MRO & THE INTERNET: Online MRO sourcing on the rise
By Paul Barker
Thousands of dot coms may now be dot gones, but that hasn't stopped a number of machinery and equipment MRO distributors across Canada from adopting the Internet and more specifically, e-procurement s...
Thousands of dot coms may now be dot gones, but that hasn’t stopped a number of machinery and equipment MRO distributors across Canada from adopting the Internet and more specifically, e-procurement strategies as a new and preferred way of conducting business.
A key reason is that e-procurement — the ability to buy and sell goods and services online — is having an impact on how virtually every manufacturing sector in the industrialized world operates today. Its reach and influence is so prevalent that any distributor within the MRO sector that chooses to ignore it could end up suffering the same fate as so many of the dot com start-ups that have crashed and burned.
John Moore, vice-president of ARC Advisory Group, a Dedham, Mass. consultantcy that specializes in the manufacturing sector, contends that e-procurement is far more than the ability to purchase products online.
“It can cut procurement costs, streamline ordering, shorten cycle times, broaden supplier and product selection, and control spending,” he says. “It can give suppliers access to markets, tighten customer relationships, and lower customer acquisition and service costs.”
Meanwhile, a report released earlier this year by The Aberdeen Group Inc. on e-commerce strategies and the MRO market, predicted that the winners in this new economy will be those that can use the Internet to organize internal and external resources to rapidly respond to changing market dynamics and customer requirements.
“The Internet has enabled new business processes and business models that would have been too costly and complex to manage in the physical world,” the report said. “Simply put, the Internet is changing the rules of business, and companies must adjust accordingly. In the new economy, the winning companies are proving to be those that can leverage the Internet to organize people, assets and resources to rapidly respond to changing market dynamics and customer requirements.”
According to the Boston, Mass., consulting firm, the early MRO adopters of e-procurement have already realized significant process, cost and productivity improvements.
To get a feel for the level of e-procurement activity currently going on in this country, Machinery & Equipment MRO recently visited the web sites of eight major industrial distributors. Of the eight, only one — Canadian Bearings Corp. of Mississauga, Ont. — had yet to implement a program that allows customers to buy goods online.
That is expected to change next year with the company’s scheduled introduction of e-procurement capabilities. Farhang Manucherian, Canadian Bearings’ director of technology, says that while to date “there hasn’t been a great deal of demand among our customer base for this,” the company expects eventually that the demand will rise.
“It’s a time-saving device and cost-saving device,” he says of e-procurement. “It will come and we will be ready for it.” The company’s website address is www.canadianbearings.com.
Note that the following is not a report card or a technical critique, but simply observations on what each company is doing in this area. In the spirit of fairness, the distributors appear in alphabetical order.
Acklands Grainger Inc.: The Canadian subsidiary of U.S.-based W.W. Grainger Inc. distributes equipment and parts ranging from air compressors and gear motors to safety and welding supplies from 550 brand name manufacturers including ALM, Ametek, Columbus McKinnon and Beco.
The Richmond Hill, Ont., based company, which currently has 188 branch locations across the country, has invested heavily in e-procurement, as witnessed by the sophistication of its website. As an example, products can be found and later purchased through a search engine tied into the company’s online catalogue. Registered users can search by item number, manufacturer number, manufacturer name, brand name or customer part number. Once logged in, a customer’s items are electronically saved in a shopping cart until an order is submitted and finalized. Website address: www.acklandsgrainger.com.
BC Bearing Engineers Ltd.: With over 100 manufacturers ranging from NSK to NTN Bearings represented, this Burnaby, B.C., based company’s product scope includes bearings, power transmission components, material handling components, variable frequency drives and systems, mechanical packing and gaskets, and other allied industrial products.
With consolidated sales in excess of $140 million and over 30 branch locations in western Canada, it services customers in such markets as forestry, mining, food processing, agriculture, petrochemicals and high technology. Customers can view over 10,000 part numbers either directly on the web in HTML format (a coding language for websites), or as a downloadable Microsoft Excel spreadsheet. The entire buying process takes place at BC Bearing’s electronic Order Desk and can be completed after only two or three clicks of a mouse. Website address: www.bcbearing.com.
BDI Canada Inc.: A Mississauga, Ont., based distributor of ball, cam follower, cylindrical, mounted, needle, plain, sleeve, taper, precision, spherical, and thrust bearings, and much more, BDI’s shelves are lined with products from an assortment of major manufacturers that include FAG Bearings and NTN Bearing Corp. Its 37 branches are located in Ontario, Quebec and Newfoundland.
Registered users of the BDI website have use of a variety of electronic services ranging from real-time access to inventory at branches and distribution centres to computerized billing. All payments occur through Electronic Data Interchange (EDI).
An ISO 9002 company, BDI describes its site as a one-stop sourcing of all MRO supplies. It offers its customers on-site training before they shop online. Website address: www.bdidirect.com.
Commercial Bearing Service: In business since 1954, over the years the company has developed a product mix that includes bearings, power transmission products, and industrial and safety supplies. It has 16 branches throughout Alberta and Saskatchewan.
Commercial Bearing views e-procurement as a way to simplify the purchasing process for its customers and at the same time, help in reducing supply chain costs. Customers can access the name of a product, serial number, photograph and list price through a search engine that is part of its online storefront operation.
Anyone registering is asked to enter an e-mail address along with a password. The address acts as a unique Account ID that allows all shipping information to be kept on file. Website address: www.commercialbearing.com.
Motion Canada: The link for this distributor takes you to the website of its parent company, Motion Industries Inc. of Birmingham Ala. The product menu includes bearings, electrical, fluid power, hose, and linear and mechanical PT products from nearly 50 manufacturers. The company provides access to more than two million parts through MotionMRO.com, its online service. Motion Canada operates 64 locations in nine provinces.
Once registered, members can view product information, place orders, track order and shipment status, and charge a purchase to an account or credit card through its Internet Ordering System. In terms of electronic payment, EDI is fully integrated into the order fulfillment system. Website address: www.motionmro.com.
Tenaquip: Established in 1968, Tenaquip became the first firm in Canada to distribute industrial products, through a catalogue. Today, the company currently stocks more than $7 million in inventory, encompassing 110,000 different products, ranging from abrasives to maintenance instruments, the majority of which can be ordered online. It remains the country’s largest family owned industrial supplier, with locations in Toronto, Ottawa, Cornwall, Kingston, Belleville, Brant
ford and Cambridge in Ontario and one in Montreal, Que.
Tenaquip is also a master distributor of AutoCrib systems, a computerized vendor- managed inventory system that provides accountability and usage tracking for manufacturing plants and industries. The AutoCrib system, which is now used in the company’s electronic order entry system, allows managers to print reports on transactions, returns, usages and inventory.
In terms of purchasing, Tenaquip’s EDI network now includes more than 25 trading partners and is fully automated to assure a stable flow of data between parties. Website address: www.tenaquip.com.
Wainbee Limited: A Mississauga, Ont., based distributor of technical and supply chain solutions for automation and control products, offerings include pneumatics, hydraulics, air tools, machine tool elements, electro-motion actuators and controllers, and electronic controls from such manufacturers at Butech, Destaco, Gardner-Denver and Parker. Wainbee, which was established in 1957, has 14 locations across the country.
The website’s registered users can access an “online cart” that is far smarter than a shopping cart found at the supermarket. It automatically keeps track of selected items and how much each costs, and alerts users if quantity price breaks are in effect for any product purchased.
An added bonus is the existence of Help Pages that answer any questions customers might have while they are shopping online. Website address: www.wainbee.com.
Of course, these aren’t the only sources for industrial supplies over the Internet, but these firms all have a long-established Canadian base, trained staff who are knowledgeable of regional concerns and requirements, and a high level of dedication to assuring a successful e-commerce experience for their industrial customers.
Paul Barker is a veteran technology writer based in Toronto, and was founding editor of Dot Commerce magazine.