Collaboration is the key to success

By Tom Guibrandsen

Wherever you look, business practices in the forest products industry are undergoing radical change. But one change will be more important than all the others, namely the move toward "collaborate e-business". The collaborate e-business world includes three basic dimensions - customers, partners/suppliers and employees. By placing supply chain management (SCM) and customer relationship management (CRM) at the heart of its business systems, the forest products industry is not only embracing e-business concepts, it is also getting involved with collaborate e-business.

Collaborate e-business is a lot more than just a web site though. It is also a way of searching and selecting customer specific product prices as well as carrying out availability checks, customer registration, order tracking etc. Business systems using enterprise resource planning (ERP), SCM and CRM need to be fast, secure and cost-effective in collaborate e-business.

For example, when a corrugated plant places an order on your web site for 50 tons of linerboard, the order triggers off your scheduling and work order systems as well as an inventory check. In turn, this may lead you to re-order products from your suppliers, advise delivery dates, generate ledger entries and so on, all the way along the supply chain.

Collaborate e-business can also give your customers access to the relevant parts of your business or ERP system. A mill should be able to define easily what information a customer needs to access via the internet. All the company will need is a standard web browser.

On top of that, seamless ERP and e-business integration allows information to be accessed quickly, helping to solve daily problems. For example, how and where are orders received and processed? Who decides where the goods/services are to be provided? Anyone involved in the industry knows that the list of questions could go on and on.

Get real

At the same time, the virtual world of e-business is enabled by the real world of logistics, supply chains and customer care. Order management, logistics, financials and communications with suppliers must all be handled in an e-business solution, enabling the internet service providers to deliver what is promised as well as reaching their own business goals.

New internet startup sites are not the only ones who can use collaborate e-business though. Forest products companies have the potential to expand their product range and service, as well as the scope of their business, by putting their faith in the internet. They can also save time and costs while increasing efficiency, for example in procurement.

Administration costs can be slashed, efficiency improved and time saved by allowing employees to make purchases directly from their desktops via electronic catalogs. This allows the purchasing department to focus on more strategic issues. As a result, supply chain cycle times can be reduced, enabling the business to be more responsive to customers and drive down operating costs. Reliable, real-time information is also accessible, which is increasingly important as both suppliers and end-users become more integrated into the business operation. This is what extending an enterprise is all about - reaching out to customers, suppliers, partners and employees to make business processes available anytime, anywhere.

System solutions

Business systems also need to support this constant change. Many companies that have looked to their traditional ERP vendors to help them become an e-business company have had little luck. They have had to go to one vendor for procurement, to another for front-office solutions, yet another for e-business platforms and even to a fourth supplier for business performance software. The result is fragmentation, with more time and money being spent on linking the systems and fixing data leakage. It is important to deal with business system providers that put both SCM and CRM at the heart of their product, including both internal and external business processes.

The ultimate goal of collaborate e-business is achieving profitability through satisfied and loyal customers. This involves finding out more about your customers' buying patterns and preferences. It also involves having a 360° view of a customer's interactions with your company. This knowledge can then be used for proactive measures, quick and satisfactory service, up-selling, cross-selling, or extending and broadening an offer to each and every customer, ideally on a one-to-one basis.

In a world of constant and rapid change, collaborate e-business will be a key to future success. The next set of winners in the forest products industry will be those companies who understand how e-business will redefine business models and add value to the supply chain. Only these companies will be able to take advantage of the internet to strengthen their positions with both customers and suppliers.

Tom Gulbrandsen is global director for IFS Forest Segment. He can be contacted at: tom.gulbrandsen@ifs.no