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Converters Wading into Web
September 12, 2006 By: Tom Andel Uptime eNewsletterWhether converters are dealing with customers, suppliers or both, web-based purchasing can make them more efficient.
Gilbert Becker, vice president, general manager, Carton Sales Division of TimBar, Miami, says there are opportunities for independent converters to generate volume business via the web. As a niche supplier to small businesses in southern Florida and the Caribbean area, he says managing customers' web purchasing transactions beats island hopping between St. Croix, St. Thomas and Grenada.
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"We want to do promotional stuff first, like how to get in touch with us," Becker says. "Some of our competitors have already done this, but we want to go for a specific market and area, not U.S. based."
Eventually Becker wants to get to a point in Carton Sales' information infrastructure where customers can check the availability of 1,000 12 by 12 by 12 blanks, for example. Carton Sales would confirm availability and take and confirm the order via email.
Lee Shillito, president of Triad Packaging, an independent corrugated plant in Bristol, Tenn., says his customers understand that the Internet has tremendous potential to drive costs out of doing business with suppliers.
"My customers want to be able to check on orders and move things up," he says. "You need to make it easy for customers to do business with you over the Internet."
He also says the web offers converters a way to make better use of their sales force.
"I don't want our sales guys out on the road, because that's expensive and they don't have the opportunity to create value," Shillito adds. "We need to beef up our ability to do transactional sales, and we need to understand what's driving our customers' business."
While most converters have systems where their existing customers can go online to place an order or check order status, more and more are also collaborating online with customers on structural and graphic design. Although customers can check copy and proofs online, when it comes to press time, most customers want to be on site to make sure colors and other specifications are correct.
Making the transition
Smaller converters that have yet to take their first step toward web-based business transactions may prefer using a bridge. Ron Giuntini, executive director of the OEM Product-Services Institute (OPI), says a lot can be accomplished with a laptop, a fax, a modem, and $20 a month.
"If you're a small company and want to stay on top of your business, you don't want hard copy to accumulate," he says. "Twenty dollars grants electronic access between you and your clients and suppliers. I use a device and software that turn my cell phone into a modem and I can access my emails whenever I want. Customers want to move to electronic payment and purchase orders. I get most purchase orders as PDFs, and I have electronic deposit. Some of my customers pay me electronically now exclusively and send PDF documents. PDF is the poor man's electronic commerce."
Connecting To Suppliers
Gordon Hay, chairman and ceo of CTI, a San Diego-based software company, says his company's new service, CorrChain, provides a private, collaborative supply chain automation environment connecting people, suppliers, carriers, customers, and collaborative manufacturing partners.
"There's a transition in our industry away from the small proprietary legacy systems to go to enterprise resource planning [ERP]," he notes. "The mills can receive a PO from the corrugated plant, go through an RFP process, develop a PO from that, put it through the mill system and verify whether the mill can offer that date and quantity. Stepping down from the mills and corrugators, the sheet feeders can work on short turnaround. People order today, it gets manufactured overnight and gets shipped in the morning."
Just as converters are starting to use the web to do business with customers and raw material suppliers, they're also entering purchasing agreements with equipment vendors online. Corrugated Replacements, a replacement parts vendor in Blairsville, Ga., has an arrangement with Smurfit-Stone Container Corp. as an approved supplier.
"We send them a sample and they put it through rigorous tests to verify tolerances and come back and say you've been approved with the Smurfit service program," says Luke Travis, principal with Corrugated Replacements. "So we're online with Smurfit through their own system and our whole catalog is downloaded."
Now, when anyone at a Smurfit-Stone plant needs a part, they can key the part number into their online purchasing system. They also can search by primary vendor and secondary vendor. If they choose a secondary vendor, that choice must be justified. It might be that the part is needed immediately and it's not in stock at the primary vendor. The ability for clerks to handle this kind of transaction saves their managers time.
"A clerk can order parts throughout the day," Travis says. "They don't have to shop, they already have a primary vendor, and that price should be consistent with their agreement. They don't have to negotiate."
Vendors of converting equipment are using online services to make better use of their service resources. These services help their converter customers take more of a self-help approach to purchasing and maintenance.
Bobst Group USA, Roseland, N.J., launched InTouch, an online direct customer connection allowing customers with Internet access to check product availability, receive instant price quotes, order parts, and track parts orders 24 hours a day, seven days a week. "We are not reducing the number of customer service reps serving our customers," notes Alex Gigon, director of customer service. "They will still be available to help customers if they need or want assistance. InTouch will expand their availability, allowing more time for them to work with customers who require more in-depth assistance."
Whether you wade into web-based purchasing by yourself or jump in with the help of a service provider, the benefits can be big. But so can the risks. Continue your research. The web will help you there, too.
