A New Book
On Lean Manufacturing
From Manufacturing &
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More and more companies and government agencies are creating electronic catalogs of parts and products, but few have achieved any level of success in their catalogs being used or useful. The reason for the failure, says the founder of the nation's first company to promote the idea of ordering parts over the Internet, is because these catalogs are being created as centralized databases and the effort involved in keeping them updated is too great for one organization to handle.
"It's a nightmare having to update a centralized database," says PartNet founder Don Brown. "Every other EC company has gone out and used this approach but now people are waking up and finding that it's a totally unmanageable system."
Unlike all other electronic cataloging efforts, Brown claims, PartNet has pursued a distributed database system, whereby individual vendors keep their product catalogs current and users can shop from numerous companies because the formats are the same. PartNet is one of the lead contractors for the DOD E-Mall and Navy's ITEC Mall.
"The distributed model of catalogs is going to take off," says Brown. "When or how large [a system that is created] is impossible to predict, but there is a general recognition that this is the way to go and it will be adopted fairly quickly."
Two years ago few companies were working on putting their catalogs online. That's changed. Today, most manufacturers and distributors have electronic catalogs or are in the process of creating them. "In the last 12 months there has been a huge rush to move in this direction," says Brown. "Two years ago, if we said we want to connect to your catalog they'd hand us a thick book and say connect to it. We said, 'We're sorry. We can't work that way.' "
The next wave, says Brown, is the creation of virtual supply-chain partnerships tied together through their electronic offerings. These partnerships will service large customers in specific industries.
One such effort is being run by Newark Electronics, which is using PartNet's software to provide 124,000 different parts to the Sacramento Air Logistics Center. Users at the facility have cut the time it takes to order spare parts from 134 days to an average of two days, says PartNet.
The infrastructure is already in place to make an electronic system of ordering components, parts and products a reality. The Internet is well entrenched and key aspects of it have been standardized. Most companies have installed high-speed data telecommunications lines. Secure servers are commonly used and more people have no problem sending credit card numbers over the Web. There have been few -- if any -- high-profile stories in the press about security breeches.
The latest and most important development in creating an ubiquitous online marketplace is XML tags that allow buyers to find similar information on competing products such as prices, models and features. "XML is a great tool for the future," says Brown. "If you do XML, you can interface with a lot of customer channels."
PartNet's own software programs have been sold to the U.S. government (DLA and DOD) and the private sector, including Sun Microsystems, Hewlett Packard, DEC, Dell, GE Capital, and others. "There are various large buyers in various stages of negotiations, but none that we've announced like DOD," says Brown. The company's products provide a port to the supplier's electronic product database and a "broker" that creates the look and feel of a mall for the buyer.
The United States federal government is the leading developer of electronic catalogs. It is working not only with PartNet but also with the CommerceNet consortium of 500 companies in developing a new cataloging system that is based on XML tagging and it expects to demonstrate a system starting in mid October.
"The whole idea of interoperability is critical," says Ron Parsons of CommerceNet. "When you start dealing with the federal government - the world's number one buyer - it makes sense as a place to demonstrate interoperability." XML provides the foundation for creating interoperable catalogs from different companies.
"It wasn't until HTTP came along and gave us a common framework that we could really do what the client-server model always promised," says Parsons. "The same thing is happening in the electronic commerce sphere with XML and the ECo (electronic commerce) framework that will allow us to do interoperability and implement the ideas we couldn't accomplish in the past."
The Catalog Interoperability Pilot project headed by CommerceNet has overcome more political challenges than technical ones. "Whenever you are trying to do something that is a paradigm shift, you're going to have resistance," says Parsons. With a new system, the barriers to entry into the marketplace are going to be falling, providing an opportunity for new companies to start selling to an otherwise entrenched customer base.
"If we do it right, those people that do have a good product and a good aggregation of products will have a market advantage," says Parsons. "They will create marketplaces for people who have value and they will win."
Vendors should be looking forward to the new era of XML tagging because it will enable them to place special tags on their items to differentiate their products from others. "It prevents it from being a price-only war," says Parsons. "They will be able to work with people inside the organization and associations that represent them in a vertical marketplace to make sure the tagging infrastructure is in place to allow them to show off who they are." (Outside of the government market space, the RosettaNet, which is doing this for the information technology industry, is the first to roll out such a system.)
The Catalog Interoperability Pilot project will run a demonstration phase that will allow government buyers to do online purchasing from October 15 until the end of October. Pricewaterhouse Coopers will issue a report on the system by November 15. "It looks good," says Parsons. "The agencies are on board and are working closely with us. Industry is playing along very well."
For more information on PartNet set your browser to http//:part.net.
CommerceNet is located at www.commercenet.com on the Internet.
