Carrier President Jon Ayers Kicks-Off B2B Program at the Industry Standard's Prestigious Internet Summit.

Business Editors

LAGUNA NIGEL, Calif.--(BUSINESS WIRE)--July 19, 2000

Ayers Reveals How Carrier Saved $100 Million Using B2B E-Commerce 

Jon Ayers, president, Carrier Corporation kicked-off the B2B program at the Internet Summit here today. In a one-on-one interview with Internet Summit host Mary Meeker, managing director, Morgan Stanley Dean Witter, Ayers discussed how Carrier integrated both its value and supply chains using the Internet to improve customer satisfaction, reduce costs, expand margins and increase shareholder value.

The Internet Summit is an exclusive three-day conference for the Internet economy's most influential business leaders and visionaries to meet and discuss the future of business. CEO and senior-level executives who run Internet companies, as well as those financing Internet companies or leading Internet plays for traditional companies, were invited to The Summit. Representatives from Amazon.com, America Online, and Microsoft -- to name a few -- have gathered to share their insights and strategies. Conference tracks include "Dot-Coms vs. the Big Brands," "The New Face of Venture Capital," and "The Future According to the Yahoos!"

As a representative of the earnings-based, traditional economy, Ayers shared with his colleagues how Carrier prioritized its e-commerce initiatives starting in 1995 to yield big results. "There is so much written about the value created in the new economy. When you are a big business, you get big benefits from B2B e-commerce. Since Carrier has the leverage, our value creation is big numbers," he said.

According to Ayers, companies should use Web technology to leverage existing customers, channels, brands and relationships. "The Internet can be used in every process within the company. In fact, the opportunities can quickly overwhelm you. You've got to prioritize. If you don't tie your Internet efforts to shareholder value, you can get easily distracted."

One of Carrier's e-commerce priorities was to integrate its multi-step value chain using the Web -- from the customer back through dealers, distributors, manufacturers, designers and suppliers -- eliminating boundaries and facilitating the real-time flow of information. Then, in 1999, Carrier began selling its window/room air conditioner products directly over the Internet at carrier.com.

Carrier is also Web-enabling all supplier relationships to reduce cycle time and increase asset velocity, freeing up cash and indirectly decreasing costs. For example, bidding supplier business online with FreeMarkets (Nasdaq:FMKT), a leading B2B e-marketplace, saves Carrier 15 percent on average versus last price paid. "FreeMarkets is not just online bidding, although that is the exciting part. When we procure using FreeMarkets, it allows Carrier to consider a much wider range of supplier options. The Internet allows you to do things previously inconceivable in business -- such as consider 60 suppliers rather than six, which translates to savings," Ayers added.

Through the year 2000, Carrier has saved more than $100 million in costs annually using B2B e-commerce, measuring only that which goes to the bottom line. "The sources of our cost reduction are reflective of our cost structure, with the biggest savings coming from the buy side. A lot of our Internet efforts allow us to do things that we simply couldn't have done earlier, such as real-time continuous communications with our channel partners and employees. But we are not counting this," Ayers said.

The Industry Standard is a weekly print publication and TheStandard.com is a daily online resource for Internet Business Strategists. Its award-winning insight defines the Internet economy. The Industry Standard also offers more than a dozen targeted conferences, events and seminars about the Internet economy.

FreeMarkets is the original and world's leading B2B eMarketPlace. FreeMarkets is saving millions for businesses purchasing everything from injection molded plastic parts to coal to tax preparation services. And achieving premiums for those same businesses when they need to sell surplus plant inventory and equipment.

Carrier is the world's largest manufacturer of heating, air conditioning and refrigeration systems and equipment. It is a subsidiary of United Technologies Corporation (NYSE:UTX), provider of a broad range of high-technology products and support services to the aerospace and building systems industries.