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How to unlock the power of

the Internet

Fundamentally change how ProcurementProfessionals transact business today!

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Bettcher Industries, Inc.

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Definitions

Acronyms: B2B- Business to Business

B2C- Business to Consumer B2G- Business to Government

E - Electronic or using the Internet, (e-

Procurement, e-Commerce, e-marketplace)

SCM- Supply Chain Management

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Terms:

Closed Bid: Suppliers bid with no knowledge ofother competing bids

Open Bid: Suppliers see other bids before they bid

Reverse Auction: Suppliers see each others bids and bidthe price down in live bidding session

Model: Business Model

Exchange: Website that exists to bring buyers and

sellers together (no slant)

Buyercentric: Website model that has beendeliberately constructed to assist

buyers (i.e. reverse auctions)Suppliercentric: Website that has been designed to

function in the suppliers favor -usuallysupplier owned

Space: A particular e-marketplace (likeAmazon.com and Barnes&Noble.com)

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Successful E-Procurement at Bettcher

Search info for last two years Visited, took demo, registered, RFQ's, orders

MaterialNet.com for Raw Materials &SupplierOne.com for Custom Engineered parts

Intuitive and friendly-rare for transactional sites Placed RFQs and received e-mail responses in a

few days (located $250,000 savings in 6 weeks)

Reduced standard RFQ time from 2 hrs to 15 m. Free Services to the buyer (Free Data-Base

Software for Quoting History)

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What Make MaterialNet.com so

Great for Buyers!

MaterialNet.com

Other raw materials

Only site to use for

Multi-Metal requirements

Break-through Customer

Service

-"Load your own suppliers"

-Will become hub for all

Purchasing Trasactions

-Forward Auctions for surplus

Reverse Auctions &

Beat This Price Function

Buyercentric

(Free to Buyers)

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My MaterialNet.com Experience

December-Had tried 30 other metal

websitesGood demo made it easy to understand

Registered & sent in RFQ

First time no price reduction

Beat-This-Price e-mail, Saved $3,000 on

order (We standardized on MaterialNet)Told buddies that run Purchasing at larger

companies-(Saved over $10,000 each)

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What Makes SupplierOne.com so

Great for Buyers!SupplierOne.com

Only Outsourcing site

that hasn't lost a drawingI faxed or e-mailed them

Only Outsourcing sitethat adequately matches

part specifications with

supplier's mfg capabilities

Break-through CustomerService

3 Options:

-Only current approved suppliers bid-Only SupplierOne's suppliers bid

-Both groups bid

Reverse Auctions &Classic Closed Bid Function

Buyercentric

(Free)

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Contract Management (RFQ)

Raw Materials FOB your dock

Give Target Price (ReservePrice)

All surcharges or extras mustbe on quote

Certs required on RFQ Specify only US material

(when appropriate)

Specify packagingrequirements

Specify only regionalcompanies or existing suppliers

Get D&B

Engineered Components FOB your dock

Give Target Price (ReservePrice)

All surcharges or extras must beon quote

Certs required on RFQ Specify ISO9000 & QS9000

when appropriate

Have Quality certificates faxed

Specify only US bidders,regional (or existing suppliers)

Specify packaging requirements

Get D&B

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Hazards to Avoid

Sites whose management have little industry experience

Sites that charge Buyers and Suppliers fees (double

dipping) Sites that charge Buyers fees (unless their value is

unmistakable)

Suppliercentric Models (look for suppliers to have largeequity stakes in these sites)

Sites with Unreasonable Terms and Conditions

Such as Buyer will Pay commission to site if sellerfails to

Hidden costs to Buyer

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Fundamental Shift in Power

These two sites (Buyercentric) are prime examples

Relationship selling is being replaced byquantifiable results contracts

Non-value added distribution is panicking &

consolidating for greater buying power ERP & Consortiums allowing buyers to go direct

to manufacturers (skip distribution) for big savings

Purchasing salaries will start to displace theinflated Marketing and Sales salaries of the past Look how MaterialNet & SupplierOne make marketing

obsolete

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The Future (Sooner than we think)MRP or ERP electronically transferred to

these sites

We have auctioned or contract pricing

returned in a couple of hoursPOs are one click away

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Points to Remember

Use Buyercentric sites

Be thorough on RFQ (include all req. info)Set target prices for suppliers (Be realistic)