Office supplies buy goes online
Ordering office supplies electronically helps corporate buyers reduce processing costs by 30%.
By Susan Avery -- Purchasing, 4/23/1998
Excited about the prospect of requisitioners placing orders online, corporate purchasing managers are implementing new buying systems within their companies for office supplies. At some companies, requisitioners now are acquiring supplies from distributor catalogs posted on the Internet, others are placing orders via electronic data interchange (EDI), and still others are using such conventional buying methods as sending reqs over facsimiles and by telephone.Each of these systems is considered electronic commerce by many of the big office-supplies distributors as well as systems through which the suppliers make product and pricing info available to third-party software companies. These companies manage the data for some corporate buyers' own online catalogs. The distributors also provide access directly into their own proprietary ordering systems for some customers. As electronic commerce provides clear benefits to both suppliers and purchasing managers, distributors are working closely with customers to help implement systems that best fit each company's corporate needs and culture.
Electronic commerce "means different things to different customers with different needs," says Ken Silay, director, electronic commerce BT Office Products International (BT OPI), Buffalo Grove, Ill. He says that BT OPI sees itself as a consultant to customers for a whole gamut of electronic commerce systems.
Among the systems BT OPI provides its customers: an Internet ordering system called SyntraNet which is accessible through a standard Web browser; smarrt, a system that operates on a company's PC LAN (local area network) or WAN (wide area network); and EDI, for customers with their own purchasing systems. BT OPI also provides catalog information to third-party catalog management services such as Commerce One, Ariba, and TPN.
Typically, electronic commerce systems available through office-supplies distributors provide requisitioners at customer companies with catalogs that may contain thousands of office supplies. The catalogs, however, can be customized to limit requisitioners to certain items. They also have capability to present to requisitioners pre-negotiated contract pricing. Some have pre-formatted order forms. Catalogs have other controls as well; many have built-in approvals or capability to route within a company to managers with such authority.
Staples provides its customers with five electronic commerce systems. "We don't view electronic commerce as one size fits all, says Chris Long, director of electronic commerce at the Westboro, Mass.-based office-supplies distributor. He cites as an example one customer that uses a proprietary EDI system at company headquarters, while requisitioners at branch locations use the telephone to place orders with the supplier. "While use of the Internet may be the best option for some customers," he says, "for others, alternate systems may make more sense."
Electronic commerce systems available from Staples include PC Link, a cd-rom-based product that operates on a PC or LAN. With PC Link, customers may place orders via facsimile or telephone. Its Tel Link product is an automated voice-response system. Using the telephone, customers type in SKUs (stock keeping units) and quantities required of the products they're ordering. Staples also is pilot testing a new Internet product with customers who already have agreements in place with the distributor.
Online Link is Staples' dial-direct system that connects to its customer-service system. With this system, customers have access to the same screen that the company's service reps use. The system provides customers with real-time information and is, perhaps, one of the quickest ways to send orders to the distributor, says Long. "It does, however, require that users receive some training." Staples also supports requests for product information used in customized electronic catalogs and receipt of orders from customers' proprietary EDI systems.
Growing like wild fire
Current demand for electronic commerce systems is strong. BT OPI's Silay estimates that about 20% of his company's customers use some form of electronic commerce to place their orders for office supplies. He expects this figure to double in the next two years. For the company's Internet product alone, Silay says customers placed orders for about $10,000 of supplies in August, 1997, its first month in operation. By January, 1998, the figure increased to $650,000.
At the end of 1997, 1200 customers were using I-97, an Internet ordering system available from Boise Cascade Office Products, Itasca, Ill. That's a 20% increase over the company's projections, says Laura Longcore, senior manager, electronic commerce, who estimates use of the system can save customers as much as 30% on processing costs.
Agreeing with Longcore on her cost-savings estimate, Staples' Long says such systems also provide customers with improved tracking and reporting. Electronic buying systems also are easy for requisitioners to use and can be accessed 24 hours a day, he adds.
"Purchasing managers are excited about pushing order entry down to the desktop," says Boise's Longcore. "This frees buyers' time to spend on more value-added activities. Electronic commerce tools help to improve order accuracy, and there are not as many returns. With fewer processes, receiving typically improves as well."
In addition to its Internet system, Boise also receives orders from customers via EDI; through its PC- or LAN-based system called CEO; by e-mail; and through direct access to the company's host computer. This system allows customers into the host system as it would a customer-service rep.
Longcore says she's also seeing a trend toward purchasing's use of extranets to place orders for office supplies. This way, requisitioners first go to the purchasing's operation Web site on their company's intranet. There, he or she selects an icon for the supplier of the item he/she wishes to order. The requisitioner then is linked to the supplier's catalog via an extranet. A digital certificate and an http host form (which asks the customer for information that identifies him) recognizes the requisitioner as a customer. Once the requisitioner selects his items, the supplier sends a shopping cart back to the intranet for necessary company approvals. The requisition then is converted to a purchase order and sent back to the supplier via a traditional EDI system.
To further improve efficiency, requisitioners at some companies are using purchasing cards to pay for transactions they conduct electronically (see sidebar). Longcore says customers are using the cards to pay for about 6% of the orders her company receives. To help facilitate such efforts, office-supplies distributors are supporting activities by several groups to create standards for purchasing on the Web (such as the Open Buying on the Internet consortium).
To alleviate security concerns that may arise from paying for orders placed on the Web, Longcore points out that there is an option available to buyers called "aliasing." To acquire supplies with an alias electronically, a customer will give the distributor his or her purchasing card number, which is cross-referenced whenever an order is placed.
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