GXS Inks Supply Chain Deal for Chinese Steel

Global Exchange Services Inc. has expanded its supply chain presence in the Asia-Pacific region through a deal to install and run an online trade exchange for Baosteel Group Corp., the biggest iron and steel provider in China.

GXS agreement is actually with Bsteel Online Co. Ltd., Baosteels four-and-a-half-year-old Internet services arm.

Specifically, the deal calls for GXS, a services provider based in Gaithersburg, Md., to develop a business-to-business gateway and supply chain services center for connecting Baosteel to its suppliers.

GXS officials declined to attach a dollar value or time frame to the deal, but they indicated that the arrangement could be long-term and lucrative. “Weve identified about 200 [Baosteel] suppliers,” said Nick Marchetti, GXS vice president of trading grid and integration solutions, in an interview with eWEEK.com.

Ultimately, GXS will be supporting both outbound supply chain activities with customers and inbound supply chain activities with suppliers, said Richard Zhong of GXS arm in China.

“Usually [in GXS deals], there is a software agreement with an upfront fee and a contract for professional services that is licensed on an annual basis,” Marchetti said. “Some of our customers have been with us for eight to 10 years.”

Baosteel will initially use GXS Enterprise System, a data translation, transaction routing, and BPI (business process integration) component of GXS Trading Grid. Trading Grid is a global network, designed for gaining better supply chain visibility, with interconnects to outside systems ranging from WebForms to EDI and SecureFTP, he said.

Later in 2005, Baosteel is expected to move to the J2EE (Java 2 Platform, Enterprise Edition)-enabled GXS Enterprise Next Generation.

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GXS is looking at “pushing out” Baosteels trading exchange in both inbound and outbound directions, particularly among partners that havent yet established online trading solutions of their own, Marchetti said. Baosteel serves customers in the auto, oil, construction, shipbuilding and global appliance industries.

But trading exchange connectivity will start on the supplier side, especially among larger partners. Typically, these big enterprises have SAP or other enterprise resource planning systems already installed.

Some smaller businesses, on the other hand, tend to have very little previous exposure to e-commerce, Marchetti said. In some instances, GXS ultimately arranges to manage trading exchange operations for a customers smaller partners.

GXS has been active in Asia-Pacific e-commerce markets for the past 15 years, according to Marchetti.

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