MALAYSIA--Electronic supply chain management service provider Tradenex.com is targeting local small and midsize businesses (SMBs) to tap on its e-commerce collaboration platform.
|[SMBs] don't have supply chain and collaboration applications. Even if they have it, it is usually because their [big] customers are forcing them to use it.|
In particular, the Kuala Lumpur-based company sees much growth potential in Malaysia's retail and healthcare sectors.
Tradenex CEO Soon Koi Voon said while SMEs are the driving force of the economy, they are still "very lacking in terms of technology adoption".
"Most don't have systems which help automate internal processes," Soon said in an interview. "They don't have supply chain and collaboration applications. Even if they have it, it is usually because their [big] customers are forcing them to use it."
Being part of business-to-business (B2B) supply chains is not a priority for many SMEs, he said, despite the fact that doing so would enable them to lower cost and to service customers better.
Tradenex.com is a subsidiary of Federation of Malaysian Manufacturers (FMM), and provides online and backend collaboration services that allow organizations to connect and communicate, via platforms that automate business transactions.
Its e-commerce platform, nexCONNECT, facilitates communication between standards-based data and applications across disparate platforms and across multiple enterprises. The platform allows companies to exchange data between internal and external systems, automate business processes, track and monitor business messages, and manage trading partner profiles.
Given that SMBs are not very savvy in their IT spending, Tradenex has sought to lower the cost of entry to its e-business platform, Soon said. Depending on their needs, an SMB's cost of entry into the nexCONNECT community could be as low as a "few hundred [Malaysian] ringgit", he said.
According to Malaysia's Department of Statistics, SMBs account for 99.2 percent or 518,996 of the country's total establishments in the three main economic sectors: manufacturing, services and agriculture. Most of the SMBs (86.5 percent) are found in the services sector, followed by manufacturing at 7.3 percent.
To date, about 600 customers from the manufacturing, retail and logistics industries have signed up to connect to nexCONNECT, Soon said. He added that Tradenex is bullish the figure could run into the thousands in the near future.
Soon added: "[For example], interest is tremendous especially on the retail side." The company is currently integrating a local hypermarket operator into the nexCONNECT supply chain platform.
"This company has hypermarkets, supermarkets and sundry shops throughout Malaysia. They have a base of thousands of suppliers, who will have to get unto the [nexCONNECT] system in stages," he said.
"The entire collaboration process will be done electronically," Soon explained. "This won't just entail processing of purchase orders and invoices. We are adding new and richer features, for example, product synchronization [which is important] in the retail environment, where pricing and configuration of products are very dynamic."
He added that Tradenex is also looking to expand in the healthcare industry. "This industry is unique. In a normal industry, if you are out of stock, you just lose a business opportunity. But in the healthcare sector, if you run out of stock of medical supplies, the patient might die," he said.
"However, there is also the issue of ordering too much supplies and this can become very costly," Soon said. "Hopefully, nexCONNECT can help address these issues."
According to the CEO, Tradenex has been setting up trials with prospective hospital clients. He noted that while most Malaysian private hospitals had well-automated internal processes, many do not have collaboration tools.
To generate greater demand from SMB customers, TradeNex is looking to expand the functionalities of nexCONNECT, particularly in the areas of sales force automation and business development outsourcing.
The company recently established a strategic alliance with German-based global business integration services provider Seeburger Asia-Pacific, in a bid to boost its nexCONNECT platform by integrating with the B2B supply chains of large multinational corporations.
Seeburger has an installed base of over 7,000 customers across 15 verticals, including aerospace, high-tech, automotive, retail/consumer product goods, pharmaceutical and logistics.
Soon said: "Partnering with Seeburger is a strategic move in our effort to provide Malaysian companies with world class supply chain solutions--in tandem with their eventual need to integrate into business ecosystems consisting of large multinationals."
Lee Min Keong is a freelance IT writer based in Malaysia.