infrastructure service from VeriSign Inc., Mountain View, Calif., according to Jeff Nigriny, Exostar's chief security officer.

Exostar maintains detailed background information on each user and a 1 2-month record of every file being accessed, what changes were made, by who and allows no one person or company (even at Exostar) to have complete access to all the data.

To create this highly secure environment in real time, Exostar's Herndon, VA.-based staff turned to Needham, Mass.-based PTC for its collaboration system--the underpinnings of the site. It hired @stake, a security company to incorporate additional security. Exostar also licensed security software from a number of vendors including Netegrity, which authenticates who the participants are; Webex, which offers Web

conference systems based on secure socket layer; and eVincible, which encrypts data as it travels between networks and while it is stored on a server. It turned to Symantec to protect its network from viruses and it enlisted the services of Maven, a company which continually fakes hacker attacks into the system looking for weak points.

Rolls Royce, which won the contract to build the Trent 900 engine for Airbus's new 550-person A380 jet liner, recently put Exostar to the test. It used Exostar's electronic collaboration service so that its engineers could share CAD patterns and project management systems with other design engineers at Fiat-Avio, Goodrich Corporation, Hamilton Sundstrand, Honeywell, and Volvo.

When the project began, Rolls Royce appointed a manager who logged onto the system to start a session. Then, Verisign verified the project manager's identity and authority to work on the project. Verisign gave the project manager a password and a digital certificate--a type of cyber passport to verify online identity. The certificate resided on the manager's computer so it was only possible to access the system from that computer. The manager then invited others to join the project and he specified the level of access to which each user was entitled.

Once that was completed the partners were ready to share information. While the engineers--located from Derby, England to Chandler, Arizona--worked on the same document using their personal digital certificates for verification, the file itself was encrypted with a 128-bit key.

After the session ended, the file was then sent to Exostar's data center, which provides high levels of physical and network security. Then, when another project member wanted to access the file for revisions, it was encrypted again before traveling over the Internet to his desktop, where it remained encrypted until the engineer with the authorized key opens it.

Indeed, today Exostar has over 11,000 members who think it's worth it. RRob Savidge, the chief engineer for the Rolls-Royce Trent 900, estimates that by collaborating over the Web, Rolls Royce saved as much as 60% on its travel budget, reduced project management errors by up to 50% and cut the product development cycle time by up to 40%. And so far, no break-ins.--Niall McKay

Exostar architecture is open so that the members can join without extensive investments in internal technology and processes. In addition, sensitive information is encrypted, according to industry standards Electronic auctions is one option available to the exchange users. Consequently, small businesses are enabled to register and make their products available to everyone who is connected. One of the Exostar objectives is to make suppliers participating as active community partner, to enhance competition and to develop opportunities for small businesses. As it is best to have as many companies as possible, Exostar does not impose any exclusivity requirements on companies wishing to do business on the site. From the supplier perspective, Exostar represents the opportunity to get into the aerospace market. As a matter of fact, as soon as the supplier products meet the government certification requirements, the supplier is eligible to participate in Exostar. As small manufacturers which are producing unique and specialized items do not have a lot of visibility, they should benefit from e-market places.

Boeing also created the eBuy Program which enables the aerospace supply chain to align itself with Exostar. First of all, all the players (e. g Boeing employees, suppliers, partners) benefit from a significant reduction of paper use through the use of the new Web-based products. For instance, the Boeing Commercial Airplanes unit expects the saving of 10,000 feet of paper per year after the full implementation of all the e-business activities.

SourcePass is the Exostar online auction system dedicated to procurement transactions. In 2002, SourcePass helps Boeing business units to realize an average savings of 32 percent over traditional negotiation techniques.

The Enterprise Supplier Portal, which belongs to the eBuy program is a secure business-tobusiness Web site. It allows suppliers to get information quickly and efficiently. Consequently, it reduces costs and increases productivity. 18,000 suppliers can access the portal.

Transaction Services allows the information to move faster and more efficiently between Boeing and its suppliers. This data "pipeline" manages the incoming and outgoing information from 22 business systems which support supplier management and payment processes.

SupplyPass consists in a paperless purchase order. It allows the suppliers to receive, acknowledge and manage the incoming orders. Consequently, Boeing procurement groups are enable to avoid the delivery of "hard copies" (paper copies) and therefore to reduce the cost of delivering procurement transactions.

ForumPass is a Boeing Supplier Web-based virtual team room. It allows to streamline communication and therefore to reduce variability and cycle time. For instance, the Boeing 7E7 used ForumPass during the beginning design phase of an airplane

The Boeing Enterprise Supplier Tool is a single source of enterprise supplier data. It includes information such as the diversity reports (addresses, contact names...), reports (payment, diversity reports), corporate agreements and data analytics.

It seems obvious that the Boeing eBuy program highly impacts the aerospace procurement employees and their work processes. All the tools described above allow Boeing and its suppliers to develop new business models. These new business model goals are to simplify tasks, to increase productivity and to standardize. As a matter of fact, this is resulting in the evolution of the "old procurement process" which was considered as complex, fragmented, cumbersome and costly. To that purpose, Boeing hopes to reduce significantly its 18 procurement systems to only four or five.

Over the years, Boeing's four major businesses have built different procurement systems which were using different software. Boeing's business units connection with its various suppliers was a kind of messy spaghettilike tangle of lines. Instead of one unilateral replacement, Boeing decided to perform a measured connection to Exostar. This Exostar connection plan use XLM-based standards.

The access to Exostar simply requires a browser, Internet connection and a security password. This easy access presents several advantages for both Boeing and its suppliers. From the Boeing perspective, it provides links to legacy system and cut the number of procurement system. In addition,

through the use of a supplier profile database, Boeing is allowed to do the strategic evaluation of supplier data.

As Exostar uses XML rather than complicated electronic data interchange (EDI) formats, more suppliers can access the exchange at lower cost. Unlike XML, EDI are expensive as they require suppliers to put money into the batch. XML only requires the use of a browser. Using Exostar and XML, different units of Boeing can use the same interface to connect to suppliers. Accounting, inventory, shipping and racking systems all benefit from the XML use

5.2 MyAircraft.com

The aerospace industry has inventories worth about $50 billion, mostly in spare parts. But the annual demand for new spares and repairs amounts to about $30 billion. Consequently, Inventory improvement is one of the main motivation when joining an exchange.

One of the most viable competitors emerging today is MyAircraft.com, launched by industry powerhouses United Technologies Corp., Honeywell, and i2 Technologies. These firms collectively have about $25 billion in annual revenue. Like Exostar, MyAircraft.com is an independent company created to provide an electronic exchange for airlines, manufacturers and suppliers aerospace after-market parts and services. The BFGoodrich Company recently announced it will became a partner.

MyAircraft.com site offers products from parent companies United Technologies and Honeywell. But new capabilities will be added for supply chain management and technical data handling. The site will earn revenues from transaction fees and technical publication subscription sales.

It is important to note that neither Exostar nor MyAircraft plan to impose exclusivity requirements to companies wishing to do business on their sites.

5.3 Exostar and MyAircraft potential risks

In order to gain the participation of other companies, Exostar and MyAircraft promote the openness of their systems. They do not want to be perceived as exclusive clubs. However, other industry players consider the risk of anti-trust issues if some companies find out that access to certain exchanges are restricted. To that regard, Exostar argues that the system was secured through legal advice. MyAircraft considers that its main objective is inventory management and the automation of supplier-buyer transactions.

Other industry players think that there is much more to achieve growth in the industry than having an e-market place or other kind of Web sites. For instance, Messier-Dowty (SNECMA Group) as a Web exchange dedicated to selling parts and a larger site dedicated to electronic business transaction. The Messier- Dowty company uses Internet as a customer-service tool but does not view the Web exchange as an increasing sales tool. They still believe in the face-to-face contact, meaning that if you do not meet the customers in person, you loose market-share. From that perspective, E-business is just a tool.

5.4 The GE Aircraft Engines position toward Exostar

One of the industry's most prominent firms has already experienced success with its own e- business site. General Aircraft Engines has assigned 300 employees to the Web Center. The airlines or maintenance shops which would like to gain access to the Web Center must be pre-approved by GEA. The pre-approved companies can buy spare parts, research technical publications and remotely diagnose the condition of specific equipment. It means that they can receive information on the status of an engine while the engine is in flight.

While the Customer Web Center performs the "selling" function, GEA has a Supplier Web Center for its 1,200 suppliers. As the "buying" side of GE's Web operation has automated many tasks, about 200 positions in the purchasing department were thus eliminated.

Having 1,200 suppliers on the supply chain Web Center allows GE to do forecasting, scheduling, part shipments, drawings, quality control documents. GEA was used to spend a million-and-a-half dollars shipping blueprints to customers. Now, they pull drawings off the web and print them out themselves. When there is no value added in a task, you can automate that and eliminate people associated with it.

GEA also plans to launch a site for military customers. Military customers will have access to spare parts, product support and component repair status. Even if most of the content material on GEAE's sites is proprietary or sensitive, they do not have any top-secret information on the Web. However, commercial and military customers have their data stored separately and cannot access that data unless they are authorized.

GEA decided not to participate in Exostar. As a matter of fact, the volume of the GE company as a whole is as big or bigger than the volume of the Exostar founding members combined. In addition, while concentration in aerospace may cause antitrust issues, there will be no antitrust risk by combining the GE companies.

Furthermore, GEA does not want tot get tied up with five companies in a big bureaucratic structure. As GEA belongs to a 120 billion dollar company, it has got enough leverage, focus and expertise to drive its own e-marketplace.

From the GEA perspective, participating in Exostar would mean to source the same goods and being charged the same prices by vendors. Sharing purchasing power with other companies should lead to a competitive advantage lost. With regard to cost control benefits, GEA estimates that they do not need it from Exostar as they already have their own cost control.

According to GEA top management, the aviation and aerospace industries challenge is to better manage the interface between product manufacturers and the airlines themselves so that the customers get more benefits and gain productivity.

As every company is affected by what other exchanges are doing, the development of standards throughout the B2B exchange universe will be a top priority. There are all kinds of exchanges which all tackling it from different perspectives. GEA wants to stay GE-branded, give its customers state-of-the-art functionality and be fast to market, building de facto standards.

GE's status as one of the world's three major engine manufacturers means that, no matter what exchanges are out there, GE will be a player. Obviously, exchanges which are becoming intermediaries, cannot survive without GE. Consequently, there is no rush for GE to get in these exchange but they won't allow these exchanges to take over their relationship with their customers.

GEAE's top competitor, Pratt & Whitney, is affiliated with MyAircraft.com. Pratt & Whitney is owned by United Technologies. The third major engine maker, Rolls-Royce, announced it is launching an e- business portal called "aeromanager," which will provide tailor-made fleet management solutions to the aviation industry. The portal is a joint venture with San Diego-based Science Applications International Corporation.

It is unlikely that all the exchanges currently in business will survive in the long term. For instance, one of those exchanges, AviationX, appears already to have folded. Phone calls to AviationX offices in Arlington, Va., were not returned.

Some aerospace industry players believe that there is no room in the industry for more than one exchange, but that there will be dropouts as time goes on. Another exchange that was scheduled to begin operations in the summer of 2000 is Aerospan.com, an e-business site for the aviation transportation industry. The company predicted it would help boost airline profitability by 26 percent.

PART III: Quality and e-commerce, control and

enhancement of the supplier performances

With the continuing popularity of the ISO quality management system on a world-wide basis, more sector specific quality management systems are using the ISO 9001:2000 as a basis for their sector specific requirements. This trend has highly impacted the aerospace and automotive industry. The aerospace industry developed AS9100 and the automotive industry the ISO TS 16949 which both use ISO 9001:1994 as the foundation of their specific industry requirements

The nature of an organization's relationship with its suppliers has dramatically changed. As companies focus on their core competencies, outsourcing and co-development are on the increase. These changes have created a need to increase visibility into supplier quality and improve supplier accountability. Some of the best practices employed include:

- Supplier-specific approval workflows

- Providing comprehensive visibility into supplier quality issues

- Performing root cause analysis

- Contract Compliance

- Implementing corrective actions

- Charging cost of poor quality back to the supplier

1.Why quality is such a crucial stake?

In manufacturing, quality is the concept of making products fit for a purpose and with the fewest defects. Many different techniques and concepts have been tried to minimize defects in products, including Zero Defects or Six Sigma.

The purchase of intermediate products highly impacts the efficiency of the productive process and the value chain of the buying company. That is the reason why quality of the parts bought, the design specifications and the overall reliability of the selling company are crucial.

This is why direct purchases generally involve long-term relationships and not the type of 'faceless' exchange that e-commerce is supposed to make possible since most business transactions are not anonymous. Some sort of face to face (F2F) exchange would then be involved here too, for basically the same sort of reasons as mentioned earlier: if information and communication technologies (ICTs) decrease the cost of conveying and treating information, they do very little when it comes to decreasing information asymmetries. This is why it is sometimes said that the Internet will be used to deepen already existing business relationships between companies rather than to create new ones.

1.1 The certification process: a quality communication mean

Certification can be made by third parties or by contractors themselves, in which case the implications for competition differ accordingly. Whereas, for business to consumer (B2C), certification is

necessarily made by a third party because the individual consumer cannot afford to pay the cost of certification, both possibilities exist for B2B. Which option will be chosen depends on the market.

Certification by the contractors

Large contractors certify their own subcontractors: they express minimum quality demands in order for the subcontractor to be allowed to bid Firms and Suppliers for online tenders. This actually enables the contractor to have more control on the subcontractor, in order to extract more rent. This process also favors the establishment of long-term business relationships through repeated contracts.

Certification by third parties

There also exist more public ways for quality certification. The primary goal of certification is to give public information about a company to other companies, which could consider doing business with the former. Third parties may step in to certify that the company fulfils some previously specified quality demands.

Concerning industrial norms, the International Standard Organisation (ISO) proposes a set of industrial norms, such as the ISO9000 norm.6 This norm is meant to be applicable to all firms, irrespective of the industry or the size. Of course, some industries have developed specific norms in order to specify more precisely the quality requirements, but these norms complement the ISO9000 norm rather than substitute it. Obtaining the ISO9000 certificate means fulfilling a set of quality requirements established by the ISO. It is in general a lengthy (12-18 months) and somewhat expensive process.

1.2 The ISO norms in the industry

The development of ISO9000 certification has been rapid in most developed countries over the 1990s). The increasing trend is almost universal, but one may notice some persistent international differences, which are most probably related to industrial structures (average size of firms, etc.) as well as differences in the pattern of information diffusion. The value chain is ISO certified at each step.

The International Organization for Standardization (ISO or Iso) is an international standardsetting body made up of representatives from national standards bodies. Founded in February 23, 1947, the organization produces world-wide industrial and commercial standards.

While the ISO defines itself as a non-governmental organization, its ability to set standards which often become law through treaties or national standards makes it more powerful than most NGOs, and in practice it acts as a consortium with strong links to governments. Participants include one standards body from each member country and major corporations.

ISO documents are copyrighted and ISO charges for copies of most. ISO does not, however, charge for most draft copies of documents in electronic format. Although useful, care must be taken using these drafts as there is the possibility of substantial change before it becomes finalized as a standard.

An important facet of the ISO norms is that they seem to act as an endogenous sunk cost. It means that it is not just one set up cost that remains the same forever and that firms simply have to pay to enter the game. It is in fact a cost that is rising endogenously, as more entrants apply for entering the game. At a first stage, the principal tends to impose on all its suppliers the obligation to gain certification. At a second stage, ISO standards must be regularly improved by quality experts. These experts raise the technical level of the norm (from ISO9000 to ISO9002) but they also extend the normalization to all activities (from manufacturing to services).

1.3 Impiementation of ISO 9001:200

Implementing a Quality Management System (QMS) within an organisation needs to be supported by the top management. The objective of the QMS must be clearly defined so that the system can be effective.

The design and implementation of a quality management system depends on the type, size and products of the organisation. Each company will have its own objective, however most companies objective is to increase profitability. The implementation of a Quality Management System produces four main benefits. Firstly, it helps to manage costs and risks. Secondly, it increases effectiveness and productivity. Thirdly, it allows the identification of improvement opportunities. It helps to increase customer satisfaction.

In addition to all the benefits described above, a well-managed quality system provides several competitive advantages. As a matter of fact, it enhances operational efficiency through the control on all processes and therefore cost reductions. It also allows more flexibility and the ability to respond to market opportunities. A well-managed quality system results in increasing customer loyalty and market share indeed.

ISO 9001:2000 requires a quality system to be documented, tested, measured and assessed. Management commitment is essential for the implementation and ongoing success of the Quality Management System. To that purpose, QMS must be able to be managed properly and adequate resources allocated. Practical and accessible to all employees, QMS must be measurable and reflect the overall company objectives. In order to be as efficient as possible, it should be reviewed regularly and

measured for effectiveness, adjustments must be made to reflect major changes to the organisation and business practices.

It is not essential to gain accreditation for a Quality Management System to work effectively. It depends on the organisation if they wish to gain accreditation. However, if the organisation gains accreditation, it will be recognised as an organisation that is committed to providing quality products, improvement and customer satisfaction. In addition, the organization will gain respect through the industry as a fully accredited quality company.

Quality Management System Implementation, the main steps

Responsibility			Process
·	Set objectives and goals of the Quality Management System
·	Appoint a Quality Team to develop and maintain the QMS
·	Set timelines and project scope		Management
·	Allocate resources required for the development, implementation and on-going management of the system
·	Inform all staff and seek participation from all levels
·	Decide if a Consultant is required for the project
·	Prepare a project plan and allocate resources		Management/ Quality Team
·	Assess an appropriate budget based on equipment, training, time and personnel required
·	Seek approval from management to procure required resources and attend any training
·	Assess method for documenting the QMS
·	Design templates and documentation		Quality Team
·	Set timelines for the various tasks
·	Schedule individual departments and positions for development of policies and procedures
·	Develop Quality Management System policies to reflect company objectives
·	Start to develop procedures and work instructions with each department		Quality Team/
·	Report to management any risks and improvement opportunities that have been found		Management
·	Document any Quality Corrective Action Requests that might be identified (identified risk areas that require management attention and improvements)
·	Approve and issue the Quality Management System		Management
·	Operate the QMS for a minimum period of 3 months
·	Carry out initial audits to ensure documentation matched processes
·	Ensure that "you do what you say you do" if any deficiencies are found either change processes or change the QMS to		Quality Team
	reflect what is actually done
·	Assess the effectiveness of the QMS and implement any changes that might be required
·	Undertake management review of the QMS
·	Adjust resource requirements
·	Decide if accreditation assessment is required		Management
·	Set accreditation assessment timelines
·	Appoint Accreditation Body		Accreditation Body
·	Undertake Audit

	·		Report findings to management including any changes required to the QMS
·	Make changes to the QMS according to the findings of the Accreditation Body		Quality Team/ Management
·	Advise Accreditation Body to reassess the QMS
·	Undertake follow-up audit		Accreditation Body
·	If all requirements are met, accreditation will be issued
·	Continue to audit, review and assess the QMS at the agreed time intervals		Quality Team/
·	Continue to assess risk areas and identify improvement opportunities		Management
·	Continue to review policies and procedures and make amendments as required		Accreditation Body
·	Continue to measure effectiveness of QMS to the overall company performance

1.4 Certification, a prerequisite for B2B e-commerce?

For complex quality-sensitive goods, the efficient functioning of B2B will necessitate certification of subcontractors by the buying firm. Certification allows alleviation of problems related to information asymmetry. It is all the more important that the subcontractor is not well known by the contractor, is small, does not have a well-established situation in the industry, etc. This, incidentally, is the profile of a firm that would most benefit from having B2B e-commerce, in order to find new contractors and expand its activity towards new areas.

With regard to the development of B2B exchanges, Certification seems to be crucial. Certification being a prerequisite for the development of B2B, countries where ISO certification is more common should be countries where B2B e-commerce has the best opportunities to develop. Therefore, countries where ISO norms were diffused widely are also countries where B2B is more frequent.

As demonstrated in this paper, the Internet has completely transformed the way businesses are conducted (e. g relationships between buyers and sellers, supply chain management). On the Internet, customers and suppliers engaging in e-commerce transactions must face two major issues, which are trust and authenticity. Firstly, it is quite difficult to trust a supplier who may be located on a different continent. Secondly, it is quite tricky to verify the supplier's conformity to management system standards. These issues are critical when the customer expects its suppliers to have management systems that conform to recognized standards. In addition, checking supplier conformity to the relevant standards becomes critical when the customer itself is required by its customers to verify the conformity of subcontractor processes to quality management system (QMS) such as ISO 9001 :2000 or ISO 14001:1996.

E-commerce supply chain management and integrated e-assurance

· Conformity assessment and assurance in e-commerce

An efficient corporate e-commerce strategy integrates a number of core business functions (see the scheme above). Some of these core functions have an obvious role to play within Internet e-commerce. First and foremost amongst these is the notion of assurance, whereby a supplier in an e-commerce transaction can satisfy a customer's need for confidence about the supplier's credentials and capabilities. The concept of assurance is how a customer validates a supplier's claims of conformity to a given standard. This can be done through e-assurance, meaning that the supplier is enabled to convey the relevant conformity assessment documents such as ISO 9000 in a secure manner, which supports validation and authentication by the customer.

The ISO/IEC Guide 2 defines conformity assessment as standardization and related activities. It defines standardization as, "any activity concerned with determining directly or indirectly that relevant requirements are fulfilled".

In addition, conformity assessment procedures provide a means of ensuring that the products, services, or systems produced or operated have the required characteristics, and that these characteristics

are consistent from product to product, service to service, or system to system. Conformity assessment includes product sampling and testing, inspection, and certification, and quality and environmental system assessment and registration. It also includes accreditation, assurance of the competence of third parties.

As conformity assessments convey information between suppliers and customers, we can say that it is a major mean of marketplace communication. From the customers and suppliers perspective, understanding of the conformity assessment process is essential. It allows to evaluate the real value of the assessment scheme and therefore to take accurate business decisions. Three main criterions must be considered:

- impartiality and competence of the assessment body;

- scope of the registration (certification);

- adequacy and appropriateness of the standard against which the organization is evaluated, and the security with which the information is transmitted.

The customer may be misled if the above criterions are poorly or not met or at all. On the Internet, this is likely to happen and that is the very reason why accreditors to customers must be highly involved. Consequently, they have ensure the integrity and credibility of the scheme during the information dissemination process.

· ISO 9000 certification and Internet e-commerce

A formal QMS helps a supplier to ensure the production of products that consistently meet customer specifications. However, we must underline that QMS standards such as ISO 9001:2000 only deal with the processes an organization uses to manage production or service provision

As certification to ISO 9000 and other sector-specific requirements helps the customer to identify and select its supplier, certification is becoming a major differentiator. By communicating on their QMS registration and certification, suppliers may remain competitive at a global level.

QMS and EMS registrars (certification bodies), the accreditation bodies that verify the competence of registrars and the certified suppliers themselves must now confront the issues surrounding the security and authenticity of ISO 9000 and ISO 14000 certificates reported on the Internet to support e-commerce transactions.

The certification bodies which register QMS which are verifying the competence of registrars and certified suppliers have to face the internet challenge. As a matter of fact, they must deal with the security and authenticity of ISO 9000 certificates which are reported on the Internet in order to support e-commerce transaction. Ensuring the security and authenticity of ISO 9000 and ISO14000 certificates of registration on the Internet is therefore critical to upholding the integrity and credibility of the conformity assessment system as a whole.

· Ensuring online security and authenticity

The certificate of registration, signifying verified conformity by a registrar, is the de facto informational instrument through which a registered (certified) supplier communicates its quality assurance credentials to the outside world.

The certificate of registration stands as a proof. It means that conformity was verified by a registrar. Thus, this document allows the registered supplier to communicate on its quality assurance credentials toward its customers. Ownership, use and display of certificates of registration have traditionally been controlled and governed by guidelines published by the registrars, which issue such certificates. In the past, paper-based certificates or registration were efficient. However, they seem inadequate when it comes to the trust, security and authenticity required by the use and display on the Internet.

The security and integrity of certificate of registration information is highly challenged by the Internet as it is necessary to resist to the corruption, alteration or falsification means available. As a matter of fact, scanned certificates displayed on supplier Web sites are subjected to downloading alteration and redistribution by external agents. This might lead to the circulation of falsified certificates and unsupported claims of registration.

If we consider ISO 9000 registration, suppliers often adopt three methods of certificate display on their Web sites:

- A statement of claim (e.g., "ISO 9002-registered") displayed on a supplier's Web site

The statement does not provide details. It means that the customer must contact the supplier or its registrar to verify that the registration is in good standing. In addition, the customer must make sure that the registrar is qualified to audit the supplier and that the scope of registration covers the product or the service. These Web - based statements of claim cannot be immediately validated and authenticated without additional work.

- A statement of claim accompanied by registrar and accreditation body marks

In comparison with a plain statement of claim, a statement of claim accompanied by registrar and accreditation body marks seems to be more credible. However, the customer is still required to contact the registrar in order to make sure that the statement of claim is valid.

- Display of certificate of registration

A scanned image of the certificate of registration is displayed upon the supplier Web site. As these scanned images can be easily downloaded, they cannot be considered as valid and secure. Once again, the customer has to validate.

Both the lack of security and authentication surrounding the use of certificates of registration on the Internet is a real exposure point for the conformity assessment industry and presents a definite threat to the integrity and trust which underpins the system. That is the reason why all registered companies should consider how to integrate the e-assurance aspect of their business within their overall corporate e-commerce strategy.

- Recommendations for registered suppliers

According to the above demonstration, suppliers who claim conformity to recognized standards have to consider how they can provide customers with this required confidence and trust by providing their credentials in a secure manner that supports online verification and authentication.

When developing their e-commerce strategy, suppliers should consider the following six points: - Make sure that the e-assurance is a key to the overall corporate ecommerce strategy

- Consider how to meet Internet buyers' need for trust and authentication. To that purpose, suppliers must show evidence of their certification validity and ownership.

- Ensure that the certificates display on the Internet resist to download and other mean or falsification or corruption. To that purpose, they can use digital certificates of registration which are encrypted, signed and secured under a public key cryptosystem.

- Ensure that certificates of registration and associated claims of conformity are served from a secure server whose identity and authenticity can be verified. Using trust services provided by a recognized Internet certificate authority such as Verisign or Entrust is one way to built in this level of assurance.

- Develop an e-assurance strategy for "going beyond the certificate". Buyers faced with choosing among suppliers who all hold valid certificates of registration will be looking for other objective evidence in support of superior performance. This will require providing quality or environmental system and other objective data, which supports the level of quality, reliability and environmental care being claimed.

- Seek your registrar's input when developing and deploying an Internet strategy for giving visibility, security and authenticity to your registration that ownership of the certificate of registration rests with the registrar and any e-assurance strategy you develop should be aligned with terms of use for the certificate specified by the registrar. Registrars are only now becoming aware of the need for digital certificates of registration, but most will be willing to offer guidance as to how conformity to management system standards can best be conveyed over the Internet.

2.The aerospace quality strategy

As the aerospace industry operates in a global market and relies on a complex supply chain, quality management requirements are crucial. As a consequence, the manufacturers, the suppliers and service organisations succeeding in this highly competitive market are those who consider management as a key business driver.

The aerospace supply chain can be described as a pyramid with a few major Vehicle, Airframe and Propulsion Manufacturers (Tier 1) at the top supported by Integrators, Major Assemblers, Component Designers, Specialty Electronics and Software Designers at the 2ⁿd and 3^rd Tiers; and Make-to-print Machine Shops and Fabricators at Tier 4. Lower in the pyramid are Distributors and Detail Hardware providers and Raw Material manufacturers. Across all six tiers are organizations that provide Special Processes.

The Aerospace products, which are huge and complex must be highly reliable, perform over a long period of time, comply with Public safety requirements, and use complex platform. They also take years and billions of dollars of investments. That is the reason why new products are being developed more and more by teams which creates a virtual product enterprise. This ability to collaborate has become the key success of an enterprise. That is the reason why standards are critical to support these product partnerships.

ISO 9000 changed the way the world looked at managing quality. But to implement ISO 9000, the aerospace industry required a new strategy for developing an international quality system and for implementing the standards required to successfully drive those changes down through one of the largest and most complex supply chains of any industry. The Boeing Company for example, has over 15 000 suppliers in over 80 countries.

If we consider the past ten years, we can say that the aerospace industry has significantly improved its quality philosophy and processes deployment. The aerospace OEMs began to add company-specific requirements to customer and regulatory requirements such as MIL-Q-9858, AQAP-1, and NASA and FAA FARs. Suppliers were supposed to adapt to each company-specific requirements in order to meet the customer's needs. Then, each OEM was performing audits against its own requirements. With regard to the implementation and interpretation of the aerospace quality standards, it is obvious that the performed audits were resources consuming for both the OEM and the supplier. In addition, the slight differences between the company-specific requirements obliged the suppliers to be constantly audited to different criteria for basically the same top-level standard.

In 1995, several major aerospace manufacturers recognized the need for uniform supplier requirements. That is how they formed the American Society for Quality (ASQ) and then create the American Aerospace Quality Group (AAQG). At first, the AAQG considered the use of the ISO 9001 as a stand-alone document but they rapidly figured out that the aerospace required too much supplementation. They tried to create an industry quality system called ARD900 published by the Society of Automotive Engineers in 1996. Then, split from the ASQ, the AAQG formed the SAE Aerospace Council subcommittee. The main objective of the SAE was the creation of standardized quality requirements for the aerospace industry. Finally, in 1997, the SAE released a new standard called AS9000.

In December 1998, the aerospace industry established the International Aerospace Quality Group (IAQG), with representation from around the world, with the stated objective of establishing and maintaining

"a dynamic co-operation based on trust between international aerospace companies on initiatives to make significant improvements in quality and reductions in cost throughout the value stream".

According to the problem of duplicate and contradictory requirements, the aerospace industry learned the hard lesson that product and service quality in determining customer selection is as important as price or delivery.

We must also consider the structure of the aerospace industry itself. As Design and development's high costs favour joint partnerships, most of the aerospace players are both suppliers and customers to each others and their supplier network. That is the very reason why a level playing field was necessary when quality matters are concerned. Consequently, the IAQG stated that: "Where quality is concerned, there's no competitive advantage."

2.1 The AS9000 standard

The main interest of the AS9000 is its focus on areas of importance to the aerospace industry. The recognition of the relationships and requirements of regulatory agencies is one key feature of AS9000. Furthermore, the supplier community is considered as an extension of the processes and procedures of the customer. Therefore, the supplier must be tightly controlled in order to reduce variation. AS9000 put the stress on the processes following which can have extreme consequences on the product's safety, reliability and performance.

AS9000 also adds industry-specific requirements such as foreign object damage control, which is one of the most prevalent and deadly problems of the aerospace. The standard highlights the importance of quality along the entire supply chain. Process planning and control is also important--not just for a process itself but also for the tooling, equipment, software and people involved. Finally, AS9000 increases requirements for documenting results because many times the only evidence that processes have been correctly performed is the documentation created while the work was underway

Although AS9000 satisfied these immediate needs, the AAQG recognized that OEMs operate globally. In 1998, ISO Technical Committee 20, which is involved in aerospace standards, agreed to sponsor Working Group 11, which created an ISO technical paper for quality system requirements. It used as a template AS9000 and a corresponding European document called prEN 9000-1. However, if ISO TC 20 published the document, the standard would've taken additional time to implement and would've lost its ISO 9000 identity, as did a similar standard developed by the automotive industry. About this time, the IAQG was formed to help facilitate standardization and cooperation among major aerospace OEMs.

2.2 AS9100: the first international quality systems aerospace standard

There are a variety of motivators influencing the introduction of the AS EN SJAC 9100 standard; among these motivators, the data provided by the various aviation regulatory agencies revealed that the original equipment manufacturers (OEMs) were exercising insufficient control of the supplier base.

The industry co-operated in producing AS EN SJAC 9100, the first international quality systems standard specifically developed by and for the aerospace industry. It is the first single standard available for use across the global aerospace community. It includes requirements necessary to address both civil and military aviation and aerospace needs. The industry-developed common quality management

system requirements within the standard ensures a consistency of approach throughout the supply chain, both nationally and internationally.

The AS9100, was developed by a conjunction of parties including the International Organization for Standardization (ISO) This was accomplished with the support of the International Aerospace Quality Group (IAQG), which is comprised of members of the aerospace industry from the United States, Europe, Japan, Brazil and Mexico. The Society of Automotive Engineers (SAE) published the standard in late 1999. The motive behind the AS9100 was to create a truly international standard for the worldwide aerospace industry. As such, the standard complements ISO 9000 requirements by adding provisions that address both civil and military aerospace specifications.

The new standardized document, called 9100, is still based on ISO 9001:1994(E), although it was published separately by each country's aerospace association or standards body. In the United States, it was an SAE document called AS9100. In Europe it's known as AECMA EN9100, and in Japan it's JIS Q 9100. It's also published in Brazil and expected to be published soon in Korea, China and several more cou ntries.

The process of standardization added almost 55 more amplifications and requirements to ISO 9001:1994. When ISO revised the ISO 9001 quality management system standard in 2000, the aerospace industry kept on top of the changes and published a revised standard within six months; this revised document was "technically equivalent" as far as aerospace supplementation was concerned.

In addition, the new standard harmonises the requirements of former individual standards like the American AS9000, the European EN9000-1, prEN9100, and SJAC9100. AS/EN9100 clarifies the specific aerospace requirements, and is a compliment to national laws and regulations. It addresses both "design" and "non-design" responsible companies.

The AS9100 retains the ISO 9001's aerospace sector-specific additions that are essential to maintain the safety, reliability and quality of aerospace products. It was created with the continuous improvement of supply chain processes in mind. The ultimate goal of the AS9100 is to ensure consistently high-quality aerospace products and maintain customer satisfaction while keeping manufacturing costs at a minimum. To accomplish this it standardizes to the maximum extent possible, the quality system requirements of the aerospace industry.

The main goal of the standard is to deliver costs savings, or at least reducing, individual requirements for each and every aerospace customer, supplier or vendor, the standard will deliver cost savings to all parties. The Federal Aviation Association (FAA) was considered in setting the provisions of the new standard, particularly in regards to their concern that a greater emphasis be placed on supplier control.

The 28 pages of the document (50% more than AS9000) contain many new requirements, and numerous points of emphasis, clarification and interpretation specific to the Aerospace industry. Similar standards are specifically developed for aerospace suppliers involved in repair and overhaul, namely AS/EN 9110, and for aerospace distributors AS9120. Only a few minor enhancements were made and some technical corrections submitted. When it was published in the United States in 2001, it was released as AS9100 A. The number of supplementations was significantly reduced in this document. However, it

included both the new version of the standard, based on ISO 9001:2000, and the original version based on ISO 9001:1994.

AS9100 requires that "key characteristics" are managed when identified. Keys characteristics are features of a material, process or part in which the variation has a significant influence on product fit, performance, service life or manufacturability.

The standard also requires that an organization establish and document a configuration management process. AS9100 includes extensive supplementation in the design and development processes. Additional notes are included for both design and development verification and validation, and highlight traditional areas of emphasis.

Emphasis is placed on managing suppliers throughout the aerospace supply chain. In particular, AS9100 includes a number of additional expectations for identifying and maintaining suppliers. The standard lists seven specific areas to consider when communicating requirements. They range from clarifying engineering requirements to managing test specimens and right of access to suppliers' facilities. Procedures for determining the method of supplier control are required, as are the processes used when employing these methods.

Controlling production processes is highlighted. This is especially important when conducting special processes that don't lend themselves to after-the-fact inspection techniques. Tooling and other production equipment, including computer-controlled machines to fabricate and assemble products, are subject to an additional level of scrutiny.

Servicing requirements are an important part of an aerospace quality management system. These include maintenance and repair manuals as well as the actual service work. Documenting the work performed, equipment used and the people involved is crucial. For facilities that engage only in maintenance, repair and overhaul, the recently released AS9110 is preferred.

The AS9100 standard imposes traceability requirements for some or all components as dictated by the customer or regulatory authority. The standard provides the essentials of an effective traceability program and some additional expectations regarding internal quality audits. Another requirement, firstarticle inspections, demonstrates product conformance to engineering requirements. The standard suggests that aerospace standard AS/EN/SJAC 9102, which was developed by the IAQG and outlines a methodology for performing and documenting first-article inspections, be consulted for further guidance.

2.3 Industry-managed processes: demonstration of the supplier compliance

More than 70 percent of global IAQG members have implemented AS9100 internally and are requiring it of their supply chains. Increasingly, the aerospace industry is using industry-managed processes as a means of demonstrating a supplier's compliance to 9100 and other standards. In the United States, the AAQG, in conjunction with the Registrar Accreditation Board, have established both requirements and processes for auditors and registration bodies. Within the Americas, the Registrar Management Committee oversees this function for aerospace OEMs and their suppliers. The process is defined in the SAE's Aerospace Information Report 5359. This document details the operation and responsibilities of all parties involved in the approval process.

The AAQG published AIR 5493 as well, which describes the requirements for revised AS9100 standards training. The report will be released soon and will provide for course accreditation by the RAB. These industry-managed processes are being replicated in the other IAQG sectors of Asia and Europe, and results will be made available via a common database managed by SAE. The database and industrymanaged processes will be overseen by the IAQG so that the concept of "one approval accepted everywhere" will truly become a reality in aerospace.

The global aerospace authorities are also working together to review the activities of major OEMs with respect to supplier oversight. The FAA has concluded that AS9100 is "a comprehensive quality standard containing the basic quality control/assurance elements required by the current Code of Federal Regulations, Title 14, Part 21." The Department of Defense has adopted AS9100 and made it available for use on contracts. Likewise, NASA issued a similar notice that it had reviewed the standard and approved its use for contractual requirements. Civil aviation authorities are evaluating and commenting on the industrymanaged plans. For the most part, these processes effectively use scarce resources and increase oversight while minimizing confusion and intrusion into a supplier's and OEM's operations.

Considering that compliance with a new standard implies the reshaping of old operations, Boeing has given two years to reach compliance to 3,000 of its suppliers. In order to make the transition as smooth as possible between ISO9001 and AS9100, Boeing provides its suppliers with generous leeway. In addition, Boeing has asked its suppliers to adopt the Boeing Quality Management System instead of outmoded legacy quality systems (e.g: D1-9000, MIL-Q-9858A, MIL-1-45298).

Boeing's suppliers are not the only ones who are put upon to comply with the AS9100. It is a standard to be met by suppliers across the aerospace industry. As the SAE puts it, "If your company produces parts and/or processes for the aerospace industry, AS9100 is an essential industry document." The IAQG has set November 2003 as the compliance date. Until then the AS9000 remains available for use. Boeing's Gary Baker, chair of the IAQG, explains, "We hope that by rapidly aligning the 9100 standard with ISO 9001 :2000, while at the same time retaining the existing version of 9100 for concurrent use [until November, 2003] that we can minimize the impact of this revision upon the using organizations."

2.4 The Quality System Audits: the aerospace industry control other-party process

An adequate audit program is required to provide management with visibility regarding the effectiveness and efficiency of the quality management system. ISO Technical Committee (TC) 176 has developed a set of audit requirements and published them as ISO 19011. These should be reviewed when establishing the organization's internal audit process.

A number of approaches exist to demonstrate the compliance of the quality management system to the appropriate standard. These are most typically referred to as:

- 1^st party: an organization conducts their own evaluation and declares compliance

- 2ⁿd party: a customer reviews their suppliers quality management system and determines compliance

- 3rd party : an independent organization, typically an accredited registrar, audits the organizations quality management system and certifies compliance

World Level

European Level

National Level

EN 9100...
Certificate

Asia/Pacific Americas

Supplier or
Subcontractor

CRB

NAB

IAF

EA

Local Procedure

Training
Organisations

Auditors

IAQG
Oversight
Team

EU OPS
Team

CBMC

AAB

Document

104

Asia/Pacific Americas

European Aerospace Supplier Quality System Certification Scheme

AECMA/QC/24281

AECMA QC

IAQG

NAIA

IAF - International

Accreditation Forum

EA - European co-operation for
Accreditation

NAB - National Accreditation Body CRB - Certification Body

NAIA - National Aerospace Industry

Association

CBMC - Certification Body Management Committee AAB - Auditor Authentication Board

- Mandated Accreditation Bodies

- Accredited Certification Bodies

- Authenticated Aerospace Auditors

- Authenticated Training organizations

- Aerospace QMS Standards Certificated compan ies

DATA BASE

The European Management system for OPS

The aerospace industry has developed a process for the oversight of the 3^rd party process when performing audits to the 9100, 9110 and 9120 standards. This is typically referred to as the IndustryControlled Other-Party (ICOP) process. Under this process the industry conducts independent reviews of those accrediting the registrars and conduct witness audits of these registrars as they perform quality management system audits. The result is a list of Registrars authorized to perform aerospace QMS audits. The details regarding this methodology are contained in the IAQG procedure 9104.

The aerospace industry developed an International Aerospace Sector Certification Scheme. To that purpose, the IAQG developed and compatible system acceptable to all. This system allows sharing of audit results and approvals resulting in the elimination of multiple assessments and process improvement. Consequently, suppliers receive one aerospace quality system approval that is acceptable to all aerospace OEMs (and their suppliers) throughout the world. Obviously, confidence is key to the International Aerospace Sector Certification Scheme.

The aerospace industry identified eleven requirements of a global QMS evaluation system. - Single global standard

- Harmonized system of application

- Inter-National accreditation control

- Approved certified bodies and registrars - Approved aerospace auditors

- Global acceptance by supplier base

- Data easily available to all participants

- Active industry participation

- One audit accepted by primes

- Oversight /control by IAQG and Sectors

- Inter-National Aviation Authority endorsement

The ICOP process includes requirements for the Accreditation Boards and CRBs, the auditors and the associated training. The system includes requirements for the minimum audit time and reporting the results of the audits. The industry is responsible to provide oversight for the process, to report problems with the registrars and their auditors and to track the performance of the suppliers and their associated registrars.

An On-line Aerospace Supplier Information System (OASIS) went operational in July 2003. Since then over 2000 registration have been reported. All assessments are entered by the registrars and consist of two sets of data. The first is the public information contained on the Certificate of Registration. The private information includes the detailed audit findings. Access to this private data is controlled by the certified organization. This data is also summarized periodically to allow visibility to the industry's performance to the standard. The OASIS database is an essential element of this robust system.

The International Aerospace Sector Certification Scheme results in the elimination of redundant quality management system assessments and a clearer communication of industry expectations.

2.5 the OASIS database: a new aerospace procurement tool?

In May 2003, the International Aerospace Quality Group (IAQG) issued a letter detailing the roll out of the Online Aerospace Supplier Information System (OASIS). The Requirements for Certification/Registration of Aerospace Quality Systems (AIR5359) used for conducting aerospace audits to Aerospace Quality Management Systems requires Certification/Registration Bodies (CRBs) to submit the results of the assessment performed. Effective July 1, 2003, CRBs have been required to enter audit information into the OASIS database.

The database, which is a requirement of AIR5359, is essential to provide independent verification of the status of the certification. It enables the acceptance of a single assessment globally and prevents from multiple visits and audits by multiple customers. Without the OASIS database, OEM's would have to independently verify each auditor, CRB and assessment results.

Oasis benefits to all the aerospace industry players as it keeps customers, OEMs, and suppliers up-to-date. It provides complete information on Aerospace QMS approvals, with data on Who, How, When and What is Approved, including results. It also provides ABs, CRBs and Auditors current information on Who is Approved and for What by the Aerospace Industry. In addition, Oasis should be part of the OEM/Supplier's process of supplier management as it should allow a supplier to be added to an ASL without requiring additional evidence of QMS registration/approval.

The OASIS database has two sections, including one available to suppliers and anyone else. The other section is limited to member companies of IAQG. The supplier section identifies contact information , certification dates and scope of registration. It also identifies all IAQG member companies, accreditations bodes (Abs), certification/registration bodies (CRBs and auditors).

The limited access section (IAQG members only) includes detailed information on every assessment. The assessment dates, auditor names, an assessment summary and the score from the assessment are available.

IAQG developed OASIS after members expressed a desire to reduce the amount of audits performed on suppliers in the supply chain. A consistent set of standards (AS9100, AS91 10 and AS9120) help to solve one part of the problem. However, the IAQG members still need a mechanism to quickly access accurate and regularly updated certification and registration information about suppliers. As a matter of fact, many IAQG member companies have regulatory requirements to monitor their supply chain. For a member company to meet the regulatory requirement, they either have to go out and audit that company or show they can monitor the certification/registration activity for those suppliers. The IAQG OASIS database provides that place.

Upon registration, the CRB will enter supplier information into the database. Once established in the database, initial assessment details may be entered.

Cost for entry into the IAQG OASIS database is 500 U.S dollars for a three-year registration cycle. The fee covers the cost of design, development and anticipated maintenance for three years. OASIS database benefits to both IAQG member companies and suppliers. As a matter of fact, listing in the IAQG OASIS database, an organization will be recognized as being certified to the highest level of Quality Management System standards in the world for aerospace companies.

As the database grows with certification and registration information, it becomes a procurement tool for companies to select new suppliers. Once registered to one of the international aerospace QMS standards and listed in the IAQG OASIS database, an organization gains competitive advantage.

GENERAL CONCLUSION: the Extended enterprise concept the new step in the collaborative supply chain?

As discussed through out this paper, firms are willing to enhance their supply chains. Supply chain management systems and Internet-based solutions allow the supply-chain to become more cost-effective and transparent. It even leads to a more collaborative supply chain.

The supply chain management approach is quite new. As a matter of fact, procurement managers were not used to consider supply chain from a collaborative point of view. The traditional model was based on adversarial relationships between buyers and suppliers. In addition, price reduction was supposed to be the success key metric. Consequently, it was considered that lower prices add value.

The extended enterprise symbolizes a revolutionary approach to competitive behavior and how firms view their exchange relationships. Changes in both the nature of competition and how competition is defined have demonstrated that the previous adversarial model is inappropriate and, in many instances, is harmful. It makes perfect sense that a firm cannot optimize its operations without consideration for its customers, its customers' customers, its suppliers, and its suppliers' suppliers.

We can say that we are witnessing a transformation in the nature of relationships within a supply chain, and this transformation changes the manner in which firms compete and cooperate. It seems that the industry players must collaborate in order to compete.

The extended enterprise concept takes Supply Chain Management to the next level by focusing on the factors, which link supply chain members. These factors go far beyond simple workflows and logistics. The extended enterprise concept implies that the different players are linked as learning organizations. The knowledge exchange must create value for the customers so that each supply chain member should benefit from it.

The extended enterprise thinking implies that the supply chain members think of themselves as adaptive networks enabled to respond to changes. This network form requires the transformation of both internal and external processes. As a matter of fact, efficient internal processes alone cannot achieve operational excellence. Thus, when learning is valued and shared across supply chain members, purchasing efficiency is enhanced, and supply chain partners are enabled to gain a sustainable competitive advantage. Not only are supply chain-wide costs reduced, but these supply chains are more responsive to customers' needs and requirements.

Even if the extended enterprise concept is quite new, some firms already begun to use the principles of this new business model. For instance, Airbus has been formed through a consortium of four of Europe's aerospace companies (1970) might be considered as an extended enterprise. France's Aerospatiale, Britain's Aerospace, Spain's CASA, and Germany's Daimler Aerospace each would build sections of planes that would be assembled, marketed, and certified in Toulouse through a separate management company owned by the four partners.

It was not easy to achieve such a level of cooperation between firms, which were used to compete fiercely against each other. According to the four partners, without this level of cooperation through a consortium, they would never have been able to compete against Boeing, Douglas, or Lockheed. In 1988, the introduction of the A320 demonstrated that the Airbus consortium and its suppliers could produce a best-in-class plain. Consequently, we can say that Airbus illustrates the success of a collaborative network between partners.

Furthermore, Airbus is currently in the process of incorporating its first-tier suppliers into its information exchange process through the use of bar codes on parts. These codes reduce logistics processing and cycle time relative to service-related problems. Successful horizontal consortia are built on a model of trust where all members must win if the group is to win.

BIBLIOGRAPHY

lst Theme: supply chain management

· Crandall, R., & Main, K. (2002), Cash is King. APICS: The Performance Advantage, 12, 36-40. Ferrar, A. (2000), Re-Mapping the Automotive Supply Chain [Electronic version]. Control, June.

· Stanley E. Fawcett, Gregory M. Magnan, Achieving World-Class Supply Chain Alignment: Benefits, Barriers, and Bridges, Center for advanced purchasing studies, 2001

· Jeff Arvin, Stewart Beall, Phil Carter, Bill Hoffman, Debbie Maciejewski, Robert Monczka, Trish Mosconi, Kenneth Petersen, Rebecca Smith- Allen, Andrew Swan, and Greg Tademoto, E- Commerce Exchanges, Making informed decisions Applying best Practices was researched and written, McKinsey & Co. and CAPS Research, November 2001

· Edward Davis, Robert Spekman, Introduction to the Extended Enterprise: Gaining Competitive Advantage through Collaborative Supply Chains, Prentice Hall PTR, 2003

2nd Theme: E-Commerce

· A Framework for New Informations Systems; F. Bodart & al. (eds), The Future of Information Systems: Challenge and Pitfalls; FUNDP, Namur, October, 1996, pp. 61-102 (see http://inforge.unil.ch/yp/pub/toFUNDP.htm)

· Webster J (2000). An alphabet soup of B2B standards, Internet Week, (14 December 2000) http://www.internetweek.com/ebizapps/ebiz121800.htm

· Kaplan, S. and M. S. Sawhney, .E-Hubs: The New B2B Marketplaces,. Harvard Business Review, Vol. 78, No. 3: 97-104, May-June 2000.

· Bellomy, D., Business-to-Business E-Commerce, 2000-2006: Worldwide Market Trends by Industry Sector

· Garicano, L. and Kaplan, S.N. 2001, "The Effects of Business-to-Business E-Commerce on Transaction Costs", Journal of Industrial Economics, vol. 49 (4),December 2001: 463-485.

· Riger Rutterbeck, QMI white paper, New Aerospace Quality Standards Bring Efficiency and Consistency to Audit, Certification and Surveillance Processes, 2001

· Berryman, K. and S. Heck, .Is the Third Time a Charm for B2B,. The McKinsey Quarterly, Number 2, On-line tactics, 2001.

· Cuny, T. and S. Richardson, .Shopping for the Right E-Marketplace., Information Week, , pp. RB 10-RB 12, February 12, 2001.

· Devine, D. A., C. B. Dugan, N. D. Semaca, and K. J. Speicher, "Building Enduring Consortia," The McKinsey Quarterly, Number 2, On-line tactics, 2001.

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· Wise, R., and D. Morrison, .Beyond the Exchange: The Future of B2B,. Harvard Business Review, pp. 86-96, November-December 2000.

· Cohen, ICT Revolution, Oxford Univ. Press, Firms and Suppliers (B . . . 2B or not 2B?), 2003 3rd Theme : Quality

· The ISO Survey of ISO 9000 and ISO 14001 Certificates, edition 2002

· Riger Rutterbeck, QMI white paper, New Aerospace Quality Standards Bring Efficiency and Consistency to Audit, Certification and Surveillance Processes, 2001

Appendix A

Appendix B

ACKNOWLEDGMENTS

Firstly, I would like to thank Mr Perez-Cabalerro and my tutor Miss Celine Dedieu who both give me the chance to work for Airbus Central Entity.

I would like to thank Miss Celine Dedieu for her advises and guidance during my training period. I thank my colleague Miss Laurence Saint-Martin for her enthusiasm and joyful personality.

I thank Mr Bernard Lauras for giving me the chance to work for him and with him.

I thank Mr Jean-Louis Bounie for giving me the chance to understand the International Aerospace Quality Group inputs and outputs.

Last but not least I would like to thank the Supplier Card Team Forever as a whole and most particularly the Business Leader Miss Laurence Orru and my ESC fellow. Nicolas Torre. I was delighted to work in such a joyful atmosphere.

Licences Creative Commons

Quelle est la qualification juridique des documents-type Creative Commons ?

Les documents Creative Commons sont des contrats-type qui permettent à l'auteur de communiquer au public les conditions d'utilisation de son oeuvre.

Ce sont des offres ou pollicitations, l'offre étant définie comme la « manifestation de volonté (...) par laquelle une personne propose à une ou plusieurs autres (déterminées ou indéterminées) la conclusion d'un contrat à certaines conditions » (1).

On peut qualifier ces offres de contrats à exécution successive et de concession de droit d'usage. Elles sont fournies à titre d'information gratuitement par Creative Commons et n'impliquent aucun transfert des droits de propriété intellectuelle (2). Elles ne peuvent donc pas être qualifiées de vente ou de cession.

La qualification de prêt à usage ou de commodat adresse les biens qui doivent être restitués, ce qui n'a guère de sens dans le cas de biens immatériels.

Le louage de chose incorporelle ou licence (location d'un meuble incorporel en droit de la propriété intellectuelle) est défini à l'article 1709 du Code Civil comme «un contrat par lequel l'une des parties s'oblige à faire jouir l'autre d'une chose pendant un certain temps, et moyennant un certain prix que celle-ci s'oblige de lui payer ». Le prix à payer n'entraîne ici aucune rémunération, mais les obligations qui pèsent sur l'Acceptant laissent à penser que la personne qui offre une oeuvre sous de telles conditions en retire des avantages.

Le respect de la destination et l'usage de la chose louée en bon père de famille fait partie des règles communes aux baux des maisons et des biens ruraux.

La qualification de licence, sous-catégorie de contrats, est traditionnellement réservée à la propriété industrielle (licence de brevet ou de marque) et aux logiciels, et n'est pas employée en propriété littéraire et artistique. Cependant, ce terme est communément utilisé pour nommer les Creative Commons licenses, sous l'influence du terme américain et du concept de "licences libres" : licence GNU GPL, Licence Art Libre...

La nouveauté de ce type d'offre peut enfin amener à la qualification de contrat innommé.

Quelle est la validité des licences Creative Commons au regard du formalisme français des contrats de droit d'auteur ?

Le formalisme des contrats de cession de droits de propriété littéraire et artistique (CPI L. 131-3) peut s'appliquer aux licences ou autorisations d'utilisation (3). Celles-ci doivent décrire de manière précise le domaine d'exploitation, soit l'étendue, la destination, le lieu et la durée des droits concédés.

L'article 3 des licences Creative Commons énumère l'étendue des droits proposés :

« la reproduction de l'oeuvre seule ou incorporée dans une oeuvre dite collective, comme une publication périodique, une anthologie ou une encyclopédie », au sens de l'article L. 121.8 du CPI, voire modifiée en vue de former certaines « oeuvres dites dérivées : traductions, les arrangements musicaux, les adaptations théâtrales, littéraires ou cinématographiques, les enregistrements sonores, les reproductions par un art ou un procédé quelconque, les résumés, la distribution d'exemplaires ou d'enregistrements » desdites oeuvres, au sens du CPI, article L. 122-4, seconde phrase.

La durée (toute la durée légale de protection de l'OEuvre, telle qu'elle est définie aux articles L. 123, L. 132-19, L. 211-4...) et l'étendue (le monde entier) sont également identifiées.

Quant à la destination, elle est clairement repérable dans l'intention de l'auteur de contribuer à un fonds commun en autorisant certaines utilisations gratuites de son oeuvre.

La cession des droits de reproduction et de représentation à titre gratuit est permise à l'article L. 122-7 du CPI.

On précisera que les sous-licences sont explicitement interdites dans les documents Creative Commons, être titulaire d'un droit d'usage ne confère pas au bénéficiaire d'une licence Creative Commons le droit de céder ces droits. Le bénéficiaire ne pourra distribuer l'oeuvre ou la communiquer au public que sous les mêmes conditions sous lesquelles il l'a reçue.

Le terme « bénéficiaire » et non pas le terme « licencié » a été retenu pour désigner dans la traduction française la personne qui accepte l'offre. Ce choix marque une volonté de confirmer cette interdiction et peut ainsi favoriser ainsi le consentement éclairé de l'acceptant.

L'article 3 de la version originale prévoit que « Les droits mentionnés ci-dessus peuvent être exercés sur tous les supports, médias, procédés techniques et formats, qu'ils soient connus aujourd'hui ou mis au point dans le futur. »

L'article L. 131-6 accepte « la clause d'une cession qui tend à conférer le droit d'exploiter l'oeuvre sous une forme non prévisible ou non prévue à la date du contrat. ». Elle « doit être expresse », ce qui est le cas dans la version originale des licences. Mais étant donné qu'elle doit également « stipuler une participation corrélative aux profits d'exploitation », la phrase a été écartée de la version française, à l'instar de la solution retenue par les traducteurs allemands conformément à l'article 31.4 de la loi allemande sur le droit d'auteur de 1965, plus stricte, qui interdit l'exploitation sous une forme non prévisible.

Si les cessions peuvent être consenties à titre gratuit, l'article L1 31-3 du CPI prévoit que les adaptations audiovisuelles doivent prévoir une rémunération.

Cependant, la jurisprudence (4) a admis la validité d'une cession des droits d'adaptation audiovisuelle même si aucune rémunération n'était stipulée, la contrepartie étant fournie par la publicité faite à l'ouvrage, oeuvre préexistante. L'intention de l'auteur d'obtenir une diffusion et une distribution de son oeuvre sous Creative Commons plus large peut être interprétée comme le souhait d'une plus grande notoriété grâce aux copies et aux diffusions qu'effectueront les Acceptants, sans exiger une exploitation conforme aux règles spécifiques d'un contrat d'édition, ni être lié par un contrat d'exclusivité avec un producteur.

L'autorisation d'adaptation audiovisuelle ne doit-elle pas figurer dans un contrat écrit distinct de celui qui autorise les autres actes ?

D'après l'article L1 13-4, « l'oeuvre composite est la propriété de l'auteur qui l'a réalisée, sous réserve des droits de l'auteur de l'oeuvre préexistante ».

L'article L1 31-4 alinéa 3 stipule que « les cessions portant sur les droits d'adaptation audiovisuelle doivent faire l'objet d'un contrat écrit sur un document distinct du contrat relatif à l'édition proprement dite de l'oeuvre imprimée ». On peut se demander si le choix de l'option qui autorise les modifications ne contraindrait pas à recourir à deux contrats Creative Commons séparées, de manière à respecter cette disposition qui vise à protéger l'auteur en lui faisant prendre conscience du fait qu'il s'agit de deux actes de cession bien différents.

La réponse est non car les licences Creative Commons ne sont pas assimilables à des contrats d'édition au sens de l'article L132-1 du CPI : elles ne prévoient pas d'obligation pour le

bénéficiaire correspondant à la charge pour l'éditeur d'assurer la publication et la diffusion des exemplaires dont la fabrication est autorisée.

Quelle est la validité des offres Creative Commons vis-à-vis du droit général des obligations ?

L'absence de signature n'est pas le signe d'une absence de consentement ou d'information sur l'objet et la nature de l'engagement contractuel. Il est en effet obligatoire d'accompagner toute reproduction ou communication de l'oeuvre d'une copie ou d'un lien vers le texte Creative Commons qui la gouverne. Il est précisé dans l'objet du contrat que l'exercice sur l'oeuvre de tout droit proposé dans ladite offre vaut acceptation tacite de celle-ci, à l'image

des licences d'utilisation de logiciels qui prennent effet à l'ouverture de l'emballage du disque d'installation. On peut inférer de l'article 1985 du Code Civil relatif au mandat que le commencement de l'exécution du contrat proposé par le destinataire de l'offre « révèle » son acceptation (5).

La personne qui propose de contracter, l'auteur au sens de l'article 113 du CPI, garantit dans l'article 5a qu'elle a bien obtenu tous les droits nécessaires sur l'oeuvre pour être en mesure d'autoriser l'exercice des droits conférés par l'offre. Elle s'engage à ne pas transmettre une oeuvre constitutive de contrefaçon ou d'atteinte à tout autre droit de tiers (autres titulaires de droits ou sociétés de gestion collective qui auraient pu être mandatées, ou tout autre tiers), et à permettre une jouissance paisible à ceux qui en accepteront les termes.

Cependant, la version originale 2.0 des textes Creative Commons (notre travail de traduction et d'adaptation portait jusqu'en mai 2004 sur la version originale 1.0) prévoit que cette clause de garantie deviendra optionnelle. Une telle exclusion de garantie pourrait être jugée sans valeur en cas de dommage. La responsabilité délictuelle étant d'ordre public, elle aura vocation à s'appliquer par défaut, même sans mention explicite : la responsabilité de l'offrant est alors définie par la législation applicable.

Enfin, proposer des textes en langue française n'est pas seulement plus commode pour les utilisateurs français, mais répond également à l'impératif d'utiliser la langue française dans le cadre de relations avec des salariés ou des consommateurs (6) dans un contexte professionnel privé ou public.

Les contrats Creative Commons sont-ils compatibles avec le droit moral, norme impérative ?

Droit à la paternité

N'est-il pas obligatoire de choisir l'option Paternité ? (On notera que l'option Paternité devient obligatoire à partir de la version 2.0.)

On pourrait en effet penser que l'option Non Attribution, qui n'imposait pas d'indiquer la paternité de l'oeuvre, ne pouvait pas être choisie en droit français car le droit à la paternité, prérogative de droit moral, est inaliénable. La même question est soulevée par l'article 4.a qui permet à l'Offrant de demander à l'Acceptant de retirer de l'OEuvre dite Collective ou Dérivée

toute référence au dit Offrant.

Effectivement, un contrat qui imposerait à l'auteur de renoncer définitivement à son droit au nom, en échange d'une contrepartie financière ou non, serait nul. La jurisprudence relative aux contrats dits de « nègre » où l'auteur réel écrit un ouvrage pour autrui, et s'engage à renoncer à être identifié comme auteur auprès du public, est stable : l'auteur réel pourra toujours se faire reconnaître comme auteur (7).

Les documents Creative Commons n'imposent pas une renonciation définitive, mais permettent une renonciation provisoire et une clarification (8). L'auteur pourra toujours faire reconnaître sa paternité.

En revanche, ce droit à l'anonymat ne doit pas donner lieu à de fausses attributions de paternité, notamment dans le cas où l'utilisateur-auteur indiquerait un autre nom que le sien, ou s'approprierait indûment la paternité d'une oeuvre. Le principe général étant la présomption de titularité au bénéfice de celui sous le nom duquel est divulguée l'oeuvre, le système Creative Commons ne permet pas plus que le cas général d'authentifier la paternité des oeuvres. La paternité indiquée dans une offre Creative Commons reste soumise à la bonne foi des utilisateurs.

Droit au respect

Autoriser à l'avance les modifications n'équivaut pas à aliéner le droit au respect. Le droit d'adaptation, traditionnellement cédé à l'avance, n'implique pas d'autoriser les modifications qui porteraient atteinte à l'intégrité de l'oeuvre ou à l'honneur et la réputation de son auteur. L'auteur qui aurait mis à disposition son oeuvre sous une offre Creative Commons autorisant les modifications et la création d'oeuvres dites dérivées, se réserve toujours la possibilité d'un recours fondé sur droit au respect, en cas d'utilisation ou de dénaturation de son oeuvre telle qu'elles lui porteraient préjudice.

Droit de retrait

Le droit de retrait, lui aussi d'ordre public, pourra toujours être exercé, même si le parcours de l'oeuvre rend son application encore plus difficile sur les réseaux. Celui qui propose l'offre de mise à disposition se réserve à tout moment le droit de proposer l'oeuvre à des conditions différentes ou d'en cesser la diffusion (article 7.b), dans le respect des offres précédemment consenties. L'auteur qui met fin au contrat Creative Commons devra respecter la bonne foi (9) des personnes qui auront dans l'intervalle appliqué le contrat qu'il proposait.

Droit de divulgation

Le titulaire des droits sur l'oeuvre conserve le contrôle du moment et des conditions de sa divulgation et de sa communication au public, non pour s'assurer de la réservation des droits exclusifs, mais pour rendre l'oeuvre libre de certains droits.

Certains pourraient se demander si la condition de Partage à l'Identique des Conditions Initiales ou ShareAlike ne constitue pas une atteinte au droit de divulgation de la personne qui, ayant accepté une oeuvre sous de telles conditions contractuelles, la modifie en apportant une contribution originale, et acquiert elle-même le statut d'auteur de la nouvelle oeuvre dite dérivée.

Le nouvel auteur conserve ses prérogatives et décide du moment de la divulgation de la nouvelle oeuvre. Il ne lui est pas interdit de la divulguer sous des conditions différentes, mais c'est à la condition d'obtenir une autorisation écrite de la part de l'auteur de l'oeuvre préexistante, comme dans le système juridique classique, hors Creative Commons.

Le contrôle de l'utilisation après divulgation en vertu des options Partage des Conditions Initiales à l'Identique (Share Alike) et Pas d'Utilisation Commerciale (Non Commercial) n'est-il pas incompatible avec le principe d'épuisement des droits ?

L'épuisement du droit de distribution prévu en droit communautaire établit qu'une fois l'original de l'oeuvre ou sa copie mise en circulation sur le territoire communautaire avec le consentement du titulaire de ce droit, par exemple après la première vente, il ne peut plus exercer ledit droit. Le titulaire ne peut donc exercer ce droit de propriété intellectuelle qu'une seule fois, il ne peut pas l'exercer à nouveau dans un autre Etat-membre. L'épuisement ne concerne que la distribution physique d'exemplaires matériels, de supports, à l'exclusion des services en ligne et des copies licites en découlant (Directive 2001/29/CE sur l'harmonisation de certains aspects du droit d'auteur et des droits voisins dans la société de l'information, article 4.2 et considérant 29). Le titulaire conserve ses autres droits patrimoniaux.

L'article 2 des contrats Creative Commons stipule bien qu'ils s'appliquent sans préjudice du droit applicable, et ne visent donc en aucun cas à restreindre ce type de prérogatives. On peut toutefois se demander si le fait de restreindre les conditions d'utilisation après la première mise à disposition respecte l'épuisement.

Tout d'abord, les options Partage des Conditions Initiales à l'Identique (Share Alike) et Pas d'Utilisation Commerciale (Non Commercial) ne conduisent pas à interdire formellement toute modification qui ne serait pas proposée aux mêmes conditions ou toute utilisation commerciale, ce qui reviendrait à imposer des conditions de distribution. Elles se contentent simplement de réserver les droits non proposés, qui continuent à requérir l'autorisation du titulaire des droits, à l'instar du droit d'auteur classique.

Enfin, on peut rappeler que la notion d'épuisement est utilisée en droit communautaire à des fins de régulation économique. Elle est utile dans les situations où un ayant-droit abuse de son monopole pour affecter le commerce et la concurrence en interdisant la commercialisation ou en imposant des restrictions quantitatives à l'importation ou des mesures d'effet équivalent. Les objectifs du Traité de Rome sont de lutter contre le cloisonnement du marché intérieur et les abus de position dominante. Sont visées d'un côté les entraves à la libre circulation des marchandises constitutives d'obstacles à la commercialisation sur le territoire national de produits régulièrement mis en circulation sur le territoire d'un autre Etat membre, et de l'autre la faculté de contrôler les actes ultérieurs de commercialisation et d'interdire les réimportations. Certaines restrictions ont d'ailleurs été admises par la Cour de Justice des Communautés Européennes ; ainsi, l'arrêt Cinéthèque (10) valide comme conforme au droit communautaire la loi française sur la chronologie des médias (11) qui impose un délai entre l'exploitation des films en salle et la vente ou la location de supports.

Quelle sera la loi applicable en cas de conflit ?

Il n'y a pas de clause déterminant la loi applicable et la juridiction compétente dans les contrats Creative Commons. Les règles de droit international privé prévalent, et, pour choisir la loi applicable, le juge saisi déterminera le lieu d'exécution de la prestation caractéristique du contrat, ou le lieu du dommage ou du dépôt de la plainte.

Les contrats Creative Commons prévoient à l'article 8c que si un article s'avère invalide ou inapplicable au regard de la loi en vigueur, cela n'entraîne pas l'inapplicabilité ou la nullité des autres dispositions, l'article en question devant être interprété de manière à le rendre valide et applicable.

Les clauses abusives sont réputées non écrites si le contrat conduit à établir des rapports déséquilibrés entre les droits et obligations entre un professionnel et un consommateur (12). Un raisonnement a fortiori permet de déduire que les offres Creative Commons satisfont ces exigences, ainsi que les exigences de prudence et d'information.

Un auteur peut se retourner contre la personne qui utilise son oeuvre sans respecter les conditions qui lui sont attachées. L'auteur qui estimerait qu'il y a eu atteinte à ses prérogatives patrimoniales pourrait toujours demander au juge une révision du contrat.

Le bénéficiaire du contrat pourrait également se retourner contre le donneur de contrat qui a transmis une oeuvre contrefaisante.

Notes

1. Dir. Gérard Cornu, Vocabulaire Juridique Association Henri Capitant, PUF Quadrige 4ème éd. 2003.

2. Voir Christophe Caron, Les licences de logiciels dites « libres » à l'épreuve du droit d'auteur français, Dalloz 2003, n° 23, p. 1556 et Melanie Clément-Fontaine, La licence GPL, mémoire de DEA, Université de Montpellier, 1999. http://crao.net/gpl/

Contra en faveur de la qualification de cession, Cyril Rojinsky et Vincent Grynbaum, Les licences libres et le droit français, Propriétés Intellectuelles, juillet 2002/4, p. 28.

3. Cass.1ère civ. 23/01/2001, Communication Commerce Electronique avril 2001 & A. et H.- J. Lucas, Traité de la Propriété Littéraire et Artistique, Litec, 2ème éd. 2001, n° 482.

4. CA Paris, 1re ch. B, 21-09-1990 : Jurisdata n. 023403, in Lucas, Traité de la Propriété Littéraire et Artistique, note 280.

5. Dir. Michel Vivant, Lamy Droit de l'Informatique et des réseaux, par. 875.

6. Loi n° 94-665 du 4 août 1994 relative à l'emploi de la langue française dite loi Toubon.

7. Cour de cassation, Civ.1, 4 avril 1991, affaire Béart, Revue Internationale du Droit d'Auteur, octobre 1991, p. 125 (cassation de l'arrêt d'appel ayant admis que l'auteur de thèmes musicaux renonce, par contrat, à être identifié comme tel auprès du public).

8. Hubert Guillaud, http://lists.ibiblio.org/pipermail/cc-fr/2004-January/000039.html

9.

Comportement loyal que requiert notamment l'exécution d'une obligation (Vocabulaire Capitant, op cit)

10. Arrêt de la CJCE du 11 juillet 1985, Cinéthèque SA et autres contre Fédération nationale des cinémas français, Aff. jointes 60/84 et 61/84, Rec. 1985 p. 2605.

11. Loi n°82-652 du 29/07/1982 sur la communication audiovisuelle, JORF du 20/07/1982, p. 2431, article 89.

12. L132-1 Code de la Consommation