In the seemingly countless surveys attempting to find out how ready the UK economy is for e-business, the sectors tend to fare badly compared to whizz-kids such as the Eggs and Tesco.coms of financial services and retail.
The Quiet Revolution – a study by the CBI and KPMG Consulting, and one of the most comprehensive yet – is typical. When companies were divided into ‘e-pioneers’ and ‘e-laggards’, manufacturing had the fewest innovators and highest number of sloths.
Happily, there are now plenty of firms bucking that trend – and not just among the industrial giants with their multi-million pound IT budgets. Smaller manufacturers and their suppliers are now doing great things on the internet too. Some of these companies recently found themselves flying the flag for the sector in the E-Commerce Awards 2001, a government-backed scheme designed to recognise innovation by smaller firms and judge how comprehensively they have achieved their e-commerce design objectives, or ‘briefs’.
Each of the five companies profiled in this article were shortlisted in their own region and all prove – in these post-‘e-babble’ days – that there are real advantages to be gained from a judicial marrying of the best in the ‘old’ and ‘new’ economy traditions.
1. Paintain ToolsWest Midlands region
An engineers’ tools merchant based in Birmingham.The brief: to protect its position as an intermediary between engineering companies and tools manufacturers.
Visitors to the Paintain Tools web site are greeted with a mild in-joke: ’42 years without a website!’ reads the slogan. In fact, the way things are going, the company will soon have more websites than staff (at the moment, it employs just nine people).
Joint managing director Robert Paintain realised quickly that, for a distributor to engineering firms, the internet has as much potential to be a deadly enemy as a powerful ally.
Big manufacturers and importers like Draper have caught on to the fact that, via the web, they can sell directly to end-users, which could threaten the position of once-indispensable middlemen such as Paintain Tools.
Through creative use of web marketing, Paintain is attempting to secure and enhance his company’s position as an intermediary, albeit a virtual one.
In the world of e-commerce your good name matters, and can make the difference between success and failure. The company’s branded website, Paintain.co.uk, is fine for established customers and others who already know it exists.
But in a bid to grab the attention of the growing number of business users browsing the web to find the best deal, Paintain also registered tools241.com, a generic site conveying the distributor’s ‘buy one, get one free’ range of offers.
The key, says Paintain, is grabbing the attention of the internet search engines as they scour millions of websites in response to an enquiry which could be a single word – tools.
‘Tools241 has bought us in traffic and enquiries from all over the world,’ says Paintain. ‘It’s really been quite an eye-opener.’
The internet’s ability to send potential new customers his way led Paintain to experiment with other ideas. A powerful message for his customers was the company’s ability to deliver quickly – hence his registration of toolsnextday.co.uk.
Toolsnextday is another device to grab search engine browsers – and it works. Type in the four words ‘tools, next, day and UK’ into Google – one of the world’s biggest search engines with a range of more than 1.3 billion web pages – and, sure enough, toolsnextday.co.uk appears near the top of the search results. Clicking on it will guide you straight to the Paintain tools site.
Paintain says presence on the web is more than just crafty marketing, it could also help secure his company’s place in the supply chain.
‘Manufacturers and importers are developing ever more sophisticated e-commerce systems. But we can sit in front of, and link into, those systems if we are grabbing the traffic,’ explains Paintain.
‘Any traffic we capture on our sites becomes our own registered traffic – in effect, our customers – and can still earn us money.’
The brand identities born on the internet have proved so popular that Paintain has taken them out of cyberspace and into the real world, and they can now be found adorning the distributor’s premises and vans.
‘Many people now know us as tools241 and toolsnextday,’ he says. And more ventures are in the pipeline. Paintain is looking to create a range of ‘microsites’ offering tightly-focused ranges of high-value capital equipment to particular sectors. To this end, he has bought the name nextworkingday.co.uk from its former owner in Australia.
Paintain admits his company’s move into e-commerce has been a steep learning curve, but a vital one. ‘The business internet is still at a relatively early stage, and things are going to kick into a much higher gear before too long,’ says Paintain.
‘I think small and medium-sized companies like ourselves have the most to learn – and the most to gain.’
2. Deltron RoxburghYorkshire and Humber region
A distributor of electro-mechanical products, part of the Deltron group. The brief: to share information with customers and suppliers and remove unnecessary costs from transaction processes.
Alison Boler, IT director of Deltron Roxburgh, says the imperative behind the firm’s e-commerce initiative was to ‘allow customers to do their own thing in their own time’.
Until last year, the company had a static website containing corporate literature. Users now have access to a range of self-service support functions relating to price, stock levels, order tracking, deliveries and account information.
To take account of the company’s international sales, these facilities are available in multiple languages.Boler says: ‘Last month we handled more than 1,000 enquiries over the site. Previously, every one of those would have been a telephone call, probably lasting a minimum of five minutes.’
Because the site is fully integrated with Deltron Roxburgh’s back-end systems, the user is getting completely reliable data. And she points out: ‘They can be sure the figure they see on the screen is the real figure, accurate right up to the second.’
According to Boler, becoming an e-business is easier and less expensive than some would have you believe. ‘There’s a lot of smoke and mirrors from the software sector around all this,’ she says. ‘We were quoted six-figure sums to develop this system. In the event, we did it ourselves for a fraction of that.’
Boler claims: ‘People can be put off by the hard-sell of the software industry, which tries to wind them up with a lot of side issues, when companies’ actual commercial objectives are usually quite simple.’
Boler and her team developed the system in-house, basing it on IBM’s iSeries technology – the company has since been cited as an e-business case study by the IT giant. The next challenge was to sell the e-business concept to Deltron Roxburgh’s customers.
‘We quickly learned some important lessons on how to roll it out,’ says Boler. ‘The most important thing is to go to the right people within the customer’s organisation.’
According to Boler, the natural impulse is to promote the benefits of the web-based system to your established contact, but this can be a mistake.
‘There is no guarantee the person you are talking to won’t see a new way of doing things as a threat to their position, not an opportunity,’ says Boler. ‘You have to sell it into the customer at board level, and show them how it is going to help both sides. Once a director is on board, you just know it will actually start to happen.3. Rewinds & J Windsor & Sons North-West region
Liverpool-based engineering and industrial maintenance specialist. The brief: to widen its geographical reach and make itself easier for regular customers to do business with.
To develop its e-commerce activities beyond standard ‘brochure-ware’, R&JW was able to call on the expertise of the University of Liverpool and TCS – a government-backed scheme to help firms extend their use of business technologies.
John Hopkins was seconded to the firm to help R&JW fulfil its e-business ambitions on several fronts. ‘R&JW had taken over two other companies elsewhere in the north-west to give itself greater reach in the region,’ he says. ‘One of the reasons for expanding the web presence was to cement the enlarged business together.’
But R&JW realised the real gains would be made through transactional e-commerce. As a supplier of industrial maintenance products and services to large organisations such as ICI, Vauxhall and Alcan, the company realised it could use the internet to streamline many of its basic business processes.
Hopkins explains: ‘We looked at what our customers bought regularly and realised we could identify a range of popular maintenance items and make them available via an interactive site, industrialmaintenance.co.uk.
‘That way we could cut through a lot of the three-way fax-tennis which traditionally went on between us, the engineer who wants to buy from us and the procurement department at his end.’
To set up the online service Hopkins used an off-the-shelf package from Intershop, running on the server of an external web-hosting company. The cost was described by Hopkins as ‘minimal’ – largely thanks to the help of Liverpool University and the TCS scheme.
Getting the system up and running is one thing – getting customers to use it is, Hopkins admits, quite another. ‘Some of them have been a bit nervous.
They will look at the information online, but would still rather fax off an order or buy over the phone. You have to nursemaid them into using it to its full potential.’
But a growing number are doing so, and the feedback from them has been overwhelmingly positive.
Hopkins says a lot of the really interesting activity is hidden in the password-protected areas, where customers can view tailored data on their own maintenance programmes, including the ability to track their own, and R&JW’s, stores.
Managing director Lee Windsor says concerns about doing business online are misplaced – the real risk lies in doing nothing.
‘At the very least, we see it as giving people another way of trading with us,’ says Windsor. ‘Serving manufacturing is tough at a time when companies are closing.
‘Most of our business is in the north-west, but now there is nothing stopping us from casting our net wider.’
4. Cox & Plant ProductsWest Midlands
Manufacturer of specialist conveyor equipment used by food companies. The brief: to automate spare parts ordering, put product information online and attract new customers.
For Cox & Plant’s employees, trying to keep up with spare parts enquiries used to feel like running the wrong way along one of their own conveyors.
Annmarie Hanlon, the firm’s marketing manager, says transferring spares ordering to the internet has taken the pressure off their eardrums.
‘It has made life easier. The engineers placing the orders know exactly what part they need and its reference number,’ says Hanlon. ‘In most cases, processing orders by phone was a purely administrative exercise.’
Spares ordering is just one element of Cox & Plant’s site. The company faced a heavy demand for brochures from overseas, fuelled by its growing level of export business to Scandinavia and eastern Europe, but the brochures are expensive to print and mail out.
‘They are also out of date almost as soon as they are printed,’ says Hanlon. Placing the information online is also more cost-effective for Cox & Plant.
According to Hanlon, the biggest mistake a company can make is to rush into an e-commerce site without a clear idea of what it’s there for.
‘We didn’t want to have a website for the sake of it,’ she says. ‘We identified particular areas of the business where it could bring benefits.’
Hanlon also counsels e-commerce newcomers to take their time. ‘We created our site in stages, adding a new function once the previous one had had a chance to really bed down.’
The site has already proved its worth, not only through cost and efficiency benefits, but also as a marketing tool. Like other web-savvy engineering firms, Cox & Plant has taken steps to draw in search engine users. The company set up a single-page feeder site at the address multiheadweigher.com.
Not the most glamourous address on the internet perhaps, but one that has already won the company several orders.
5. Bourton GroupWest Midlands
A business consultancy specialising in manufacturing and engineering companies. The brief: to make a range of resources available via the internet to clients and other interested parties.
The Bourton Group has entered into the spirit of the information age with its ‘online knowledge library’.The Rugby-based consultancy has posted 600 pages of fact sheets, best-practice guidelines and other accumulated wisdom to create an ‘open learning’ area on its website. Best of all, it’s free to view and download.
James Bentley, a managing partner at Bourton, says placing the company’s ‘how-to’ guides on the internet helps its paying clients get easier access to the information.As a spin-off, Bourton is quite happy for smaller companies to delve into it and see if there is anything they can use. ‘We don’t mind who takes what,’ says Bentley.
‘There are a lot of small and medium-sized companies that would probably benefit from the same type of advice as larger firms. But in reality a small business employing 20 people isn’t going to want to pay for consultants,’ he points out.
Bentley admits Bourton’s motives are not entirely without self-interest. ‘We’ve won two new assignments, but we have also had some nice e-mails saying thanks for the little tool kit.’