WORLDWIDE E-MARKET FOR B2B SET FOR 4TH QUARTER

DAVID ORGEL

NEW YORK -- Organizers of a high-profile global e-marketplace for the consumer-products industry last week said the business-to-business venture will launch early in the fourth quarter and rapidly add services.

At a press conference held here last week, the venture, first announced about three months ago, was given a name: Transora.com (trans for crossing or movement and Ora for boundaries, based on its origin in the Greek language).

Organizers laid out a scenario of rapid buildup in Transora's offerings, beginning with a focus on building procurement savings and growing into a vehicle for applications ranging from product cataloguing to collaborative planning, forecasting and replenishment.

"This is the next generation of business," R.A. (Rick) Herbst, vice president and general manager for e-commerce at Kellog Co., Battle Creek, Mich., said at the conference. "We'll be transforming activities throughout the value chain."

"This is a transformational exchange," said Judith Sprieser, executive vice president of Sara Lee Corp. and chairwoman of the Transora steering committee. "Transora will change the fundamental economics of the consumer packaged-goods business ... It will connect us with our suppliers and our customers."

The goal of Transora is to improve efficiencies in the consumer-products industry value chain, which incorporates more than $1.3 trillion in annual transactions. The project will target, according to organizers, areas including inflated procurement costs, high administrative costs, large "safety-stock" inventories, and inefficient media buys. Transora, whose formation was facilitated by the Grocery Manufacturers of America, Washington, is promising very low transaction costs and service fees.

Among other details disclosed last week:

Executives said Transora, which will be a for-profit company, has drawn nearly $250 million in funding from some 49 participating companies. These equity participants include many well-known consumer-products firms, such as Coca-Cola Co., Procter & Gamble and Kellog. The investing companies represent more than $500 billion in annual sales.

Transora will have beta tests in August and September and will be formally launched either in September or October, with procurement the initial target, Stephen David, chief information officer of Cincinnati-based P&G and a Transora board member, told SN in a telephone interview. "Over the next two to three years we estimate 5% to 15% savings are possible for companies," he said. "But this initiative can also help eliminate company rogue purchasing departments for local procurement that aren't getting the best prices, amounting to another 2% to 5% of savings for companies."

In addition to procurement services (including direct and indirect procurement, auction and vendor catalog), Transora will eventually add retail- and consumer-marketing services (such as product catalog and on-line order management); supply-chain collaboration services (such as CPFR); and financial services and customized data.

Transora has yet to name a top executive although the trail is warm, executives said. "The search is active through a search firm and a decision will be reached soon, but there is no recommendation on a CEO yet," said Betsy Cohen, vice president and futurist at the Extended Enterprise Group of Ralston Purina Co., St. Louis. There is also no decision yet on where Transora will be based or on the size of the management team, executives said.

Many of the exchange's investors are global companies, but Transora will make a particular effort to further extend its global reach, executives said. Those developing standards and functionality for Transora will take careful note of conventions around the world.

Transora will be based on industry standards, "so that the vision of EDI comes to life," David said. It will work with UCCnet and other organizations to drive the process and with major retail exchanges -- including GlobalNetXchange and Worldwide Retail Exchange -- "to define the processes to be standardized."

"They are our customers, and our marketplace will interface with theirs," said Richard Kauffeld Jr., president of the e-team at Campbell Soup Co., Camden, N.J., during the press conference.

Transora will ultimately enable large reductions -- up to 50% -- in supply-chain inventory and time lag, David said.

"Currently, the industry stocks inventories as a replacement to having the right information," said Sprieser. "There's $1 trillion in safety stock of inventory now. The Internet can eliminate all this."

Executives also stressed that Transora is an "industry-led solution" owned by industry players as opposed to financial companies or venture capitalists.

The concept that eventually became Transora was born at a meeting of the Electronic Commerce group of the GMA. The association was instrumental in the exploration stages for the project and facilitated the formation of a committee that worked with Pricewaterhouse Coopers and developed a business plan. Transora will operate as a separate entity from the GMA.

"We want to support the exchange and continue to have a working relationship," C. Manly Molpus, president and CEO of the GMA, told SN.