An Internet-based Bidding and Procurement System for the Tile Industry’s Supply Chain

This paper describes intermediate results of the European project e.bip (IST-1999-10710), which aims to innovate the bidding and procurement processes of tile layers by establishing a new broker service in the supply chain of the tile industry. The paper outlines the concept and functionality of the overall e.bip system, i.e., of the “Master Broker System” (a web-based information broker) and the supportive tools for connecting end users’ legacy systems with the marketplace as well as the internet enabled bidding and procurement application for tile layers. It will also describe first results from testing the system in pilot projects in the tile supply chain. INTRODUCTION The bid preparation and procurement process of SMEs in the construction industry is still predominantly based on traditional approaches, tools and communication channels and thus offers different potentials for improvement [Segev et al 1998]. The European RTD project e.bip (Efficient Bidding and Procurement in the Tile Industry Practical Trading Tools and Broker Services for the Exchange of Product Characteristics, IST-1999-10710) addresses this situation and aims to introduce advanced ICT based support for all procurement and order processing activities in the tile construction sector and to show the opportunities of electronic commerce in overcoming today's structural problems in this sector. Thus, e.bip aims to help companies to improve their current business processes as well as foster the co-operation between manufacturers of tiles, wholesalers and tile layers. This paper describes related work and industrial state-of-the-art, outlines the e.bip system architecture and the application developed as well as the pilot approach used to evaluate and test the e.bip applications. The conclusion will summarize the project’s key results so far and the next steps to be performed. RELATED WORK AND INDUSTRIAL STATE-OF-THE-ART The software market for tools for bidding and procurement offers a large variety of solutions and we can distinguish basically two areas of applications: On one hand, there are numerous tools which support the bidding and project phase of construction projects – either for construction in general or for specific craft sectors. These tools are used by individual companies for their own bidding and project work and are well accepted, but they hardly consider supply chain aspects [Weber et al 2000]. On the other hand, there is an increasing number of internet marketplaces which offer products and services, support cooperative processes and introduce new business models [Feld, Homann 1999], [Vetter, Pitsch 2000]. Although the adoption of these Internet and Web-based technologies is poor at the moment, the general attitude of SMEs towards its use is positive [Gebauer et al 1998] and case studies confirm the potential of e-commerce in procurement [Eyholzer 1999], [Gebauer, Färber 2000]. However, the integration of the two areas is still weak and the re-use of bidding data in subsequent procurement, order processing and project tasks is currently rarely supported. On the technological level, the product representation on electronic marketplaces is still limited and far away from what craftsmen and customers are used to from physical product presentations in show rooms. While considerable research is carried out for improving navigation in product data [Stanoevska-Slabeva, Schmid 2000], product representation still focuses on brief textual information on major product characteristics and is sometimes enriched with a small product photo. However, the quality of these photos is so low that they can hardly give an impression on the real appearance of the product. This is less critical for standardised, functional products (say e.g. tile mortar, silicon), but becomes more important for fashionable, design oriented products like tiles, where colour and texture are essential attributes [Zabel et al 2000]. In order to solve the basic problem that no two devices (screens, printers, etc.) produce the same visual colour from the same digital values, the concept of colour management has been introduced and standards have been developed by the International Color Consortium [ICC 1998]. It improves the exchange and reproduction of images across a wide range of industries. However, its application is mainly limited to the area of desktop publishing and design, and it has been hardly taken up for practical usage in traditional business processes of small enterprises which face difficulties in making multimedia data available in day-to-day business pressure. The e.bip system aims to overcome these weaknesses by introducing better integration and product representation for internet marketplaces, bidding and procurement tools. SYSTEM ARCHITECTURE The e.bip system architecture (cf. figure 1) consists mainly of three different functional components. The Master Broker System is a central stand alone online broker service that can be accessed through the World Wide Web. The Seller and Buyer Client Modules connect the Master Broker System with existing back office solutions. A local application for bidding and procurement (“e.bid”) supports the daily business of building contractors and exemplarily shows how users can benefit from an integrated information exchange with the Master Broker System. For a detailed description of the different roles in this process, please refer to earlier work of the authors [Zabel et al. 2000]. All Users Webbrowser Wholesalers/Retailers/Traders