[From iSource Business, November 2001] Industry analysts warn that you should embrace technologies and manufacturing techniques like Internet auctions and supply chain event management, lest your company lose its competitive edge or even its very life. To the uninitiated, the risks of such endeavors seem huge and the challenges look frightening, but the reality is not so ominous.
In my 15 years in information technology at Belden Brick Co., a 115-year-old brick manufacturer based in Canton, Ohio, I have learned a simple truth - one that is especially important to remember in this post-dot-com-implosion environment: joining the revolution is a fool's game. The real path to business success is evolution. And not only is evolution the right path, it is also the necessary path, since standing on the sidelines is every bit as risky as jumping onto the latest-passing technology bandwagon.
In such an age-old business as brick -- making, high-tech is probably the last description to come to mind. But in order to keep up as the industry and the business world continues to rapidly change, e-commerce and collaboration are two areas in which Belden has proven that the evolutionary approach to new technologies is the best approach. And we have been able to address these issues at a comfortable pace and in a cost-effective manner through several initiatives.
One such initiative was the development of our in-house extranet. Due to the nature of Belden's raw materials, an extranet for suppliers is not needed. So, by organizing a small development team to lead the project, we were able to create an effective collaborative communication system that supports our dealers and addresses their needs.
The new extranet now allows dealers to log in and view the details of their account, locate current product specials, view product photos, look up employees, order literature, download or upload CAD drawings, and join in discussion groups.
One particularly useful feature is the BEL, the Belden Electronic ListServer. Brick is a long lead-time product, and we've found that if customers don't order enough brick to complete a job and the style they are using is not on our current production schedule, they have to find the needed brick from another source. Prior to the extranet, this meant customers had to call us, as well as the other dealers they knew. Now our dealers use the BEL, which allows them to send out a request to every one of our dealers to find someone who has the needed style. Dealers that were used to the old phone tree process view this as nothing short of revolutionary. But it isn't; it's just a good use of a simple, inexpensive and readily available technology.
We have also instituted an e-mail service that alerts a dealer with a bill of lading attachment when a shipment leaves our dock. This simple technology means that the dealer no longer has to call and ask about delivery status and, in turn, Belden saves money.
While none of these activities or technologies could be called earth-shattering, the extranet has proven to be an invaluable tool and the foundation for numerous e-commerce and collaboration functions with Belden's dealers.
The misconception that there was a need for a collaboration revolution was not the only myth that fell - while working on Belden's collaboration projects I re-evaluated some other long-standing beliefs to which I had previously clung.
The first belief is that collaboration needs to be expensive. Belden's project cost very little to implement, and it continues to save the company money, especially since our administrative and sales staff no longer have to spend time tracking down invoice copies or shipping dates because our dealers have 24-hour access to that information themselves. In addition, our customers are saving time because they aren't being placed on hold or left waiting for a return phone call or the mailed invoice copy.
With the extranet, dealers are also able to check inventory availability. Prior to the extranet, our dealers would phone the sales department to inquire about product status. The problem with that process is that if a customer is standing in the showroom and the dealer can't get the information the customer wants immediately, the potential to lose that business is very high. Online ordering, however, completes the seamless and cost-effective process.
Return on investment (ROI) was the next sacred cow that fell. When evaluating IT projects, companies have the tendency to use ROI for justification. It can be a useful tool, but it is only a tool, and should never replace good business sense. The move to Internet-based industry exchanges is a good example. A year ago, exchanges were all the rage. Industry pundits wanted to know why traditional brick-and-clicks weren't participating. It was simply because the concept didn't make good business sense and there was no clear advantage. After all, when a company joins an exchange, its products are positioned next to all its competitors' products, and the only possible advantage becomes price. This is not a good situation for a company that uses quality, product range and superior customer service as differentiators. But, as with all new ideas, the exchange concept will evolve and it is wise to keep an eye on new developments.
Finally, there were my convictions about purchased software. I used to believe in off-the-shelf applications for all uses, but my experience developing Belden's collaborative communication system has given me a change of heart. We are using application programming based on our database everywhere to create custom applications. The extranet was built using our existing database and active server pages. As much as I believe in build-your-own add-on applications, I wouldn't suggest this approach for backbone applications, such as our enterprise resource planning (ERP) solution. We use MK Manufacturing from interBiz (a division of Computer Associates) and have begun using their BizWorks product. MK Manufacturing gives us strong manufacturing and accounting applications with a database that can support our own development. BizWorks will provide the business rules needed to support our plans for event-driven notification, which is the next step in our collaborative communication plan.
The Bumpy, Profitable Road Ahead
Belden's implementation of e-commerce and collaboration may sound like it was all smooth sailing but, as with all projects, there were setbacks, like skeptical management, customers that weren't ready to embrace a change, and ideas that just didn't work out. All of these issues were overcome, however, by using the evolutionary approach. Smaller-scale, evolutionary projects quickly come online, with benefits realized and skeptics converted in short order. And then when ideas don't work, you aren't stuck saving face and justifying wasted money and time. Instead, you can just back up and move on to the next project. By using readily available, proven tools, your projects are much more attainable.
At Belden, we are continuing to look for ways to evolve. Today, we are able to accept online orders through our extranet. But why should our customers key orders into their systems and then into ours? So we will be looking at using eXtensible Markup Language (XML) to eliminate the redundancy. Again, XML isn't a revolutionary development, it's just another stop along our evolutionary path to e-commerce collaboration.
I firmly believe that, despite the New Economy slogans, the fundamentals haven't changed at all. It's still necessary to identify the demand in your industry, to find ways to create the supply, and then to deliver. Begin your company's implementation with a solid ERP foundation, mix it with the Internet, use liberal doses of specialized software and then apply all these things to your supply chain in a creative and evolutionary fashion. Don't wait for the revolution. Start your own evolution today.