Matsushita moves $21bn supply chain online

NEWS Consumer electronics giant, Matsushita, has revealed plans to spend $21bn with online suppliers each year, saving the company up to 65 per cent on procurement costs. The parent company of JVC and Panasonic claims the move is driven by a desire to cut costs. Hasnain Merali, analyst at Datamonitor, said it represents a major shake-up: "Matsushita will see cost savings of between 40 and 65 percent in its first year - if it takes advantage of cheaper suppliers, speedier delivery and all the benefits of bulk-buying online." The move will affect all its global operations, including all ten of its subsidiaries, and although no official announcement has yet been made, analysts agree that Matsushita is likely to use a software solution from either Ariba or CommerceOne. Both agencies boast an online network of up to 100,000 suppliers, and claim they can reduce the time taken to deliver an order to three or four days. Thomas Power, chief knowledge officer at The Ecademy, said: "Matsushita is one of the first Japanese companies to make this move, and it is good to see. I want to see the fat being removed in the supply chain, so consumers can expect discounts." Panasonic and JVC were unable to comment on how Matsushita's decision will affect their pricing schemes, but Datmonitor's Merali confirmed that cost savings are likely to be transferred to the consumer. "I think the consumer will see some of these savings. Matsushita is also likely to invest some of the savings into new technologies, and still have considerable profits left over," he said.