E-commerce: Accentuating the personal in manufacturing

E-commerce is making itself felt in the world of manufacturing, but businesses say it's still no substitute for the face-to-face approach, reports PAULA OLIVER.

In a manufacturing world where B2B - or business-to-business - e-commerce is the latest buzzword, it seems many Kiwi players are keener to rely on the good old-fashioned F2F approach.

Face-to-face, that is.

A small number of local manufacturers have been quick to embrace the opportunities presented by e-commerce, but many contacted by the Business Herald said they thought local businesses had always differentiated themselves by offering great personalised service, and should continue to do exactly that.

Talbot Plastics, a Christchurch exporter of plastic moulds for items like dishwasher drawers, is one company using the net to increase its exports to the US - but not by just setting up a website and waiting for orders to flow in.

Managing director Steve Wilson says businesses run the risk of assuming that a website will solve all their e-commerce questions.

"Our website actually doesn't help much at all, because we get inquiries from people wanting six buckets or something like plastic bags that we don't do," Mr Wilson says. "Every e-mail has to be answered, so it can take a lot of time."

Nevertheless, the company has found a way to use the net. When Talbot Plastics wanted to increase its overseas customer base three years ago, it used the net to search for companies with similar attributes to its local customers. Once it had identified them, Mr Wilson sent cold call e-mails with a photograph of himself attached, to introduce the business.

"I found that was better than going over, because the customer builds up an idea of how big your business is, and it's usually a lot different to reality," he says.

The tactic proved successful, and Talbot now conducts most of its business via e-mail, including sending a computer-based analysis of a customer's order, and updated progress photos.

"The US customers send their orders at the end of their day, which is the beginning of ours, so it looks like we work overnight to have the design back to them in the morning," he says. "We'd find it extremely difficult to survive without the e-business we have now."

Wellington-based kiln maker Windsor Engineering is using the net to communicate with suppliers, and although it does not yet purchase online, chief executive Peter McKee says the move is not far away.

"We're not quite there yet, but there is some interaction developing, so we never know where it will take us," he says. "We've had good feedback from our website, but at the moment it's a modern communication tool for us."

Ullrich Aluminium managing director Gilbert Ullrich says the firm faced pitfalls when it set up a website, because it received "small orders from ladies in England wanting one flyscreen."

"I think face-to-face selling is the most important thing, and companies will fall in a hole if they lose what makes New Zealand different - great, personalised service," he says.

Glenfield-based Tubepack, which manufactures tubes for the world's leading cosmetic companies, also emphasises personalised service.

Tubepack is not using the net to buy supplies, but does source its machinery from net searches. Its website is registering hits from as far away as the Middle East, but it has no plans to introduce a purchasing service online.

"The most important thing when setting up a website is to link it to others, because there's no point in being there if no one knows about you," says international sales manager Wilma Carvill.

Kiwi clothing manufacturers are a mixed bag when it comes to e-commerce, some proving successful where others fail.

Gulf Star Products managing director Ross Munro says his Line 7 clothing website had sales of $1.5 million last year, on the back of America's Cup gear.

"What's made us succeed so far is partnering with others and channeling to our site through others like Ericsson," he says. "We're using it for business-to-consumer stuff, because a lot of our suppliers are in Hong Kong and China, where it's a little more antiquated."

Case Study:

Talbot Plastics

Why did you get into e-commerce?

If we didn't, we felt we would get left behind by a paradigm shift. We started three years ago and now we are quite reliant on the internet-based stuff.

What did you do?

We started by searching the net for companies that appeared to be doing what our NZ customers were doing. We then sent e-mails introducing who we were and what we could do.

What benefits has it had?

It's allowed us to get into niche markets, offering high quality, good service and short runs to big companies.

How have you measured this?

We haven't consciously measured it, but the proportion of our business which is internet or e-mail based is probably over 50 per cent.

What difficulties have you had?

We've had a few technical hiccups; we only need to be off air for a day or two to lose e-mails and be in terrible trouble. Managing growth in hardware and software has been difficult at times. The biggest issue is planning upgrades.

In hindsight, would you have done anything differently?

Nothing major ... we've been pretty lucky – but fortune favours the prepared.

What next?

We're working with others on a plastics industry website. We can make NZ a natural place to go for anything that's plastic.

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