by

Time to measure your electronic commerce initiatives!

But rather than speaking in bits and bytes, networks and bandwidth, or exchanges and marketplaces, lets imagine a straight-line scale populated by cartoon characters. On the left-hand side is a Stone Age family, representing no progress at all toward implementing any kind of e-commerce processes. On the right-hand side sits a Space Age family, representing digital nirvana.

Where does your company fit on this scale? Do you have plans to move toward the Space Age? What have you done so far to implement any e-commerce processes? How is your company holding up? How are your suppliers doing?

The importance of suppliers
Did we say suppliers? Many organizations implementing e-commerce solutions are intentionally or unintentionally leaving their suppliers in the dust. Its important to see where your major and critical suppliers fit on the Stone Age/Space Age continuum, and determine their attitudes and plans regarding e-commerce. It can get lonely and dangerous in space without the support of your critical suppliers.

E-commerce is having a dramatic impact on the marketplace, affecting everything from communication to transactions to service levels. Most companies have some plans to take advantage of e-commerces benefits. However, these organizations must seriously look at their existing supply bases to determine how many suppliers have the ability to make the journey with them.

Some suppliers are already making the trip, and a few actually lead the pack. Some lag behind. Some will never leave the launch pad. Its never too early to check their progress and make plans and decisions necessary to ensure you have the most agile and responsive suppliers possible as you move across the e-commerce universe.

Lets define e-commerce, or e-purchasing, for that matter. This process can run the gamut, from a large, expensive software package that integrates with ERP systems to simply increasing communication with suppliers through e-mail. Define e-commerce as doing business in a digital environment.

All companies are at different levels of sophistication. Where you are right now doesnt matter much, but understand that Internet and Web-based applications soon may be the only alternative.

Some suppliers currently force customers to use the Net to get product or other information. Printed catalogs may become relics. So, in a way, some of your suppliers are already forcing you to utilize e-commerce tools.

The normal supply base is made of large, regional or national suppliers and small, "mom and pop" suppliers. Both are valuable, and have their place in the supply base.

Large suppliers may have vast product offerings, extensive technical support and e-commerce-based systems that dovetail perfectly with your operating systems. You may have a solid relationship with these suppliers.

Small suppliers, on the other hand, may be less sophisticated but offer outstanding service, the products you need, aggressive pricing and great support. Often, they are local.

The large supplier can immediately become e-commerce-enabled, or maybe is already there, but the small supplier may not even have e-mail. What does a buyer do now?

The smaller supplier may be more important to your organization than the larger supplier. Many small suppliers can be sole-source or critical suppliers supplying a special part or performing a unique service. No matter what your companys e-commerce plans are, its important to keep these suppliers ready and happy.

We all have our secret suppliers, those dependable, honest and thoughtful suppliers whom youd trust to hold your wallet and watch your kids. Once we find those suppliers and develop strong relationships, were hesitant to give them up. But what if e-commerce knocks so loudly that you have to "electrify the relationship"? Both of you may be in trouble.

Include your suppliers
What does your technology road map look like?

Its important for organizations to develop a technology road map that includes the technology plans of critical suppliers. After analysis of the strategic business goals and objectives, an e-commerce road map may include the following:

Align the business goals of your organization with your e-commerce initiatives. Include your suppliers and customers for a true look at the supply chain.

Communicate your e-commerce visions and objectives throughout the supply chain. Ask for feedback and assistance.

Assemble a cross-functional e-commerce team. Include suppliers and customers.

Ascertain supplier readiness. What e-commerce capabilities do your suppliers have?

Determine processes best suited for e-commerce. Start slowly and build the process.

Develop a technology plan and budget that meets the organizational and business needs.

Train employees and suppliers.

Use and reinforce the technology and new business processes throughout the organization and supply chain.

Continually monitor the process and progress.

An action plan
How can you make sure your suppliers go with you on the e-commerce journey? There are several key steps buying organizations can take to ensure their plans integrate with those of their suppliers.

First, ask your suppliers about their e-commerce plans. Identify your key, or critical, suppliers. This may be a big or small list, but each organization has a group of key suppliers it can ill afford to lose. After making that list, begin to review the suppliers e-commerce capabilities. As silly as it sounds, many suppliers today still dont have e-mail. Its time for them to get it, and use it!

How many of your critical suppliers have a Web site? What can you do on that site? Is it just advertising, or are there avenues for product support, technical information, catalogs or direct ordering?

If you want to utilize the supplier sites, let them know that.

Suppliers are a bit nervous. They launch Web sites because they feel compelled to do so, but often times they still give customers the opportunity to get information in more traditional methods.

As customers gain familiarity with the Internet, and increase their usage and understanding of technology, suppliers may start restricting information to the Web.

Its critical to provide feedback to suppliers about what you want from their Web site.

Often times, sites are built by those with little direct customer interaction, yet, the sites target is the customer. So, be a good customer and tell them what you want.

Some sites even allow for order status and tracking. Remember how difficult it was to get delivery information from trucking and package companies before those tasks became Internet-based? Wouldnt it be great to track all your materials that way? This is the power of e-commerce.

You can also quietly force your suppliers to increase their use of technology. Begin to transfer some communications to e-mail. It wasnt so long ago that the fax machine was considered the technological tool of the future. Many suppliers didnt even have them. Now, theyre as common as telephones. Computers are the same way. Computer costs have plummeted, so that excuse is invalid.

Technology, while not perfect, is becoming more intuitive. Force your suppliers to communicate through e-mail by making e-mail the primary means of communication for certain documents. Im not advocating the elimination of face-to-face meetings or the phone, but increasing e-mail usage may make the communications loop more efficient, as well as send a strong message to the supplier community.

E-mail doesnt include just messages, but also files, prints, specifications and other traditionally mailed materials. Automation dramatically decreases cycle time.

A supplier conference may also help. Let your critical suppliers know your company wants to do more e-commerce-related activities. Provide your road map, and even some training. Allow the suppliers to be familiar with your initiatives, and establish a joint road map.

Theres also the aspect of competition. No matter how much we like our special suppliers, a time may come where a re-sourcing activity needs to occur. While this may be the last resort, suppliers must understand theres a limit to your patience and support.

In some cases, suppliers wont evolve, and in that case, hard decisions must take place. You may have to find new suppliers.

Dont wait. Act now!
E-commerce doesnt just affect the buying organization. It has a direct impact on the selling community as well. Careful planning, a sympathetic ear, a technology map and some strong convincing will help your supplier community keep pace with your plans.

While some suppliers are ready to go, and even some waiting for you to catch up, many suppliers lag behind. They cant afford to do so for much longer. Neither can you.

Richard G. Weissman is the founder and managing director of Weissman Training and Development, a supply management consulting firm based in Massachusetts. For more information, call , or e-mail .

This article appeared in the April/May 2001 issue of MRO Today magazine. Copyright, 2001.

Back to top

Back to Procurement archives