Embraer and ATR team on Web-based suppot network

 - May 21, 2008, 9:19 AM

A long-anticipated collaboration between Brazil’s Embraer and France’s ATR finally came to fruition in late June during the Paris Air Show, as the two regional aircraft builders teamed with Oracle and KPMG Consulting to create a new Internet-based customer-support network. Called AeroChain, the new e-business marketplace will consume an investment of $21 million, 10 percent of which ATR will contribute and 6 percent of which Oracle and KPMG have committed. Embraer will shoulder the remainder of the cost burden.

As part of the deal, Embraer will gain access to ATR’s Toulouse warehouse. As its customer base in Europe grows at a rate that rivals any of its other markets, Embraer needs more parts capacity on the continent. Rather than expanding its own warehouse at Paris Le Bourget Airport at considerable cost of resources and time, Embraer chose the seemingly more pragmatic alternative of using ATR’s extra 16,000 sq ft of space at Toulouse.

Sitting alongside new ATR chief executive Jean-Michel Leonard, Embraer CEO Mauricio Botelho called the collaboration with the French turboprop maker a product of the strategic alliance signed between Embraer and EADS some two years ago. Although he said no formal talks about a possible manufacturing linkup have occurred, Botelho referred to the e-commerce agreement as “the first” step toward further cooperation between the two companies.

Botelho said the new enterprise, which has already drawn more than $4.1 million in quotations and $1.9 million in sales between January and April as part of Embraer’s Legacy CIS (customer integration system), will become partially operational during this year’s third quarter and fully operational by the middle of next year. Leonard said ATR has worked toward an e-commerce system for the past year, and selected Embraer as its partner because it “shares the same vision regarding customer-provider relationships.”

Aside from its ability to provide part-ordering capability and technical services,
AeroChain will allow airlines inventory-management capability, explained Botelho. Other services include technical information and parts tracking services. It will also allow customers to track the status of maintenance schedules, not only within their own organizations but throughout the aviation community. Among its most important benefits to the manufacturers involves its potential for facilitating parts-use forecasting.

“Our goal is to trade the majority of Embraer spare parts and non-related aircraft goods through this new company, which incidentally will be fully independent,” said Embraer v-p for customer services Artur Coutinho. “When we started to analyze the options to establish our e-marketplace, we considered both a 100-percent owned company and a joint venture. The second concept showed to be the better option.”

As a minority stakeholder in the project, KPMG will provide integration services and manage the project, which includes a suite of Oracle software programs, including Oracle Exchange.