That's not an easy decision, as most rivals are haunted by fears of losing trade secrets, eroding pricing margins and potential antitrust concerns. Still, many companies are concluding that the efficiencies gained outweigh the risks. Announcements have come hot and heavy in recent months, even if most of the groups are still in the planning stages. Most have not yet named a chief executive, settled on a final structure or even chosen a name. As companies mull over their roles, they must decide whether, and to what extent, exchanges make sense and truly add value.
Exchanges come in a variety of flavors, differentiated by ownership and transactional models.
As defined by ownership, exchanges may be structured as co-investments among equals, possibly to be taken public at some point. Alternatively, an independent investor may set up and maintain an exchange as a separate entity from the participants. Other models compel buyers and sellers to follow strict site rules, and provide a fee for each transaction. Whichever the model, the rationale of a good site is to attract critical mass and plenty of eyeballs. Matt Porta, a partner in charge of e-market strategy at PricewaterhouseCoopers, cites the importance of uniting major supply chain anchors and smaller participants.