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FEATURE-Size doesn't matter for suppliers on the Net
By Timna Tanners
LOS ANGELES, Feb 15 (Reuters) - Joe Pruett labored for months to rejig his order information and compile stacks of data to prepare his family-owned, yarn-making equipment company to hit cyberspace.
He's betting the move will pay off and that sales of Pruett Supply's lubricants, sprockets and other machine parts and supplies will triple, even quadruple, once new customers catch wind of the little company's existence over the Web.
Lafayette, Ga.-based Pruett Supply, with a staff of 18, was nudged online by one of its largest customers, who wanted it to use Ariba Inc.'s business exchange software so it could order parts over the Internet.
"It's a gamble, but we felt that the risk at this time would be worth it to go out and test the waters," Pruett said in an interview.
"The plus side is more customers. It's opened up doors so we can sell to Fortune 100 companies we would otherwise never be able to touch," he added. "But spending the time, energy and money on getting the data ready and marked in the format that Ariba wants, has been a big cost."
As market forces begin to push suppliers online, smaller firms and more "Old Economy" industries are juggling the costs of e-business with its potential advantages.
"You can measure the benefits in terms of better customer service and being able to attract more and better customers than you would have otherwise," Mark Verbeck, an analyst with Epoch Partners, said.
Pruett says his company's Web site, launched in October, has already gained it access to more customers, and over the weekend received a catalog quest from least one new potential large customer -- the Commonwealth of Virginia.
The process can be a headache for small firms, and larger business-to-business platforms are not likely to hold a smaller firm's hand through the difficult process. Companies like SoftQuad Software Ltd., which helped Pruett, are filling in the gap. RUSH TO WEBIFY
Business-to-business (B2B) marketplaces were all the rage a year ago, as even the most traditional "old economy" industries -- like autos and energy -- joined forces for exchanges online.
Those marketplaces have since lost their luster, along with the shares in the software companies that power them. Commerce One Inc. and Ariba, two top B2B software firms, have seen their shares fall more than 80 percent from peak levels nearly a year ago.
Yet experts say such online procurement will eventually become a necessity, in part because bigger companies are pushing their suppliers to sell products online to reduce ordering costs and errors.
"Being online will be the price of entry. It will be come necessity of doing business, just like a fax machine," Verbeck said.
In addition to providing suppliers greater exposure, and online presence should improve the information companies can compile on customers, allowing companies to better cater to their needs and improve service.
Consumers are becoming more demanding as progress in some industries has spilled over and boosted consumer expectations in others, said Chunka Mui, co-author of "Unleashing the Killer App" and chief innovation officer for technology strategy consulting firm DiamondCluster International Inc..
A top customer of one of his clients, a large manufacturer of forest equipment, complained about its order delivery, he said in an interview.
"I ship a box by Fedex (Federal Express) -- it costs $8 and I know where it is at every moment of the process. I buy $4,000 in equipment from you and you can't even say when it's going to arrive," he said, describing the customer's complaint. COMPETITION HEATS UP
As small companies find a presence on the Web, they face more demanding customers and a tough competitive environment.
Because of the transparency over an open exchange for products, buyers can easily compare product attributes, such as costs, specifications and quality.
"It's a big world out there and (small companies) need to be able to compete, provide high quality and high levels of customer service," Verbeck said. "When talking to purchasers, price is not usually the most important criteria in selecting vendors."
The biggest laggards in using ordering and fulfillment have been heavy construction and paper products, according to Chuck Poirier, supply chain author and Computer Sciences Corp. partner.
He argues in the book he co-authored, "E-Supply Chain," that companies can make their operations more efficient by moving more of their order and operating information online. Benefits include better inventory management, delivery times and improved customer service.
Pruett said he felt his 38-year-old company needed to make a drastic change. "In business, you're either growing or you're stagnant. This is the best tool I've come across to be able to reach a growing area of sales."
Danke im voraus,
mfG: Speculator
--------------------------------------------------
FEATURE-Size doesn't matter for suppliers on the Net
By Timna Tanners
LOS ANGELES, Feb 15 (Reuters) - Joe Pruett labored for months to rejig his order information and compile stacks of data to prepare his family-owned, yarn-making equipment company to hit cyberspace.
He's betting the move will pay off and that sales of Pruett Supply's lubricants, sprockets and other machine parts and supplies will triple, even quadruple, once new customers catch wind of the little company's existence over the Web.
Lafayette, Ga.-based Pruett Supply, with a staff of 18, was nudged online by one of its largest customers, who wanted it to use Ariba Inc.'s
"It's a gamble, but we felt that the risk at this time would be worth it to go out and test the waters," Pruett said in an interview.
"The plus side is more customers. It's opened up doors so we can sell to Fortune 100 companies we would otherwise never be able to touch," he added. "But spending the time, energy and money on getting the data ready and marked in the format that Ariba wants, has been a big cost."
As market forces begin to push suppliers online, smaller firms and more "Old Economy" industries are juggling the costs of e-business with its potential advantages.
"You can measure the benefits in terms of better customer service and being able to attract more and better customers than you would have otherwise," Mark Verbeck, an analyst with Epoch Partners, said.
Pruett says his company's Web site, launched in October, has already gained it access to more customers, and over the weekend received a catalog quest from least one new potential large customer -- the Commonwealth of Virginia.
The process can be a headache for small firms, and larger business-to-business platforms are not likely to hold a smaller firm's hand through the difficult process. Companies like SoftQuad Software Ltd.
Business-to-business (B2B) marketplaces were all the rage a year ago, as even the most traditional "old economy" industries -- like autos and energy -- joined forces for exchanges online.
Those marketplaces have since lost their luster, along with the shares in the software companies that power them. Commerce One Inc.
Yet experts say such online procurement will eventually become a necessity, in part because bigger companies are pushing their suppliers to sell products online to reduce ordering costs and errors.
"Being online will be the price of entry. It will be come necessity of doing business, just like a fax machine," Verbeck said.
In addition to providing suppliers greater exposure, and online presence should improve the information companies can compile on customers, allowing companies to better cater to their needs and improve service.
Consumers are becoming more demanding as progress in some industries has spilled over and boosted consumer expectations in others, said Chunka Mui, co-author of "Unleashing the Killer App" and chief innovation officer for technology strategy consulting firm DiamondCluster International Inc.
A top customer of one of his clients, a large manufacturer of forest equipment, complained about its order delivery, he said in an interview.
"I ship a box by Fedex (Federal Express) -- it costs $8 and I know where it is at every moment of the process. I buy $4,000 in equipment from you and you can't even say when it's going to arrive," he said, describing the customer's complaint. COMPETITION HEATS UP
As small companies find a presence on the Web, they face more demanding customers and a tough competitive environment.
Because of the transparency over an open exchange for products, buyers can easily compare product attributes, such as costs, specifications and quality.
"It's a big world out there and (small companies) need to be able to compete, provide high quality and high levels of customer service," Verbeck said. "When talking to purchasers, price is not usually the most important criteria in selecting vendors."
The biggest laggards in using ordering and fulfillment have been heavy construction and paper products, according to Chuck Poirier, supply chain author and Computer Sciences Corp. partner.
He argues in the book he co-authored, "E-Supply Chain," that companies can make their operations more efficient by moving more of their order and operating information online. Benefits include better inventory management, delivery times and improved customer service.
Pruett said he felt his 38-year-old company needed to make a drastic change. "In business, you're either growing or you're stagnant. This is the best tool I've come across to be able to reach a growing area of sales."
