DÜSSELDORF, GERMANY (Dec. 10, 2:05 p.m. EST) — It takes time to build an e-business. But it also takes connections.
That connectedness concerned Clemens Kaiser, president of e-commerce for resin supplier Bayer AG in Leverkusen, Germany. Kaiser, who became president of the company's e-business activities in June 2000, said the Web work by individual companies is only a small step.
All the investments made by Bayer and its resin and distribution counterparts, all the investments in plastics injection molders' portal Omnexus, all those in other exchanges and software and vertical hubs, could amount to nothing without a single point of connectivity, Kaiser said.
A recent study by Bayer of online trading confirmed that, he said.
“We've got to be more customer-centric,” Kaiser said during a Nov. 1 interview at K 2001 in Dusseldorf. “To move quickly in the direction of e-business, we need to have a large network built between companies. We don't need more companies, and we don't need each company going it's own way.”
Meanwhile, companies still are grappling with how best to present e-business tools, as evident in several interviews at the K show. The technology might be in place. But if processors must struggle to locate each Web site and Internet purchasing tool, e-business could falter, Kaiser said.
The e-business universe still is new, and no two companies offer similar ways to connect. And some of them disagree that a universal marketplace is the right answer.
One of those is Ciba Specialty Chemicals Holding Inc., a major producer of plastic additives and chemicals. At the show, Ciba announced that it would join SpecialChem.Com, a Paris-based dot-com that provides assistance to processors in solving technical additive problems.
While Ciba wanted to join an information hub, the company has no desire to sell its products over a joint Web site, said Felix Meyer, global head of Zurich-based Ciba's plastics additives segment. Ultimately, those sites will have to charge fees to make up their investments, he said.
“The transaction business doesn't offer advantages to processors,” Meyer said. “Individuals can't afford them in the long term. You can get technical requirements for free but transactions are different.”
Others would disagree. Omnexus, for one, charges no fees to processors to use its e-marketplace, while it allows companies access to more than 20 global suppliers of resin and equipment.
The company is attempting to make that work easier, said David Jukes, senior vice president of global commercial organization at Omnexus' U.S. headquarters in Atlanta. The company has developed Omnexus Ultra-Lite, a software system that helps processors immediately upload purchase orders to the Omnexus site for products from a variety of suppliers.
The software, piloted both in the United States and Europe, will start rolling out in December, Jukes said. Once a processor adopts more sophisticated computer systems in-house, Ultra-Lite can help those companies immediately call up a supplier's site once the system is logged on, said Jukes.
“It's the first step toward complete integration,” Jukes said. “It's very simple to use. It can help processors get over the hurdle of doing business online.”
Others are taking other paths to integration. GE Plastics, which made a major early push to trade online, expects to conduct 55-60 percent of its orders on the Web this year, said sell team e-business leader Michel Tanis. But the effort at gaining the other 40 percent — those less willing to try online tools — will not be as easy, Tanis said.
“Right now, our focus is on larger accounts,” Tanis said. “If they can easily execute orders, we'll be most successful at growing the business.”
The Pittsfield, Mass.-based company has linked its site directly to that of six large, unspecified customers, allowing them to quickly connect their systems to GE Plastics' with one mouse click, Tanis said. That work could cascade down those customers' supply chains, he said.
In Europe, a new dot-com, Plasticsgrid AB of Stockholm, Sweden, also is taking the integration approach. The firm plans to link processors and suppliers directly through a Web-hosted system.
The company was co-founded by former GE Plastics Europe Chief Executive Officer Uwe Wascher and GÃ¶ran Bennich, former chief executive officer of GE Polymerland Europe. “Imagine an electrical power grid,” Wascher said. “Plastics companies can be connected to a similar type of grid over the Internet.”
The company, founded in April 2000, launched last December.
Plasticsgrid and others must muddle through the debris left by failed Web sites that did not cost-effectively connect customers, said Rachael Bartels, consultant with Accenture plc in London.
“Lots of people forgot customers,” Bartels said. “Less than 1 percent of all chemicals and plastics in the year 2000 were transacted by the Web. But that hides a huge amount of change going on.”
Resin companies are telling customers to remain patient. Their needs will be met, said Bill Ray, global director of e-business for Midland, Mich.-based Dow Plastics.
“We have a call to action,” said Ray, based in Horgan, Switzerland. “And it's for customers to be included in the process. We are learning over time what they like and don't like.”