The Internet. Everyone is talking about it. It's nearly impossible to read a magazine or newspaper without encountering a discussion of it. Because there is so much being said about the Internet, it's hard to cut through all of the hype to find out how this new technology can help your business today.
What many companies have discovered is that while having a presence on the Internet is a popular way to ``advertise,'' it's unclear if presence alone actually generates any business.
What some companies are starting to realize is that the Internet can be extremely effective for business-to-business commerce. This means businesses are using the Internet as a mechanism to facilitate commerce with other businesses, most often customers and suppliers.
Today, in the tire industry, distributors and wholesalers are using the Internet to provide a link to their customers to conduct secure business transactions.
Wholesalers are giving dealers the ability to perform inquiries and transactions over the Internet 24 hours a day. The most common functions in wholesalers' business-to-business systems include the ability to search inventory, obtain pricing, check on availability, submit tire adjustment claims, submit national account billings, create orders, review the status of orders and display accounts receivable statements.
In the past decade, many wholesalers have provided a variety of ways for customers to communicate with them electronically. In reality, these methods often required a long distance carrier, created bottlenecks in systems, distributed information that wasn't current and caused delays that led to inaccurate estimates of available inventory and subsequent errors. Internet commerce avoids these problems by using a ``thin client'' and by providing legacy connectivity.
Internet commerce is based on a ``skinny'' or ``thin'' client. This means that there is no proprietary software that needs to be loaded, maintained and supported on the dealer's system.
A typical Internet commerce system only requires dealers and customers to have Microsoft Windows loaded on a 486 or Pentium PC along with an Internet browser, such as Netscape, or Internet Explorer (both of which are free of charge or $20 with documentation). Since only minimal software is used on the client side (a ``thin client'') maintenance and support costs are greatly reduced.
An advanced system that is using this technology can give wholesalers the ability to provide live or real-time information over the Internet. Not information that's one day or one hour old. Connectivity to the wholesalers' legacy accounting system is essential to making electronic commerce work. As a customer searches inventory, checks on availability and relies on pricing, this information has to be live and accurate.
Legacy accounting connectivity provides for a live hookup of the two systems. This means that when the dealer is searching inventory and sees that 10 tires are available and creates an order, the order is automatically created in real-time on the wholesaler's accounting system and allocates the inventory for this customer right away.
In July 1996, S & S Tire of Lexington, Ky., implemented a business-to-business Internet Commerce system called SpeedWay. In the past, S & S allowed its local company-owned stores to dial into the system to check on inventory availability, but it was always limited to 10 people at a time. They couldn't allow everyone who wanted to dial up to do so, because it would have brought down the overall performance of the in-house system. Now, the SpeedWay system allows many customers to access the system without slowing down the in-house system.
``We expect 200 of our customers to be using the system by the end of the year,'' says Jim Bryant, S & S Tire's director of operations. ``Customers now dial in locally, incurring no toll charges. They are checking availability and creating orders at any time of the day. The amazing thing is that we receive their orders within seconds of when they place them.''
Internet commerce is a win-win solution: the client realizes the benefits of timely and accurate information, close coupling to the supplier, and high performance for very low investment and maintenance cost. The supplier, meanwhile, benefits from closer contact with customers, reduced support and customer service demands, and increased and more effective use of in-house computing resources.
Internet commerce has a successful track record where the rubber meets the road.
Mr. Fischer is a co-founder and president of Signal Software Corp. in Pittsburgh, which provides business information management software for the tire industry and automotive aftermarket.