Grant Thornton surveyed 250 electronic manufacturing companies with 1999 annual sales between 250 million dollars and 500 million dollars. They found that the Internet was being used by 58% of them as a way to share information between customers and suppliers -- supply/value chain management.
Here are some other things the firm found.
Thirty-two percent of the respondents used the net today for component and raw materials procurement. That's expected to jump to 45% within two years.
The numbers are similar for order processing. Today 34% use the net for this. Forty-two percent expect to do so in two years.
A partner in the consulting firm offered the following, "we have already seen the first wave of e-commerce strategies among big companies like Dell and Compaq. We will start to see a monumental second wave among middle market companies.%
WALLY's COMMENT. . .I find it interesting to see Dell and Compaq mentioned in the same breath when it comes to strategy. Dell is one of the premier models of how to do it right. They currently handle about 30% of their orders through some form of their online system. Michael Dell expects that to move up to 70 or 80% within a couple of years. They've tied their inventory to their procurement, manufacturing, and administrative processes. Among other things, this has enabled them to keep their inventory at about an eight-day level for component materials.
Now let's look at Compaq. Just on the face of sheer performance numbers, they don't measure up to Dell. Their inventories stand at about twenty-six days. That's a long way from eight.
In fact, Compaq's strategy has seemed to be "try something then quit." Buy something then figure out that it isn't really working the way you wanted. Then re-organize. Then try something else. Then quit. Then modify what you're doing. Then announce a major new strategic initiative.
Compaq has sucked up acquisitions that it doesn't seem able to digest. It has made bold, sweeping moves like cutting off Internet-only retailers at a stroke. After making such moves it seems to back up, think about them, and change things.
If you want to move effectively in the world of electronic business, you will have to be bold and you will have to think about the entire enterprise. E-business is not about selling things on a website and nothing more. It's not about automating your supply chain and nothing more. It's not about smoothing out your administrative processes and nothing more. It's about nothing less than taking a look at your entire operation in all of its aspects, analyzing the critical information flows and core competencies, and then getting to work to develop the strategy that will keep you alive and thriving in the digital age. Half measures have no place.
Created/Revised/Reviewed: 9/2000
Top of
page
If you enjoyed this article, you may want to use the search engine on this page to find other articles of interest. The search engine searches this site as well as Wally Bock's Monday Memo newsletter site and the site which describes Wally's speaking and consulting services.
Reprinting and Reposting This Article
You may reprint or repost this article providing that the following
conditions are met:
- The article remains essentially unaltered.
- Wally Bock is shown as the author.
- The notice Copyright 2003 by Wally Bock or similar appears on the article.
- Contact information for Wally is included with the article. You may refer readers to this Web site as a way to meet this requirement. Please link to http://www.bockinfo.com/
- Here is the wording we suggest when linking to this site. "The article you've just read can be found on Wally Bock's extensive Resource Web site along with many other articles and resources."
Any other reprinting or reposting requires specific permission which is almost always
granted. Click here to request permission if necessary.
