In spite of an industrywide sales slump, resin distributor GE Polymerland met its 2001 goal of having half of its customer orders placed via the Internet.
The conversion is accelerating in 2002, with the Huntersville, N.C.-based unit of GE Plastics taking in 56 percent of orders through online services as of mid-May, GE Plastics Americas executive Gerry Podesta said during a May 16 interview in Huntersville.
The unit is on track to hit a 60 percent Internet-based sales rate by the end of the year, added Podesta. In addition to overseeing GE Polymerland, Podesta's duties as vice president and general manager of GE Plastics Americas include running the GE Polymershapes shape distribution business, GE ColorXpress custom coloring and GE Plastics Structured Products sheet-making business.
``The drop in sales [last year] didn't affect electronic acceptance, because the Internet has worked,'' he said. ``It only fails when the order doesn't get there and a customer has to pick up the phone and call us.''
GE Polymerland's umbrella expanded dramatically in mid-2000 when parent GE Plastics placed the unit in charge of all of its resin sales. Previously, GE Polymerland had handled sales of GE's engineering resins to about 80 percent of its customers, but handled only about 20 percent of its resin volume.
That number mushroomed overnight when the switch was made. GE Polymerland now coordinates some large-volume sales directly from GE resin production sites, such as its major polycarbonate works in Mount Vernon, Ind., and its ABS facilities in Parkersburg, W.Va.
``Polymerland is always in the middle of every external order, even if it's not physically in the middle,'' Podesta said.
Before it integrated all of GE Plastics' sales, 70 percent of GE Polymerland's customers were within a one-day delivery time of a GE Polymerland site. Post-integration - with GE Polymerland using more GE Plastics sites - 94 percent of GE Polymerland's customers enjoy that advantage.
>From the Internet side - where GE Polymerland services now are available in 10 languages - the firm is working to improve direct contact between customers and its actual logistics databases, a move that Podesta said calls for ``system-to-system cohesion.''
Recent Internet-based moves include the installation of more ``order wizards'' that allow customers to avoid re-entry time by reviewing their buying history with GE Polymerland and storing data on grades of resin they have purchased.
GE Polymerland operates a network of warehouses worldwide, including 31 sites in North America. Since expanding its scope two years ago, the firm has added distribution hubs in Mount Vernon, Burkville, Ala., and Brampton, Ontario, joining hubs in Chino, Calif., and Maumee, Ohio. The firm has no plans to add to its North American warehouse lineup in the remainder of 2002.
In addition to GE Plastics material, GE Polymerland distributes resins for 24 other firms. After the mid-2000 move, GE Plastics' share of GE Polymerland's business jumped from 70 percent to 85 percent, but the increase did not change GE Polymerland's strategy toward non-GE suppliers.
``Doing more of GE Plastics' business isn't going to make us less aggressive with other resin producers,'' Podesta said. ``We're never backing off on increasing market share. If anything, we spend more time now in convincing suppliers to give us more of their business.''
Future moves could add more compounded products or higher-end resins such as thermoplastic elastomers to GE Polymerland's product mix, he added. GE Polymerland also plans to continue to source specific material from specific producers when possible - such as obtaining acetal only from Ticona - rather than offering the same product from several different suppliers.
Contrary to some industry reports, Podesta said he has not seen a major change in the amount of business that resin makers are turning over to distributors.
``The percentage is increasing, but I don't see a dramatic trend,'' he said. ``The decrease in sales volume last year made [resin makers] step back and think about channels to market. It seems like everyone's paused right now as they're evaluating the situation.''
``Distribution has a lot of benefits, but a [resin maker] can't just say, `Here, sell our product' if they don't assist with sales leads and technical support and pricing position. We can't grow their business that way. When we get new business it's because we're offering a service model that a resin maker can't offer, not because the resin maker wants to eliminate five sales people.''
Ever-tightening inventory levels among original equipment manufacturers and plastics processors also provide an opportunity, rather than an obstacle.
``That's where Polymerland shines,'' Podesta said. ``Because we've been able to accurately forecast customer demand as order cycles have constantly been reducing.''
The fragmented North American resin distribution market - with GE Polymerland, General Polymers and PolyOne Corp. holding positions as the largest, national players - might not change much in the near future, according to Podesta.
``It's the same case in resin distribution as in sheet distribution,'' he said. ``Both are very margin-sensitive businesses where you need a good model and an understanding of your customers. [Resin distribution] is a tough game where getting bigger may not be an advantage.''