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Volume: 22
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Article No.: 3137

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COMPUTER FORUM:Thinking Strategically Toward the Internet

Is it merely my perspective from inside the computer management arena or is the requirement of a business presence on the internet reaching crisis proportions? And, if it is becoming that crucial, why are dotcom's disappearing at such an alarming rate? I suspect the answer to this apparent paradox lies somewhere between the digital void and the brick-and-mortar world of commerce. If you are already on the internet, please let me know your experience. It could help others coming along the way.

So, what did go wrong? At the risk of making this discussion seem a bit esoteric, I'm going to propose a very brief look back over the last few years of internet commerce development – kind of the ghost of internet past. Maybe there's something that can be learned from this chronicle that will help you make better decisions than those that came before you. That way, when the reality hits that your plastics business is about to go live online, you'll sleep nights.

It wasn't that long ago that the dotcom's began the headlong rush. It was all over both the business and consumer news outlets. Do you remember the big splash about Amazon dotcom? Newspaper headlines told how fast the development of the digital frontier was taking place. Instantaneously building an internet storefront that would reach the masses became extremely urgent for the pioneer that wanted to make a fortune. It became digital doctrine that the first entrepreneurs into the new digital marketplace would be the only ones to survive. The admonition of "location, location, location" was abandoned for "now, now, now." As a result, some very ill-conceived web sites sprang into existence and a lot of them have consequently failed. A few were bought by successful site owners, while others adapted quickly enough to avert disaster and continue limping along without showing a profit yet.

In hindsight (we're not looking too far back), there are some very good reasons for the failure of most of these ex-dotcoms. The most frequent cause for failure seems to be that they were put together without much thought given to a brick-and-mortar back end. I'm not certain that the back end was even on the planning table when many of these sites went live. It seems expectations were to build the brick-and-mortar part of the enterprise in response to the demand created by the internet site traffic. It soon became difficult for them to keep up with anything but the smallest demand when working from their "garage" shop back end. I don't want to emphasize this aspect of the problem too much, though, because most of these situations involved retail types of business and you are, I believe, in a different place. However, there are two good lessons that come from this history. First, plan well ahead of the development process and, second, be sure you can deliver the product with your existing resources. If you lose customers because of broken promises, you are unlikely to get them back later.

Now, let's get to the thinking ahead strategically part. A relatively recent buzzword in the computer glossaries is "B2B" which followed "B2C" into the marketplace jargon, even though the supply chain says it should have been vice-versa. By the way, B2B means business-to-business and B2C is business-to-consumer. Cute acronyms, huh? The point is that, while most of the dotcom failures were B2C ventures, the type of internet venture you will be dealing with, B2B, can learn something from B2C failures and have a better chance at success. Dealing with a savvy business customer on the internet, instead of off-the-street consumers, is a whole different endeavor with advantages as well as disadvantages. Although you'll be reaching a smaller, more selective audience, the individual transactions will be much larger and one bad deal can be much more harmful to your bottom line. Also, your customer's expectations are going to be higher because you are perceived to be a plastics industry professional and to have your act together on your internet site, like you do in your brick and mortar business.

In the good old days before just-in-time inventory control, total quality management and delivery benchmarks, many plastics (as well as other types of) businesses controlled their prices and production schedules by the seat of their pants. The person who could keep all that running efficiently, without angering the customer or the working floor foreman, was critical to the operation of the company and commanded a lot of respect. With the modern business model, however, in even a mid-sized competitive company, no one person can keep up with the information flow necessary to manage these things and for the most part they have been relegated to automation systems. When a B2B internet site is put into operation, the design of those systems had better be complete and foolproof or the smart customer will find a way around them that may cause your operation to suffer.

Another aspect of the new digital business world that accompanies the increased need for speed is the fact that your customer has more control over your operations. When the internet customer needs a product from you, they had better have at least a good idea of the price of the product and of its delivery date. Since the customer is now able to shop around from the comfort of their desktop computer, they might even call for exact pricing on all but custom products and maybe even its exact delivery time to within a couple of hours. That puts your operation at risk if your internet system promises something on your behalf that you can't deliver.

I guess the big-picture lesson to be learned from all this is that your operation should be the initial driver for the design of your internet site, instead of vice-versa, and that the site needs to be very well planned before going live on the internet. If its ability to deliver what it promises is well planned and well tested, your internet site will keep your customers happy and extend your success in the industry into a new dimension. In addition to making your plastics industry business more successful, isn't that what a good internet site should do?

For more information, click on the Author Biography at the top of this page.

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