Like Hollywood agents and Washington politicos, it is often whom you know that spells the course taken by many dot-com companies.
Those connections provide the bedrock behind a landmark direct-material procurement agreement announced July 18 between automotive Web consortium Covisint LLC and e-Steel Corp., an amalgam of investors and large steel companies.
E-Steel will offer links to material suppliers for auto-parts makers that use Covisint's portal. It is one of the first times that a materials-based dot-com has joined forces with a compatriot serving a major end market.
And if you think steel will be the only outside offering on the still-evolving Covisint site, think again. New York-based e-Steel wants to move into plastics, too, said spokeswoman Sherry Sigler.
The site, which helps with everything from inquiries to financial settlement, plans to expand to work with plastics and chemical companies, she said. “It's a tool for any type of material purchasing,” Sigler said.
Many of the large, plastics industry dot-coms (among them Omnexus, ChemConnect Inc. and GE Polymerland) would envy a similar arrangement with a major OEM consortium. But Covisint spokesman Dan Jankowski said nothing is in the works. He added that he was not familiar with Omnexus, which is backed by major resin suppliers and compounders.
E-Steel essentially trumped the competition by getting in the door at Ford. The Dearborn, Mich., automaker has used the site for more than a year to source steel.
Covisint now will ask suppliers and carmakers to glide through the single portal at e-Steel to buy materials. The Covisint arrangement, if successful, could widen the scope of e-Steel's relationships.
“We don't have to do everything ourselves,” said Jankowski, who is based in Southfield, Mich. “It's going to make sense to have alliances with the right kinds of people.”
The need for alliances also has driven major resin distributor H. Muehlstein & Co. Inc. of Norwalk, Conn., to join the ever-expanding Omnexus group of suppliers. The Omnexus portal provides a no-fuss way for Muehlstein customers to reach the company and tap many others, said Muehlstein Vice President Mark Lux.
“How many sites are customers willing to learn how to navigate?” Lux asked rhetorically. “It makes sense for some customers to work through one portal.”
Yet, connections — the human kind — also played a part in its decision. The distributor could not resist sinking its anchor in the water with a company that has so many large suppliers on board, Lux said.
Omnexus does not offer that same functionality, not yet anyway. “Customers have to decide what they are going to use,” Lux said.
That is the nature of e-business in the year 2001. No one yet knows what will succeed. But of increasing importance is the company a dot-com player keeps as it builds a virtual Rolodex of customers.
Joseph Pryweller is an Akron-based senior reporter for Plastics News. His beat includes electronic business and tooling.
