By ADAM GIFFORD
Two Christchurch brothers, John and Rodney McVicar, have teamed up with Cardinal Enterprise Systems to develop Lignus.com, a global electronic trading portal for the timber industry.
Trading is due to start in May, but the site is live now to explain the concept and register prospective buyers and sellers.
The McVicar family have been in the timber industry for four generations and the brothers have struck out from South Island sawmiller McVicar Timber Group to establish Lignus Corporation.
"The system needs to come from within the timber industry, not be imposed on it," John McVicar said.
Timber Industry Federation chief executive Wayne Coffey said the federation would encourage members to work with Lignus.
"We're here to promote more efficient business and this site will do that," Mr Coffey said.
"We will be able to communicate better with the market, and also get statistics which will give us an instant snapshot of what the market is doing.
"The market is often misled by rumours of low prices, but they could be for small amounts being dumped for specific reasons. The more information we get the better."
Mr Coffey said that while it was a new way of transacting business, it underpinned traditional practices and one-to-one relationships.
Lignus is being developed using Cardinal's Jade application environment, combined with technology from Rational, a leading object-oriented programming-tool provider.
Users will be able to post the timber or timber products they have for sale, using pull-down menus covering thousands of combinations of species and quality. If required they can limit exposure of their offerings to a select customer list, or open them out to the worldwide market.
After sending out a request for a product or finding what is available on the product database, the parties can negotiate within the system until they agree on product specification, price, terms, conditions and the currency to be used.
On reaching agreement, the identity of the seller is revealed. A purchase order is sent to the supplier, confirmation sent to the buyer and a detailed history of the negotiations and confirmed orders is kept on the parties' files for future reference.
In future the financial transactions may be able to be done through Lignus, but for now they will be done by traditional systems of letters of credit, bank drafts or electronic data interchange (EDI).
Mr McVicar said all members of the Lignus system would be vigorously checked so users knew they were dealing with reputable timber companies.
Buyers pay nothing. Sellers pay Lignus 1 per cent of the nominal value of the purchase, compared with the industry standard of between 2 and 4 per cent.
Mr McVicar said Lignus was a neutral marketplace, without a vested interest in any of the products available.
"Unlike other marketplaces, Lignus enables members to preserve existing trading relationships and preferred supplier statuses," he said.
It streamlines previously time-consuming and repetitive tasks carried out by sales and purchasing staff. Lignus will also set up a call centre to support the web-based business.
Cardinal Enterprise Systems partner Bert Haggren said Lignus would initially be hosted at Cardinal's Christchurch systems management centre, but it was likely Cardinal would need to set up a centre in the United States to host it.
The system is being deployed using Jade's Smart Client Technology. There is an HTML client for public access through the Lignus web site, a Jade Smart Thin Client for registered members to access the system over the internet, and a standard Jade client for management of the system by Lignus.
Mr Haggren said that in addition to the normal e-commerce requirements of scalability, security and transaction-processing reliability, the system had to cope with different timber gradings for the same product across different markets and provide multilingual support.
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