On-Line Purchasing Saves Time, Money, and Space

Published: June 01, 2000, By Edward Boyle, Contributing Editor

Business-to-business e-commerce, the sale of products and services directly over the Internet, is rapidly becoming big business-even for small companies. Just ask All Printing Resources (APR). Better yet, talk to its customers.

APR, which offers a wide range of supplies for the flexographic converter--"just about everything but film and inks," says one customer-began selling through its web site (teamflexo.com) less than two years ago. Now, on-line sales through its FlexoSource system account for 20% of APR's overall volume, and, within a year, the company hopes to see 50% of its orders arrive on-line.

Testimonials Roll In
"It's a great innovation that gives me a lot of freedom during the day," notes Joseph Irabor, prepress manager for Arrow Industries, a Fort Worth, TX, converter of plastic food bags. "I don't have to waste time on the phone to order my supplies. I come in early, get on my computer, and I'm done before most suppliers are even open for business."

Lynne Regan is the buyer for Packaging Personified, a Carol Stream, IL, converter of plastic bags. She explains, "This plant has 14 bag machines, five extruders, and four printing presses, so I buy a lot of stuff. If I'm out of my office for half an hour, there'll be 36 voice messages for me when I get back. By the time I'm done responding to them, there'll be 12 more. Being able to order supplies on-line without talking to another person makes my life a whole lot easier."

Companies like Arrow Industries and Packaging Personified are just a few of the growing number of businesses purchasing supplies on-line. Three years ago, business-to-business transactions totaled "just" $7.5 billion annually. But Piper Jaffray, the nation's eleventh largest brokerage firm, estimates that by next year Internet-based business-to-business transactions will total $201.6 billion. And Forrester Research, an independent research firm that analyzes "the future of technology change and its impact on businesses, consumers, and society," estimates that B2B transactions will total $327 billion by 2002.

There's good reason for that growth, according to APR customers. "It makes it simple," says Pat Marquart, plant buyer/environmental coordinator for Printpack, Atlanta, GA, one of the nation's largest suppliers of flexible packaging. "There are no more phone calls. You don't have to leave voice mail messages back and forth. For us, it's great."

Marquart says the system has reduced delivery times of its products from days to hours. That has allowed Printpack to reduce dramatically both the "money," in the form of inventory, left sitting on warehouse shelves, and the related storage space. Since Printpack began utilizing the FlexoSource system, "Our inventory reduction has been unbelievable," notes Marquart.

Printpack has slashed its raw materials storage area from 370,000 to 90,000 sq ft. The company orders approximately 110 different products from APR, which accounts for more than 50% of its stockroom and comprises a majority of that reduction in storage space, says Marquart.

He adds that even items that take little room to store, such as stickyback tape for plate mounting, can increase inventory costs significantly. For example, that tape may cost a much as $300/roll. Says Marquart, "If I can have them keep 12 rolls while we only keep 2, that drastically reduces costs."

He reports that the system has been so beneficial to his division that Printpack is looking for ways to use more APR products and likely will expand the on-line ordering program to some or all of the company's 17 other divisions.

Adding Up the Benefits
Among its benefits, customers say the FlexoSource on-line ordering system offers them the ability to:

• Check product availability and pricing.

  *Place orders for these products through the Internet 24 hours a day, 7 days a week.

• Browse APR's complete product catalog.
• Visit "shopping centers" that contain products specific to the wide web, narrow web, or corrugated industries.
• Create their own product "catalog" by selecting a list of favorites. (Each product is assigned a code unique to the individual customer, further streamlining the order process.)
• Converters registered to use FlexoSource can gain access to APR inventory levels, user-specific pricing, purchase history, and the status of open orders. The order history allows repeat purchases to be made quickly, and the open-order status lets anyone with access confirm that a product has been ordered and is on its way.
• Customers can order with their company's own part numbers and make special requests or comments that accompany any purchase.

"We enter our part number, and it automatically tells me what our price is and how many they have on hand," says Marquart. "I type in how many we want and the time or date that I want it. Later, I get an e-mail telling me the order has been received and when it will be shipped."

All three companies report they have increased the number of products they get from APR since they began on-line ordering. Marquart says a quick scan of the company's on-line product list revealed some items that Printpack was buying from 15 other vendors that it could order from APR at equal or reduced costs. Notes Marquart, "We've saved big time."

Delivery times also have been reduced, since APR has distribution centers strategically located across the country. In the case of Packaging Personified, it's less than three miles away, and orders can be delivered within hours. Irabor says orders placed at 7 a.m. typically are delivered no later than noon. "If I want it faster," he says, "I can write a short note on my order and they will respond."

The FlexoSource system also can be proactive in managing a converter's own inventory. Not only can a company access its "order history," which details how often a particular product typically is ordered and the last time an item was shipped, but the system automatically will notify the customer that a product might need to be reordered based on the converter's history of use.

"There is still a lot of human contact, but it really reduces the possibility of human error," says Regan. "If there's an error in the order, it's because I entered it wrong, so I have total control over what I receive."

Regan says ordering on-line also has helped reduce the amount of paper that reaches her, and the e-mail order can be deleted when supplies are received. "It makes my life easier, and it cleans up after me. It's like having a maid"... "Made to order," that is.

Supplier information
All Printing Resources. Glendale Hts., IL; 630/784-3115; teamflexo.com