Transora trumpets itself
The world's largest consumer packaged goods companies are slowly pulling back the curtains on Transora, unquestionably one of the most ambitious e-marketplace projects to date.
Transora executives are in the midst of a global road show, debuting the company and its capabilities to its more than 50 investor companies-among them some of the most marketing-savvy organizations on the planet.
Transora's investors include Procter & Gamble Co., Coca-Cola Co., General Mills Inc., Kellogg Co., Kraft Foods Inc., Nabisco Inc., Nestle Holdings Inc. and Quaker Oats Co. These CPG giants have funded Transora to the tune of $250 million.
Also invited to the tour stops are suppliers, many of whom are eager to assess how Transora will affect their b-to-b marketing and sales relationships with CPG customers.
"There's no doubt there will be some weeding out," Judith Sprieser, CEO of Transora told BtoB at the Chicago event late last month. "What will be left are the top quality, most capable suppliers."
"Suppliers are all over the map" on how they view Transora, said Shaw Skillings, VP-product supply and purchasing at Procter & Gamble, and one of the early architects of Transora.
"Some suppliers look at it as a huge opportunity to get access to business they feel they've not had a shot at in the past," Skillings said. "Others feel it's just an attempt by CPG buyers to cut supplier margins."
Not moving in lock-step
In fact, Transora represents just as big of a change for its CPG investors, who need to navigate and ultimately thrive in this new e-business environment.
Indeed, not every Transora investor is moving its e-business to Transora at the same speed.
Even P&G, which is betting in a big way on Transora as part of a massive e-business overhaul, is keeping its options open.
Although P&G will begin using most of Transora's service offerings, "as soon as they become available,"said Skillings, the company has conducted more than a dozen pilot auctions since mid-summer with other marketplaces, including FreeMarkets Inc. These trials have saved a total of $40 million, Skilling said, adding that P&G plans to keep just fewer than half of its most strategic supplier relationships operating over non-Transora, private marketplaces.
"We talk to Transora like other suppliers," Skillings said. "We want them to be successful, but Transora is a service provider and they need to be competitive."
Even with those cautious words, there's no doubt that P&G is counting on Transora in a major way. Reverse auctions will be a key use, as will sourcing aggregation. Another promising area is using the exchange for CPFR, or collaboration, planning, forecasting and replenishment programs. CPFR is a long-time goal of the CPG and retail industries.
"We have a good shot at finally doing CPFR right with Transora. We can set industry standards, all do it the same way, and save money in the process, "said Skillings, who believes that more effective planning can help manufacturers cut their on-hand inventories by 50% or more, a major boon to margins.
However, despite its new technologies, Transora has the potential to drive CPG manufacturers back to their competitive roots.
"Our customers will be using information to identify opportunities more quickly and to make the right decisions," said Transora's Sprieser, adding that once e-marketplace services are universally in place, manufacturers will go back to competing on the basics of "product, promotion and pricing."
Rapid ramp up
Transora is working furiously to get its marketplace off the ground, unveiling a slew of pilot programs, standards efforts and partnerships, including the choice last month of Ariba Inc. and i2 Technologies Inc. as its tech partners.
Transora now has more than 30 pilot programs under way, in areas including auctions, promotions and strategic sourcing. The company will roll out its core offerings as they become available. These include: procurement; logistics; consumer services, such as market research; supply chain management; retail services, such as promotions management; and financial services.
Transora's first commercial services will be ready within weeks, with more sophisticated offerings arriving up into next year, said Rick Herbst, Transora's chief business officer.
At the same time, Transora has been inking strategic partnerships.
Two weeks ago, it cut a deal with UCCnet, an industry group developing standards for e-commerce based on long-standing Uniform Code Council (UCC) labeling work. Transora will support UCCnet's location registry services and item data standards across its entire service offerings, cementing the industry standards. P&G is among the participants testing the UCCnet services.
Days after announcing the UCCnet project, Transora cut ground-breaking deals with two independent ingredient Net markets, Novopoint and Foodtrader.com.
Many independents complained to Transora that it had "thrown a wet blanket" over the market when it launched, said Rich Kauffeld, Transora's alliance lead executive. The partnership deals will help keep some of these independents alive, and further Transora's goal of acting as a central hub that links buyers and sellers to other hubs, as well as its own, he said.
Not a sure bet
These developments, and the impressive turn-out at stops on its kick-off road show, seem to demonstrate that Transora is off to a flying start. But its future is anything but a sure bet.
At least one CPG leader is approaching Transora quite conservatively. Coca Cola has not done any pilots yet, and will evaluate Transora's service offerings as they go live, said Jackson Cosey, Coca Cola's VP of e-business and e-ventures.
"Unlike some other companies, we're not looking at Transora to drive down the actual costs of our purchases," said Cosey. "We do a good job of that already because of our scale."
Rather, Coca Cola is looking at more cutting-edge services, such as very deep demand forecasting, that Transora can make a reality perhaps for the first time ever, he said. "We truly believe," said Cosey, "these exchanges will become the dominant way to do business in our industry."