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Company established to administer electronic procurement sites for pharmaceutical firms
- Intended to set industry standard, strengthened by expertise of Takeda Chemical Industries, Ltd. -
JGC Corporation
NTT COMWARE CORPORATION
JGC Corporation (President: Yoshihiro Shigehisa) and NTT COMWARE CORPORATION (President: Yuji Matsuo) have agreed to establish a company to administer procurement sites for pharmaceutical firms and other companies in the life science industry.
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In October 2000, JGC Corporation (hereinafter, JGC) and NTT COMWARE CORPORATION (hereinafter, NTT COMWARE) jointly deployed Smart EDI ( *3 ), an ASP EDI ( *2 ) system developed by NTT COMWARE for use in the life science industry, including research institutes and pharmaceutical firms, as the first step in the implementation of Pharma-X ( *1 ), a pharmaceutical company management support service line.
Conventional EDI applications, which place business processes on the system, do not themselves reform the procurement infrastructure in the pharmaceutical or manufacturing industries in Japan. However, multi-catalog sites must resolve several issues, including the limitation of product selection to industry-specific choices, relationships with existing suppliers, and data exchange with accounting systems.
One objective of this site is to reform the procurement infrastructure on behalf of client companies (buyers). The new company owns and administers procurement sites that deal with the procurement of general materials, system operations, system support, and payment settlements by connecting clients' systems with companies over the Internet to deliver aggregated procurement orders via the client company's intranet. In other words, client companies can outsource their procurement operations to this company. The company handles unit price negotiations, product selection, and other related tasks through neatly arranged lists by the buyer. Based on current business practices, the service will improve the IT readiness of suppliers' business operations, and enable suppliers to painlessly reform their procurement infrastructure.
The success of these types of services vitally depends on a high level of trust and confidence among buyers and suppliers. Therefore, participation from Takeda Chemical Industries, Ltd., one of the leading pharmaceutical firms, is very significant. JGC, NTT COMWARE, and Takeda Chemical Industries, Ltd. concluded the agreement this month.
Detailed information about the establishment of the Company is provided below:
1. Company Profile
(1) Established: December, 2001
(2) Company name: (pending)
(3) Capital: ¥300 million
(4) Ratio of investment: JGC (51%), NTT COMWARE (49%)
(5) Directors and officers: JGC and NTT COMWARE will assign three representatives each.
2. Business Activities
The Company provides services to companies in the life science industry, such as pharmaceutical firms, by administering electronic procurement sites for general materials, primarily non-manufacturing related (office supplies, general consumables, laboratory instruments, office furnishings, OA equipment and materials, electric appliances, repair tools, operations, security, and reagents). Manufacturing materials are dealt with at buyer's request. Business activities are broken down into procurement, system operations, system support, and payment to suppliers. Site owners will realize revenue from procurement commissions charged to buyers and site management fees paid by suppliers.
3. Roles of JGC and NTT COMWARE
JGC and NTT COMWARE will play the following roles in this site business:
(1) JGC
Working out fundamentals for the site framework
BProviding project management services (scheduling and cost management)
(2) NTT COMWARE
System development for the site
Providing system maintenance and management services as the data center
4. Business Planning
In order to establish this site as a defacto standard for the target industry, JGC and NTT COMWARE will solicit the knowhow of Takeda Chemicals Industries, Ltd., as the leading user, to more clearly incorporate the needs of buyers in the construction of the site. In the months ahead, both partners will proactively invite participation from other pharmaceutical firms in this site. A turnover of 50 billion yen in five years, by 2005, is projected. In the meantime, deployment activities will be concentrated on the life science companies, with future deployment extended toward universities and hospitals.
5. Significance of Company Establishment
JGC has aggressively developed its business focusing on the establishment of a stock-type business in new business domains in addition to cumulative achievements in EPC services for industrial plants/facilities (design, procurement of equipment and materials, and construction works). JGC places high priority on the business activities of the new company as a part of its IT business strategy.
NTT COMWARE plays a core role in the sophisticated home information and telecommunications systems, and has been promoting the wide-ranging use of ASP businesses with its large-scale proprietary data center framework. It sees that the establishment of the new company is an excellent opportunity for offering manufacturing solutions to the pharmaceutical industry. This business is extremely significant for both companies.
JGC and NTT COMWARE, are firmly committed to jointly ensuring the successful deployment of this type of IT business in the pharmaceutical industry.
Glossary
*1 Pharma-X
A Web-based business site for providing the pharmaceutical industry with inbound and outbound flows of information on research and development and manufacturing activities and for offering business solutions to customers. Smart EDI, described below, is the first step in the deployment of an electronic procurement solution.
*2 ASP EDI
Service providers own and operate data exchange facilities at a data center to provide users with data interchange services via the Internet. Users benefit not only from the use of the service without having to construct and maintain their own dedicated facilities, but also from reduced investment and costs of professional engineers.
ASP (Application Service Provider)
Service providers host application software on their sites for customer use via the Internet, thereby reducing purchasing expenses of user software.
EDI (Electronic Data Interchange)
Interchange of business-to-business commerce data via online networks.
*3 Smart EDI
A bundle of services at a data center which provide the functionality required for business-to-business electronic commerce via the Internet.
Any company, regardless of size, which is equipped with Web terminals can easily enjoy EDI functionality at low cost. |
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