The Web finds its way
11/01/2001
Sheila Galatowitsch
Whether it's used as a lead generator, a purchasing medium, or both, the Web is now an integral part of the cleanroom supply chain—and is building in importance
Just one year ago, cleanroom suppliers and distributors were approaching the Web cautiously, using it primarily for information dissemination and sales of catalog-type consumables. But today, caution is giving way to full acceptance. Convinced that the Web is an important link in the cleanroom supply chain, vendors and distributors are working to expand their Web operations.
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For example, Swagelok (Solon, OH), a supplier of fluid system components, recently added an "eStore" to its three-year-old Web site. When it demonstrated the capability at the Semicon West trade show this summer, the company said that more than 500 users signed up for an online account. "Our customers believe that ordering online will help them reduce transaction costs," says Steve Kamins, manager of high purity markets.
At VWR International (West Chester, PA), e-business orders from the Web and electronic data interchange (EDI) channels are up 38 percent over last year, representing 20 percent of overall sales. Still, the global distributor has set aggressive goals to drive up the percentage of e-business orders and is working to enhance the online purchasing experience. "We want that experience to be equal to or better than the buying experience customers enjoy via traditional channels," says Arne Brandon, vice president and general manager of VWR's Production Supplies and Services (PSS) Division.
Even at Dycem (Warwick, RI), where managers haven't ever considered selling the company's highly customized contamination control mats and flooring online, the Web is getting more respect as a lead generator. "The Web site speeds up the selling cycle," says Tom Mulligan, president of American operations.
No matter how it is used, the Web has become an essential tool for selling cleanroom products and services. It helps suppliers reach a larger customer base more cost-effectively and streamlines the entire transactions process. Buyers, too, view the Web as important. A survey conducted by Forrester Research Inc. and the National Association of Purchasing Management showed that more than half of the organizations interviewed purchased production goods and services via the Internet.
The survey found a significant increase in Web purchasing activity from the first quarter of this year to the second. The results also showed that large-volume online buyers bought almost twice as much of their direct materials over the Internet as smaller buyers. And looking ahead to the next 12 months, 84 percent of the buyers interviewed see the Web as important.
Tool for distributors
That's the trend Swagelok says it's tapping into with its new eStore, created to help the manufacturer's 120-plus global distributors grow their customer base. "It's another opportunity for the distributor to add value to the end customers, who can use the Web to minimize their transaction costs, order during off-hours, and access information at any time," says Kamins.
The company has 10,000 part numbers—75 percent of everything it sells—available online at www.swagelok.com. "The challenge for us was to develop an e-commerce model that incorporated the distributor into the process," says Kamins. Orders originating on the Web site are processed through a server, which uses customer zip codes to route to local distributors. The distributor closes the sale, fills the order, and services the account.
The system also improves ordering accuracy, says Swagelok sales manager John McClafferty. "It reduces errors and speeds up processing time, and that saves money." Critical to the eStore's efficiency is an online product guide, which generates product recommendations based on pressure, temperature and flow specifications a customer plugs in. "Customers usually stick with a product that works and use it over and over for similar applications," says McClafferty. "What they don't realize is that if they spent a moment and went through the product selection scenario, they would find new options that might be more cost-effective."
A traditional hunt for more economical parts is time-consuming, but Swagelok says its product selection guide was developed to be quick and easy to use. "Just having a Web presence isn't enough anymore. You must demonstrate the value of your Web site," says McClafferty. "A good site is becoming the difference in whether some people will buy with you or not."
That's one of the many lessons VWR has learned in its five years of selling online, and today, the distributor says it's focused more than ever on e-business sales. "Our customers are asking for cost reductions, and if we don't act in that direction, we know our competitors will," says Brandon. "In an effort to operate a viable, long-term business, we must reduce our cost structures and enable VWR to present cost reductions to our key end users."
Moving orders to an e-business channel will lower VWR's overall order processing costs, which will ultimately allow VWR to operate at a lower selling margin and provide customers the cost savings they are seeking. Now the challenge is to move as many users as possible to an e-business solution.
Toward that end, VWR recently contracted with a provider of content management software to enhance current Web-based searching capabilities. Robust "parametric search" functionalities will allow users to identify, evaluate and select products faster and more accurately from VWR's sales portfolio of more than 400,000 online products, including cleanroom consumables, furniture, laboratory equipment and ESD items.
The company says its "parametric searching" capabilities will give users the ability to search for products by specific product attributes and functional characteristics, not just by product name or manufacturer catalog numbers. Eventually, scientists and cleanroom professionals will be able to select products for defined tasks, and the parametric search feature will return not only appropriate product choices, but also an additional list of other associated items and accessories generally needed to complete the identified activity.
"It's a big investment in time and money for VWR, but it will facilitate faster and more efficient product selection," says Jeff Rhoades, director of marketing for VWR's PSS division.
VWR, which is both SAP- and Ariba-certified for business-to-business integrations, is also working to enhance the EDI portion of the company's e-business. Currently, many end users are migrating away from static distributor catalogs to "punch-out" protocols, says Erin Gonzalez-Hicks, PSS marketing manager. Rather than rely on fixed and possibly out-dated information that lives within internal databases, many large customers have implemented front-end systems that "punch-out" from their own networks to the www.vwr.com Web site. Once there, they can retrieve live, real-time information, then place orders electronically from within their own purchasing systems, says Gonzalez-Hicks.
"It all goes back to content, functionality and making the Web experience equal to or better than the phone," says Brandon.
Lead generator
While Swagelok and VWR find the Web a good channel for selling catalog-type consumables, the medium still falls short when it comes to selling more complex items. Suppliers like Dycem that manufacture mostly custom products have used the Web solely for educational purposes.
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But in the past year, the company has learned something itself. In addition to educating customers about the Dycem technology, www.dycem.com has greatly accelerated the sales cycle. "Potential customers who are wary of a face-to-face sales pitch are so much more comfortable researching our product on the Web. No one is trying to sell them anything," says Mulligan. The number of new customers who started the sales cycle on the Web is so impressive that Dycem is starting to aggressively promote the site. "We are pushing harder to get the Web site out there. We want people to log on and visit our site before they contact us."
The vendor even plans to sell ancillary products on its site by December. Urged on by current and new users, Dycem will make available for online sale such items as cleanroom anti-fatigue mats, static-dissipative workbench pads, detergents, and disinfectants. "Our Web investment will significantly increase this year," says Mulligan. "By year-end, it will be four times more than we have spent in the last four years."
Dycem is not the only company using the Web as a lead generator. Also surprised in the past year by the number and quality of leads coming from its Web site is Cintas Corp. (Cincinnati, OH), a consumables distributor and cleanroom laundry services supplier.
Potential customers can learn about the company's products and services at www.cintascleanroom.com, but Cintas sells its products almost exclusively through custom Web sites. In two years of offering the custom sites, several thousand are online. "In our experience, people don't want to buy from a public site. They want something tailored in terms of price and product assortment," says Mike Gaburo, cleanroom division vice president.
"We have a template that makes it easy to plug in pictures, descriptions and pricing of a customer's product line. It also takes into account other variables, such as how they buy, who has purchasing authority, how the order gets communicated to Cintas and how it gets shipped to the customer," says Gaburo. The vendor is upgrading the template to accommodate even more user-required variables, such as incorporating limits on how much can be ordered at one time, and inserting routing and approval steps into the process. "It can be complicated depending on how companies want to exercise purchasing controls."
While many customers do all their purchasing over the Web, others still prefer the phone or personal visits. "As customers get more comfortable with online procurement and as Web tools become easier to use and more flexible, I think adoption rates will rise," says Gaburo.
Third-party partners
Some cleanroom suppliers want to offer online buying without the hassle of setting up and maintaining servers and worrying about security breaches. Just over a year ago, Liberty Industries (East Berlin, CT) began its foray into e-commerce with SciQuest.com, an e-procurement platform for the science and life science industries. This past summer, Liberty added ThomasRegister to its online sales vehicles. Buyers on the ThomasRegister.com site automatically pull up the Liberty home page at www.liberty-ind.com to learn about shoe cleaners, tacky mats, fan filters, and other stock items. Then the platform forwards inquiries and orders to Liberty via e-mail.
The response to its e-commerce initiatives has not been overwhelming, says Liberty president Bob Kaiser. "Selling CDs and books on the Web probably works better than selling tacky mats or air showers for example. Most of what we do is custom manufacture and for that we have to talk to the customer." But that doesn't mean Liberty would give up its Web site. "Anybody in the world can see what Liberty does on our Web site. We can change it overnight, whereas a hard-copy catalog is printed only once and has limited distribution," says Kaiser.
Prudential Overall Supply (Irvine, CA) still plans to add an e-commerce component to its Web site, but for now, the consumables distributor and reusable garment supplier is also satisfying demand for online purchasing through third parties.
"We had to measure the level of investment required by e-commerce, and what that meant for Prudential and our customers," says Jerry Martin, director of marketing for Prudential Cleanroom Services. "We chose to invest in a network of facilities from coast to coast rather than a seven-figure investment in an e-commerce site. To our customers, that is more important than e-commerce—at least it is today."
In the past year, the company has launched a cleanroom-specific site at www.pcs-clean.com, which features an online tour of a garment processing facility, and partnered with Ariba and other EDI providers. "Most of our customers are comfortable just calling our service center for procurement, and because we have a combined services program for consumables and garments, it's important for us to visit our customers and have our employees on-site," says Martin. "Still, we think the Web will be a very important channel for us in the future."
Meanwhile, some companies are shifting their online strategies. eFiltration.com (Chicago, IL), a start-up formed in 1999 to sell industrial and commercial filters over the Web, is paring back its operations and focusing on gas turbine intake products. Filtration Group Inc. (Joliet, IL), which recently purchased the company, will take over sales of eFiltration's cleanroom-specific filters, distributing them through traditional channels and at www.filtrationgroup.com.
Filtration Technology Inc. (Greensboro, NC) had hoped to have an e-commerce capability on its Web site by now, but the firm working on the project unexpectedly dropped out of business. The setback has given company president Scott Matthews time for reflection. "We're rethinking what we want to emphasize on our site. Online purchasing is not as critical as it used to be. What is more important is adding graphics and product information to the component items that get the most attention from site visitors."
Although it primarily targets the southeastern United States, Filtration Technology has received calls and e-mails from around the world. "I'm pleased with the quality of leads we are getting through the Web, but I've learned the important thing is to respond quickly. These prospects won't wait for you to follow up a day or two later."
More detailed product information does contribute to online success, says Tania Leisure, director of sales at Terra Universal Inc. (Anaheim, CA). "The most essential part of a Web site is having tutorial-type information available online, so users get more technical information—rather than just a product's dimensions."
In the past year, Terra Universal launched an online version of its 700-page catalog. Every product the company manufactures is available for sale at www.terrauniversal.com, which also includes product specifications and online manuals.
It requires a massive effort to keep the Web site updated, but it's worth it, says Leisure. Even though Web sales are still a small fraction of its business, Terra Universal believes e-procurement is poised for growth. And these other cleanroom suppliers agree. When virtual customers come calling, they want to be ready for business.