by Aaron Kahlow , Business Online, Inc.

"Over $100 Billion dollars of business was transacted last year and those numbers are expected to increase by over 1000% in the next 2 years."

To deliver, manufacturers will need to increase responsiveness, speed and viability of the production line. In addition, many OEMs are outsourcing their "non-core" manufacturing needs. Consequently, there is an even greater demand for timely collaboration.

Older isolated legacy systems have created a huge gap in the supply chain preventing the smooth flow of product order management.

Through new e-business systems:

1. Inventories will be reduced and product cycles minimized
2. Increased customization will be provided
3. Flexibility to make product changes (individual and market based)

Learning the lesson of the failed dot-coms and "irrational exuberance" of larger companies spinning off internet based divisions, plan ahead and build a road map based on return on investment. Start by making small investments in your e-business strategy insuring a return for each phase of the project.

Image

The first generation of websites is usually performing more harm than good. Because most new clients and vendors' first impressions of your company will occur through viewing the website, having a poorly designed site will provide an undesirable corporate image and lead to missed opportunities that will never be realized. Consequently, spending a little money to "clean" up your site's look and feel is the first step toward a strong return on investment for companies large and small alike.

Client and Vendor Tools

Having a secure login and informational page (called an Extranet) for your larger clients and distributors is one of the easiest ways to begin the process. Poll your customers for immediate feedback on what they'd like to access on the secure site. This is a tremendously efficient way to disseminate new product information, promotions and educational tools to help your clients stay abreast of the rapid changes taking place. For example, most OEMs require new distributors to complete a credit application before they are approved to purchase and distribute their product line. Typically, the form is requested and sent or faxed taking a few days for receipt. From there, the order is handwritten by the applicant and confirmed internally then sent back to the OEM. Another week has passed. Now the OEM has the credit application on a pile of others and is processed in a few days when accounting has the chance to run the D&B on the company. The total process averages a 4-6 week turn around leading to a frustrated vendor and possible missed revenue opportunities. This is one example of how the manufacturer can improve on the image of "not being easy to do business with" and start their distribution relationship off on the right foot by automating and capturing information online. Taking the cycle time from a few weeks to a few hours.

Access Information

Typically the next phase of an e-business solution is to allow access to order history and product line information on demand. Being able to view previous skews of detailed custom project simplifies the next order. The goal is to pass on revenue opportunities and product information as effectively as possible.

Take for instance, Disguise, Inc., the largest U.S. manufacturer of costumes. Disguise had what seemed to be a very simple e-business requirement: allow their 1200 distributors access to all product information online and automate sales request from consumers visiting the Disguise Master site disbursing the lead to the closest local distributor.

After an exhaustive search and one failed trial, Disguise placed a minimal upfront investment in the Ripcord platform offered by BusinessOnline, Inc. Through this solution, Disguise now allowed secure logins into their site to access proprietary product information and photographs for vendors to use for marketing purposes. In addition, Disguise had BusinessOnline standardize all of their vendor sites to enable to ability for a customer to seamlessly order custom costumes online. Now Disguise had a completely automated solution to distribute information and consummate sales with out having to deplete it's IT budget.

Backend Integration

Lastly, you must allow the client to have access to the order process. Where is the order? How long to delivery? Can I change the specifications mid-stream? All are everyday questions that your clients will demand immediate answers for. With the onset of the Internet, expectations have evolved to the expectation of timely information 24 X 7. Customers are expecting more customized product, faster delivery schedules and instant access to status of orders.

This is always the most costly endeavor, but by the time one is at this phase of the e-business initiative the upfront investment will seem minimal in comparison to the velocity and margins returned.

Summary

The manufacturing industry is going through a dramatic paradigm shift even during times of economic instability. The past 3 years has been an education for all companies from the fortune 500 to small corner shop on what NOT to do when investing in technology. The biggest mistake was over investment with out any concept ROI. So, as we approach the second generation of the information age, where can you see an ROI in your e-business strategy? 1) Improve your corporate image by "cleaning up" the website's look and feel; 2) Extranet functionality for dissemination of product information/sales tools; 3) inventory management integration.