MRO purchasing pros demand more personal buying experience
Industrial distributors expect revenue from e-commerce to increase from 18% in 2006 to 38% by 2012.
By Susan Avery -- Purchasing, 3/1/2007 2:00:00 AM
A new report from Pembroke Consulting shows distributors expect more buyers to use online tools to source their MRO products.
According to Facing the Forces of Change: Lead the Way in the Supply Chain distributors predict revenue received from online orders for MRO items to grow from 18% in 2006 to 38% by 2012. Part of that growth, say distributors contacted by Purchasing, may be due to changes in e-commerce tools that provide buyers with a more personalized buying experience.
"People get very used to consumer websites where they can quickly check the status of an order without having to pick up the phone," says Deb Weis, director of marketing communications and e-business at Graybar in St. Louis. "It's much more efficient for them."
Weis says Graybar gets requests from customers who use EDI (electronic data interchange) to transact business with the distributor for detailed information on their purchases, such as pricing, product availability and order status. These customers are using EDI in an XML format which lets them exchange documents or communicate computer system to computer system via the Internet.
"It's easier for buyers to generate an inquiry within their company's computer system rather than use the telephone or navigate one of many supplier websites," Weis explains. And it's a process the distributor already is using with some of its suppliers.
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Distributors forecast revenue received from online orders for MRO items to grow to 38% by 2012. |
For MRO purchasing professionals whose internal customers use e-commerce systems available through such software providers as Ariba, Emptoris, Procuri, and others to place orders for maintenance items, "punch out" is a popular way of connecting to supplier websites where they view contract pricing and other terms and conditions.
On the supplier sites too, customers of industrial distributors such as Applied Industrial Technologies are looking for more customization.
"Our customers are asking for personalized settings so they can configure the website to search, say, our catalog by page number," says Vickie Molenda, e-commerce content and publishing manager at Applied in Cleveland. "Or, if they'd rather search by keyword, then we'll have the default set that way for them."
Applied's customers come to the distributor's site for detailed product information. "MRO buyers like the site's functionality that tracks purchase history and helps makes reordering easier via a personalized shopping cart of repair parts for specific machines," says Jim Hopper, vice president and chief information officer. He adds that now customers are asking for more, including three-dimensional images of products. The distributor is working to fill these requests with its manufacturer suppliers.
Looking ahead, all distributors expect customer orders for MRO items via EDI systems to make up 11% of their sales revenue by 2012, an increase from 7% in 2006, according to the Facing the Forces of Change author Adam Fein of Pembroke Consulting in Philadelphia. Orders via distributor website will comprise 13% of sales, up from 3% during the same time period.
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2007 brings lower prices, and innovations from distributors
Figures from the new NAW report Facing the Forces of Change: Lead the Way in the Supply Chain show distributors expect MRO buyers to increase use of online rdering tools.
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