By Harald Thaler
March 19, 2001A revolution is sweeping through the power generation equipment industry in Europe as OEMs and turnkey contractors seek to transform themselves from traditional equipment and service suppliers into leaner, Internet-enabled enterprises reaping the benefits of increasing on-line collaboration with their supply chain and customers.
Many participants in the European power generation equipment industry have already started to implement e-business initiatives in order to boost profitability. Companies that successfully implement Internet-based working processes in their organizations are set to reap substantial competitive benefits, while those that do not take advantage of the cost-saving opportunities offered by e-business tools are expected to come out as losers in an accelerated process of consolidation.
Frost & Sullivan’s thorough investigation of e-business strategies of power generation equipment manufacturers, packagers and contractors evaluates the development of e-procurement and e-sales across three different segments of the European power generation equipment industry:
– International Multiple Segment (IMS) OEMs
– Focused Product Group (FPG) OEMs
– Packagers and Turnkey Contractors (P & C)
An essential element of the study is the detailed e-procurement and e-sales forecasts through 2007, highlighting the key strategies companies are implementing as they revolutionize their supply chain and gradually transfer sales on-line. Frost & Sullivan also assesses the impact of on-line exchanges and marketplaces in the energy industry and provide a detailed examination of all the leading B2B marketplaces relevant to the power generation equipment industry.
The analysis looks at independent, OEM-driven and utility-driven marketplaces and offers an insight into the present and future adoption of exchanges and marketplaces among Europe’s OEMs and turnkey contractors. The study focuses on power equipment suppliers’ e-procurement and e-sales strategies The study also provides an analysis of the key drivers and restraints of e-business in Europe’s power generation equipment sector and describes the challenges faced by the different European power equipment segments when seeking to deploy e-business tools.
An examination of on-line B2B developments in other vertical industries is also provided, with the study exploring what lessons can be learnt by the power sector. Introduction of E-Procurement for Direct Materials
Our analysis has revealed that IMS OEMs and international turnkey contractors are furthest ahead in the adoption of e-procurement. Whilst mostly starting with the procurement of indirect goods and services, companies are rapidly moving towards on-line purchasing of direct materials and services. Growth is expected to be particularly high in 2001 as some of the leaders’ procurement portals gain traction through the ongoing connection of suppliers and progress in cataloguing standard parts. Only a small number of FPG OEMs, meanwhile, commenced on-line purchasing activities in 2000, with many more preferring to wait until e-procurement solutions are adopted more widely and more first-hand evidence emerges about their business benefits.
Customer-Facing Internet Initiatives and E-Sales GE Power: Leadership through GEPartsEdge
IMS OEMs are also ahead in the adoption of customer-facing e-business initiatives, with most activity so far in the aftermarket arena where GE Power has taken the lead with GEPartsEdge. Moreover, a few leading IMS OEMs already offer, or are planning to shortly launch, on-line configuration tools enabling customers to configure power plants and, as a next step, also individual components, such as gas turbines.
The research has revealed that most FPG OEMs are still in the very early stages of developing e-sales although some of the more proactive companies in this segment plan to establish their own marketplaces that will link them with their main customers, with the ultimate aim being a marketplace incorporating suppliers, dealer and customers in an integrated supply chain solution.
In the P & C segment, meanwhile, large turnkey contractors are looking to sell associated services on-line, while locally-based packagers and genset companies have no clear perspective on selling equipment on-line, although some firms in this group plan to launch on-line parts sales in the near term.
To receive details of this study, please contact: Leah Brisco Frost & Sullivan Media Relations Executive Industrial Research (t) 210.348.1015 (f) 210.348.1002 (e) email@example.com
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