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by Debra Kelly, MA Editorial Staff   | Abstract: | Breaking through the e-market with scientific strategic sourcing, Emptoris is now gaining raves and revenues with its Emptoris 5 product suite. |
Watching overeager vendors and manufacturers jump full speed into the uncharted territory of the late '90s e-market, Avner Schneur, the founder, president and CEO of enterprise supply management company Emptoris (Burlington, MA), felt that people had taken this revolutionary concept to the extreme, and the results were unimpressive. "I used to joke that people buy lightbulbs and steel over the Web," he says. "I saw the e-market model and I knew that wasn't the way companies were buying for strategic goods. It sounds good, but it's not reality. There are better opportunities than going on the Web and asking for lightbulbs." And so, in 2000, Emptoris was born. Focusing on the long-term relationship that a company has with the goods and services it buys, which introduces many elements beyond price that require consideration, Schneur worked with Gary Li, now Emptoris' vice president of development, to find the total cost of ownership (TCO) model for strategic sourcing. "When you buy goods, it's not just about price," says Schneur. "What about the cost of shipping and warranty, and the customer service behind it? It is quite complex. How do you factor in all these elements?" According to Schneur, buyers are relying on suppliers more and more to help them understand where they can find the most benefits. But, he asks, "Do the suppliers have more knowledge than the buyer?" This is where the Emptoris 5 product suite comes in. "We have formulated an application that allows the buyer, in an easy way, to encapsulate the complexity. Suppliers bid on it the best way they can," says Schneur. [Click to continue] |