Adding an e. to your business

DECOMING e-savvy is hardly a Ilfad. More industries, from booksellers to financial institutions to millwork jobbers, are merging toward online business models in order to survive. To remain competitive within their own industry, lumber and building material distributors must try to learn from the early pioneers.

No doubt, understanding the Internet economy is vital. There's real money to be made from a business model that integrates an electronic storefront with an existine real- world operation. But does your company have the desire to adapt, or even the know-how to compete in an ebusiness environment?

"A lot of wholesalers and distributors are asking themselves if they can successfully develop an e-business strategy," says Byron Hansen, director of electronic commerce at software maker Distribution Management Systems, Inc. "I don't know if they can. But I do know that there are companies already doing it and they're winning. People in the lum- ber industry should be asking not f but how they're going to adapt to this new online marketplace."

At the crux of getting the lumber industry online are two stumbling blocks. First, are lumber's physical characteristics. It's large and it's bulky. There's no getting around that. The methods required to handle it can be crude and freight fees can outweigh some ease-of-order Internet services.

Second. the automation process offered by e-commerce provides the strongeit support for products with "standard" pricing. Lumber wholesalers, however, historically treat lumber as a commodity, negotiating "special" prices more often than not.

While these "buy-side" reasons for delaying an Internet presence have some merit, many businesses fail to recognize that e-commerce represents only one segment of the e-business world. It's the totality of an e-business strategy that drives success.

In the new global marketplace, ebusiness may be the only way you can differentiate yourself from the competition. Included in e-business are:

. Buy-side features (pricing, order entry, order fulfillment, e-commerce/ EDI, etc.)

. Information (relationship) management

Messaging (e-mail, intranets, extranets, etc.)

. Inventory/warehouse management

Catalog management

E-commerce simply means buying and selling on the Internet. It can be between two businesses, a business and a customer. or even between two consumers. Many associate it with online catalogs. The trouble with lumber, some mistakenly believe, is making products such as 2x4s-and other of its many forms-into an online catalog image that encourages sales.

If you consider e-business to be an entire storefront of Web-based business, where buy-side features are only a component, then you'll begin to see the bigger picture. Electronic catalogs offer not just visual identity, but immediacy. They're a venue for product descriptions, specifications and technical information that's not always at the fingertips of your sales force.

You may build your new business processes around an e-commerce package, but once established, consider developing a higher level of customization. More than buoying the bottom line with sales across new markets, e-business is about streamlining and integrating all of your company's service offerings to improve customer satisfaction. The experiences customers have with your busi- that fulfillment on time and without needless overhead costs. E-mail messaging can even remind customers to place orders to ensure a smooth delivery flow.

Your e-business strategy should include many ways to individualize service in much the same way that you do face-to-face.

Electronic Data Interchange and

For example, when a customer logs onto your Web site, a welldefined e-business application will be able to pull historical data on that customer to help you recognize habits and predict sales in advance. If a lumber contractor buys a certain type of paneling from you six times per year, then you can have orders with the appropriate quantity and pricing shipped to your warehouse to meet its data-sharing through extranets is the precursor to the buy-side features of e-commerce, and it can still play an important role in a global network strategy. day.

EDI helps bind the supplier-distributor relationship by improving communication with streamlined. automated ordering and confirmation. It's an important tool for inventory management. helping you trim overhead, avoid out-of-stocks and improve order turn-around time. Barcoding processes can be tied into your e-business strategy to help update your warehouse data quickly. And, new buy-side order entry and catalog products, such as DMSi's EntryNET, are also helping to integrate that inventory management and pricing with online order entry.

"What e-business is all about is providing a higher level of service," Hansen says. "That's what society wants. So, to succeed, you try to find new ways to change the ratio of revenue to cost with tools that can help. That's what the Internet offers."

Before the lumber industry dives into the e-business, two important things must happen, he adds. First, those in the lumber industry must be willing to break the old habits of doing business. And second, those in the industry must be willing to accept the emerging technology.

E-business is confusing, but it affords up-to-the-minute access to service information, order processing, industry trends. new practices. new technology and new products. Your e-business strategy must address how you'll match a more efficient ordering process with your delivery and valueadded service. Companies in all industries are finding ways to adopt their business models to include ebusiness and the most flexible lumber enterprises will be among the leaders who establish themselves as the first source to go to on the Internet.

A LTHOUGH some of their Web lLsites look like nothing more than online billboards, building material dealers overall are beginning to incorporate flashier and more money-making features, according to a random survey of 100 industry Web sites by The Merchant Magazine.

Most encouraging was retailers' growing participation in e-commerce. Of the sites surveyed, 26Vo offer full online sales. Most are lead-ins to other companies' sites (Do it Best, TruServ, overnight shipper Hardware Express.com), with the linking retailer getting a percentage of the sales.

Another 57o offer mock online sales. By e-mail, customers can submit orders or quote requests, which are then processed by conventional methods.

An additional 37o promise that their e-commerce facility is under construction.

Other sites are used to push instore sales. Brevard Lumber Co., Titusville. Fl.. runs a limited time Internet special, offering lower prices on felt paper rolls to customers who say they saw it on the Internet.

In addition to offering online sales through Do it Best, Adams Lumber, Englewood, Co., among others, encourages customers to print out coupons from their Web site and bring them into the store.

A few, including McGuckin Hardware, Boulder, Co., use their site to promote gift certificates.

Information on career opportunities with the company is found on 287o of the sites. Many provide online employment applications, while others, such as Causeway Lumber Co., Fort Lauderdale, Fl., even provide online customer credit