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News of  May 30, 2001

PSA Peugeot Citroën's B2B Strategy

• Partnering the Covisint marketplace

• Creating a dedicated supplier portal

Paris - PSA Peugeot Citroën is implementing an assertive B2B strategy to consolidate relations with suppliers and enhance the efficiency of its collaborative product design, procurement and supply chain processes. The strategy comprises two core programs: participation in the Covisint marketplace and the creation of a dedicated portal for suppliers.

PSA Peugeot Citroën joined Covisint, a global e-business exchange for the automotive industry, on May 21. The Group is acquiring a stake in the exchange created in February 2000, and will be taking part in the development of Covisint Europe. It will also have a seat on the Advisory Board.

Through Covisint, the Group will have access to the resources needed to implement its extended enterprise strategy in three areas:

• E-procurement (tenders, auctions, catalogs).
• Supply chain management (logistics, production management, knowledge of Group needs and collaboration with Tier 1, 2 and higher
• suppliers).
• Collaborative design with suppliers, in particular through access to digital models of planned cars and components.

Working with Covisint, PSA Peugeot Citroën is also setting up a portal to serve as the single point of entry for its supplier relations. The portal, which is already up, has a public area with general information about the Group and the Purchasing Department. For business users, it also has a secure, login protected area that comprises:

• A section open to all suppliers, with quality and procurement information.
• A one-to-one space, where individual suppliers and the Group can communicate on matters such as quality performance, invoice tracking and procurement marketing.
• A collaborative design area.

The collaborative design area, where digital models can be accessed, operates as a virtual design platform. PSA Peugeot Citroën's extensive experience in this process is constantly leveraged by employees based at different development sites. To meet its announced targets for new model introductions, PSA Peugeot Citroën is committed to shortening the design cycle. Digital models make this possible by enabling suppliers to take part directly in vehicle development. The Group is aiming to connect 150 suppliers to the digital model by 2002.

PSA Peugeot Citroën's B2B strategy, built around two closely related programs, is expected to significantly improve processes impacted by supplier relationships, both for the Group and for its suppliers. By capitalizing on digital models, it will also encourage faster deployment at each phase in the model life cycle, from lead-in and design through series production. In addition, it will generate savings across the automotive industry, which can be passed on to customers.

PSA Peugeot Citroën's purchasing spend currently exceeds ¤25.6 billion a year. The Group has a total of 450 suppliers, of which around 20 account for 50% of total procurement. The Purchasing Department has 1,000 employees.

(May 22, 2001)

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