Cumbria Supply Chain Network Group

David Neil BGN Ltd Greensyke House, Lamplugh, Workington CA14 4SA Tel/Fax 01946 861418

Cumbria Industrial Catalogue.

9th Meeting on 13th December 1999 at 3:00 pm - Furness Internet, Barrow

1.        Present:    D. Neil (Chairman) R. Gilbert, D. Heron, R. Smith, E. O’Keefe, J. Knox

                         (In attendance Neil Harrison, Deltawaite)

 

2.        Apologies: Nicholas Steven, Peter Caunce, Helen Brown, Brian Lightowler

 

3.        Minutes of Meetings 7& 8: The minutes were accepted as an accurate record.

 

4.        Matters Arising: Edward pointed out that shareholder receipts had not yet been issued. Acknowledgement should be done as quickly as possible. Action: D Neil/Peter Caunce

 

5.        Demonstration of Phase 1: ISPL presented an overview of the working system. ISPL had loaded some of the data provided by Deltawaite and Gilberts and basic searching for products was demonstrated. However the demonstration was somewhat limited by relatively small number of items loaded. It became clear that some standardisation on the template/format for data loading was required. Action: Richard Gilbert to lead a team including Neil Harrison and Roger Smith to a) familiarise themselves with data loading -tuition to be provided by ISPL on 22 December pm, b) create the standard template for engineering products and c) load their own data using the agreed standard.                                               ISPL have not had the opportunity to consult the Buyers on the current version and it was agreed that discussions would take place with Marconi Marine and BNFL in early January. It was also agreed that ISPL had further work to do to complete phase 1.                                                                         (Richard suggested that video conferencing would be a useful mean of communicating. David Heron pointed out that a high standard of conferencing technology would be required for multiple users. There is a possibility that the Genesis Business Club may be a source of such technology.)

 

6.        Programme and Costing for Phase 2.  Phase 2 in principle would allow buyers and suppliers to trade using the full CIC functionality ie CIC would receive orders and pass them to the supplier, these would be confirmed and acknowledged. Payment methods include purchasing cards, credit cards and BACS transfer. It was agreed that for purchasing and credit card purchases these transactions would not go through the full CIC process and CIC would take a commission of 2.5% which would be invoiced to the supplier. (CIC would have no liability for supplier default). For BACS transfer there would need also to be accounting software (or a manual system?) for CIC accounting. Action ISPL to contact Sage for information (and possible partnering).

Vendor Rating methodology was discussed and it was agreed that for Phase 2 the on line delivery performance figures would be calculated by comparing the suppliers promised delivery date with the suppliers despatch date (not the buyers received date). Buyers would enter quality related problems.      

The issue of redundancy and reliability for Phase 2 was discussed. It was generally accepted that Phase 2 should be at least as reliable as paper-based systems. In comparison with industry standards for e-commerce where reliability/redundancy was better than 99.9% this could only be assured if there were independent servers, independent lines and line balancing. This option was not realistic for Phase 2 but would be a requirement when the CIC is launched nationally and the cost would be substantial.

Having reviewed all the issues Edward felt that the budget provision of £25k in quarter one 2000 and £25k in quarter two was reasonable. To achieve Phase two by the end of April therefore the cost would be between £25-£50k.

 

7.        Business Plan Vision, Financial Structure: The Vision and Financial Structure drafts in the current version of the Business Plan were endorsed with the exception that CIC should be launched on the AIM market within 2 years i.e. by end of 2001.                                                                                               David Heron pointed out that there was now competition to CIC in the form of PurchasingCenter.com, which offers business to business services and is feature rich. In order to compete CIC ought to be taking a radical approach and raising sufficient funds to have a comparable product. He suggested funding via Oracle of the order of $3m. Should we go down this route Oracle would arrange KPMG to give 35 hours free consulting providing we use KPMG as accountants an use the for the public placing of shares. Oracle & KPMG would then approach 3i for a minimum of $3m.

Edward O’Keefe pointed out that he was contacting “retail investors” via the internet and this could be a potential source of additional funding.

 

8.        Legal Advice: D. Neil reported on a letter from Burnetts offering to provide commercial contracts and advice on director liability and IPR for £2,500. It was agreed that members would seek to draft the contracts etc and invite Burnetts to quote for commenting/editing the draft documents. Action: All members to provide draft buyer & supplier contacts which could be adapted to suit and any information on director liability & IPR.

 

9.       Genesis Discussions: D. Neil reported that Commerce Media Ltd has declined to co-operate with CIC. However there is a possibility that CIC could co-operate with the Genesis Business Club to assist the implementation of CIC to the SME suppliers. Joint membership could be discussed. It was agreed that we should attempt to secure an understanding with the Genesis Business Club. Action: D. Neil to contact Genesis project team.

 

10.     Raising of Additional Funding: At this point in the meeting the Chairman invited ISPL to retire to avoid any conflict of interest. D. Neil reported on discussions with DTI and Business Link on grant aid and on information received from the Business Angel Network regarding equity investors. It was accepted that to role out the project nationally, substantial funding would be required to develop the high level of reliability/redundancy required. It was agreed that we should explore all avenues for additional funding. However David Heron suggested that we should cease any further expenditure with ISPL and focus on the Oracle/KPMG route. The Chairman’s view was that we should develop a working system in conjunction with the buyers and continue seeking additional funding from all sources including Oracle, the Retail Investors and Business Angels. No decision was made regarding awarding a contract to ISPL for Phase 2.

 

11.     AOB:  Richard Gilbert reported that he had discussed the question of liability insurance with his insurance broker and will report back on any information the broker is able to provide.

 

12.    Next Meeting: Monday 24 January 2000 3:00pm at Pneuco Ltd, Clay Flatts, Workington.

 

 

David Neil 14th  December 1999