Quadrem is a global Internet-based electronic transaction platform linking buyers and suppliers in the mining, minerals and metals industry in more than a hundred countries.
The company is targeting the facilitation of a total of $15-billion-worth of transactions over the next three years, he tells Mining Weekly.
“We have technical teams in place to assist our client companies in getting their information technology systems and networks to communicate with the e-marketplace, and we expect most of the integration projects to be complete by year-end so that transacting can take place more robustly,” adds Efting.
The 21Quadrem shareholders – most of which are based in South Africa, Australia and Brazil – are all in the process of beginning or finalising their integration projects, as are the 130-or-so suppliers committed to the venture to date.
South Africa is one of the most successful regions in terms of the implementation phase, probably as a result of the commitment of De Beers and Anglo American to the venture and the quality of the local Quadrem team, he observes. “Whereas, last year, the focus was on planning and preparation, which included setting up our headquarters and opening our offices all around the world, 2001 is all about integrating buyers and suppliers to the marketplace.
“We are in the process of integrating our 21 buying organisations, and are busy on-boarding suppliers by helping them understand the value of our proposition and getting their catalogue content in order,” explains Efting.
Quadrem has a global target of boarding on 400 suppliers by year-end, and the marketplace is well on its way with roughly 130 committed so far, he indicates.
Worth noting is that the 51 current integration projects involves facilitating communication between the e-marketplace platform and about 50 different back-end computer systems utilised by the e-marketplace’s buyers and suppliers.
The efficiency of this communication system is critical, as the e-marketplace has to enable transactions 24 hours a day, seven days a week, regardless of geography, language or currency.
A common catalogue structure allows buyers and suppliers to communicate and transact electronically, while the e-marketplace system is linked directly to the participants’ back-office systems or through middleware software, resulting in a complete automated purchase-to-pay cycle.
Catalogues are recorded in UNPSC format and data will be transferred in XML format, while firewalls will ensure the security of data.
One of the world’s largest business-to-business electronic communities, Commerce One is the technology partner of the e-marketplace.
Quadrem Africa regional vice president Elmo Erasmus points out that the paramount goal of this marketplace is to yield sustainable value for its owners, buyers and suppliers.
“It is our task to ensure that this objective is achieved through local presence and sterling support to both buyers and suppliers,” he maintains.
Besides the regional office in South Africa, there are others located in Australia, Brazil, Canada, Chile, France, and the US, while Quadrem’s corporate headquarters are based in Bermuda – a neutral base, and Dallas, Texas, in North America was selected as the ideal location for the management head office.
Erasmus indicates that the buyers will benefit from the venture as a result of optimised pricing and the consistency thereof, reduced lead times and stockholding costs, improved redundancy disposal, improved contract compliance and procurement operational efficiency.
Some 14 buyers initially formed the e-marketplace with the aim of streamlining and automating their procurement processes, while sharing the costs of the implementing the technology that enables this to be done.
However, the supplier also benefits from the venture, as it will achieve revenue growth due to global exposure, reduced marketing and selling costs, improved contract compliance and surplus stock disposal, and improved planning, production and sales efficiency.
Registration as a supplier on the e-marketplace does not cost anything, although sellers do pay to join, but there is a yearly sliding-scale subscription fee for all participants that is based on yearly turnover, and there there is also a transaction fee that is a percentage based on the total of the transaction value.
Bulk materials-handling equipment manufacturer and contractor Osborn, of Johannesburg, is one of the local suppliers signed up to the e-marketplace.
“Quadrem represents a large share of our customers in the mining, minerals and metals market and it, therefore, made sense for us to join this portal as a step towards Osborn’s e-commerce initiative,” comments Osborn MD Alan Forsyth.
It is also the largest mining consortium portal currently online and the investment in time, money and people made by the mining companies are a clear indication of their support of the e-marketplace, he adds.
Forsyth concedes that his company does not anticipate observing an instant change which will realise immediate advantages, although benefits are expected that will help the company meet its long-term supply chain objectives. Efting suggests that suppliers are often bewildered by the number of e-marketplaces approaching, while, simultaneously, independent analysts predict a dramatic decline in the number of portals as a result of consolidation, for example.
Nonetheless, in August last year, Quadrem was listed among the 20% of ‘low risk of failure’ portals based on analysis conducted by an independent research company. “What we have seen over the last year is that venture capital dried up for start-up companies, however, since Quadrem is financed by its shareholders, it should be more successful because of the committed market and the capital at its disposal to enable long-term growth,” he surmises.