Debuts On The Web

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  • Published: Debuts On The Web
S. McVey - May 30, 2000

Event Summary, a new Internet marketplace offering value-added services for buyers and sellers in the chemicals industry made its debut recently. The new company is headquartered in The Netherlands but will offer its services worldwide to participants of the trillion dollar global chemicals industry. Powering its new site are two giants in the business-to-business technology market, IBM and i2 Technologies. is one of the first industry-specific subscriptions-based forums where buyers and sellers can meet, share information, exchange goods and services, and ultimately run critical supply chain operations of their businesses. As of May, the site offered little beyond descriptions of its planned features that were to be rolled out by the beginning of June, an ambitious goal given the scope of the services.

Four "value chain services" to be offered through the site will cover commerce, procurement, supply chain management, and fulfillment. Commerce and procurement services are targeted for sellers and buyers, respectively, and probably have the best chance of short term success. More difficult to deliver will be its supply chain management and fulfillment services, which aspire to allow subscribers to optimize interactions with trading partners to improve forecast accuracy, optimize inventory deployment, and track orders and shipments. Part of the difficulty lies in the novelty of performing mission critical activities over the web and the hype surrounding the benefits that can be achieved.

Market Impact

The scope and ambition of ChemicalsWorld eclipses that of, Aspen Technology's venture for the process industry launched just three months ago. ProcessCity has a wider industry focus than ChemicalsWorld, but does not attempt to offer a business-to-business marketplace or services such as inventory optimization and shipment tracking.

In providing the underlying technology for ChemicalsWorld, i2 with IBM are now operating in the same market as Commerce One and Concur, which may hasten these companies and others to form alliances with supply chain management software companies to be able to offer optimization and execution services beneath e-commerce storefronts. Commerce One has already formed such an alliance with Adexa, Inc., although the timeframe for delivering an integrated product is unknown.

An important issue for prospective subscribers to and one that has yet to be demonstrated is how cleanly i2's optimization services map to chemicals industry requirements. Without these advanced features, ChemicalsWorld will be unable to differentiate itself from other portals and charge premium subscription fees.

A larger issue concerns how comfortable i2 will be in creating potential competitors for its own industry-specific portals, although it has not ventured into the chemicals sector, preferring instead to focus on complex, discrete parts manufacturing and retail sites.

User Recommendations

In the short term, ChemicalsWorld will be a useful destination for chemicals process industry professionals who will benefit from the content aspects of the portal. In order for it to metamorphose to be the critical platform for supply chain services it intends, a substantial number of companies need to subscribe as buyers and sellers to attract other companies to sign up for its commerce and procurement activities.

Of its remaining services, fulfillment will likely be the next area to provide measurable value to companies who subscribe to track orders placed online and delivery statuses of goods. Supply chain management will require more effort among suppliers and customers who intend to collaborate on forecasting and replenishment, which will require them to share sensitive information over the Internet, something that carries a significant degree of risk with the current state of Internet security. Users should understand clearly's security measures before signing on for these services.

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