SAN ANTONIO (Oct. 27, 4:05 p.m. EDT) — Coming soon to an end user near you: the perfect market.
All goods are traded in real time. Everyone has access to the same information. Prices are transparent to the user. All transactions take place in a spot market.
The Internet will become the tool to make that all happen, maybe sooner than we think, said Richard Crawford, procurement section manager for packaging and resins with Hewlett-Packard Co.
And Hewlett-Packard, one of the world's largest companies with $36 billion in sales last fiscal year, wants to help drive that process along, said Crawford, who spoke Oct. 18 during an original equipment manufacturer supply-chain panel at the Plastics News Executive Forum in San Antonio. It is only a matter of time until the Internet technology blossoms, he said.
"E-procurement technology has not fully materialized and is not totally functional today," Crawford said. "But there's an immense investment in building applications. It will enable fast deployment in what we will do. We can position ourselves in the (supply) chain and in the steps along the way."
The session speakers, all major end users of plastic parts and materials, each spoke for companies that are embracing Web purchasing to a different degree.
While Hewlett-Packard was moving at a fast clip toward Web procurement, Wauwatosa, Wis.-based motorcycle producer Harley-Davidson Inc. was considering e-business solutions for its supply chain, said senior purchasing engineer Barry Sos.
And Bausch & Lomb Inc., a leading producer of vision care products, has established a launching point for its e-business ventures with several new Web sites, said Joseph Packard, project manager for the Rochester, N.Y.-based company.
Collaboration with suppliers is critical to ensure the right product is at the right place at the right time, Packard said.
"When our customer rubs his eye because it's dry, he picks one of our brands," Packard said. "And when the (next) tide is receding in the ocean, there will be less saline on the beach."
The company is building Web partnerships with suppliers through its recently launched site, EyeBuyBiz.com. Bausch & Lomb plans to exchange planning and forecasting information and make transactions for laboratory equipment, direct materials and other products over the site, Packard said.
The company also will buy non-production goods and services over an "e-mall" and dispose of used plant assets over its "[email protected]&l" e-mail site. And purchase orders and approvals will move through one common site, to be called PeopleSoft.
The company's one dilemma involves its complexity. Bausch & Lomb cannot buy commodity resins, due to stiff testing standards and government requirements, Packard said. Instead, each material must be individually purchased and undergo months of testing, he said. The same applies to its contact lens molds, which are made of injection molded plastics.
Because of that, public Web trading sites to buy raw materials cannot be readily used, he said.
"We make millions of molds that undergo a single use," Packard said.
Palo Alto, Calif-based Hewlett-Packard, on the other hand, plans to use a combination of both public and private Web marketplaces to fulfill its e-business vision, Crawford said.
The handwriting is on the wall, he said. As the Internet has improved, cycle times are now shorter and response times instantaneous, Crawford said. Information is ubiquitous.
The company is developing a plastics pilot Web site that it plans to introduce with its suppliers. The site will expand Hewlett-Packard's role in information flow, cash flow and material flow, Crawford said. The company will attempt to reduce turnaround time on purchases by forecasting future needs, he said.
And Hewlett-Packard plans to study Internet models to drive quicker transactions by using the Web, Crawford said.
"Payment (with suppliers) can be a little slow," said Crawford, based in Fort Collins, Colo. "We think we can find a better cash flow tool. It's a win-win for everyone in the supply chain."
The company also is investing in the new high-tech exchange purchasing consortium it is launching with 10 other electronics companies. Other partners include printer competitor Canon Inc. and computer makers Gateway Inc. and Compaq Computer Corp.
Several issues remain with the consortium, including the need for each company to maintain price confidentiality and still trade over a public marketplace.
Harley-Davidson wants to enhance purchasing with its suppliers by using the Internet, Sos said during the panel discussion. Existing suppliers are not currently required to use a Harley-Davidson Web site for purchases, he said.
The company is developing its online HDSN site, with the acronym standing for Harley-Davidson Supplier Network.
"Suppliers should be able to sign on and go into virtually all we have access to internally," Sos said. "It helps to streamline the (purchasing) process. The Internet is becoming an essential tool."