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The Internet as a Purchasing Tool - Lessons from Japan
By William Christensen, C.P.M., Editor
E-Mail: chriswj@okstate.edu
URL (The Purchasing Station): http://management.bus.okstate.edu/faculty/christensen/

My comments this issue are based on an April 14, 1997, article in the Japanese newspaper, The Nikkei Weekly (Vol. 35, Number 1), written by Kaoru Morishita.

The Nikkei Weekly reported that, due to increasing price pressures, and the movement of Japanese production to offshore factories, many firms are feeling the need to find new, lower-cost parts suppliers.

Major Japanese companies such as Sony, Sanyo Electric (www.sanyo.co.jp), Brother Industries (www.brother.com), Yokogawa Electric, and many others have opened purchasing home pages on the internet as a means of finding and screening potential new suppliers, both within and outside of Japan. Hiroyuki Konishi, manager of the resource and materials division at Sony Trading International noted in the article, "Internet procurement is saving us time and money."

Besides buyers, small and medium sized suppliers, who find themselves losing business from their large, traditional buyers are using the internet to market their products to new buyers.

Japanese firms are listing parts requirements, providing contact info, communicating via email with new suppliers, and accepting bid proposals, all via the internet. Sanyo reports more than 1,500 hits per week on its procurement page. Over the past nine months, Sanyo has signed supply agreements with 10 new suppliers found via the Internet, and is currently negotiating with another 20.

Finally, in the Japanese spirit of cooperation, the Forum for Procurement Activity on the Net (FPAN) was established a year or so ago and now boasts over 120 participants, mostly buyers at major Japanese manufacturing firms. As an outgrowth of this joint effort, and with the aid of Kouji Miki, a student in the Graduate School of Media and Governance at Keio University's Shonan Fujisawa campus, the Global Procurement Open Market website was created in December 1996. The purpose of the site is to create a virtual marketplace in which registered buyers and suppliers exchange information, including offers and bids.

We at the Journal of Internet Purchasing applaud the pioneering efforts of the FPAN group.

William Christensen
Editor, JIP