Web Portal Builds Concrete Relationships
Striving to stay competitive despite lower operational costs, St. Lawrence Cement Company turns to a web portal to facilitate order processing and delivery.
Transporting low-cost commodities with an eye toward saving money requires seamless communication and information sharing among suppliers, intermediaries, carriers, and consignees. Any breakdown in this interchange can result in compromised service performance and reliability, not to mention increased transportation and logistics costs.
Perhaps nowhere is this more apparent than in the cement/concrete manufacturing industry, where the actual cost of manufacturing product and the cost of transporting that product converge.
Streamlining supply chain processes is a critical differentiator among companies looking to retain existing contracts and compete for new ones. Further tempering this need for collaboration is a growing market for cement products. Worldwide demand is expected to rise 4.1 percent annually through 2006 to 2.1 billion metric tons—valued at $144 billion—according to a recent report by the Freedonia Group.
As a result, old-economy-type cement manufacturers are now looking beyond their fixed, regional circle of customers and eschewing outdated communication devices for more efficient and modern web-driven exchanges, all in an effort to deepen their footprint in a softening market.
Laying Groundwork for Collaboration
As one of the largest concrete and cement suppliers for the construction industry in North America, with more than 15,000 customers, Ontario-based St. Lawrence Cement found itself buckling under economic pressure in early 2001.
Striving to stay competitive despite lower operational costs, the company selected iSTARK, Concord, Ontario, to develop a fully integrated and flexible web portal—Cement-Online—to facilitate order processing and delivery.
"Two years ago we began formally investigating how we could use Internet technology to build better relationships with customers, improve efficiency, and provide enhanced services," says Susan Pinder, e-commerce site manager for Cement-Online.
"Our approach was to speak directly with customers to find out where they were in terms of e-readiness. From these interviews, we came up the value-added services we wanted to build into a web portal."
Aside from responding to and soliciting customer input for a more web-centric communication interface, St. Lawrence Cement was also feeling pressure from within the marketplace to evolve its business strategy and serve its customers better.
"There's nothing greater than competition to get you moving," notes Dave Codack, president and CEO, iSTARK.
During that time, St. Lawrence was looking at other ways to get services to its customers. There was a perceived threat of what might happen if online marketplaces began doing reverse auctions on cement.
Two compelling forces at play convinced St. Lawrence to get in the game. First, could it provide more services to its customers? Second, if it didn't, was there a legitimate threat of losing some of its share?
The Competitive Difference
"The difficulty in a commodity- based business is differentiating yourself from your competitors," notes Codack.
Companies such as St. Lawrence have realized that to create competitive separation they must offer services that create more value for the customer—essentially raising customer expectations.
To help St. Lawrence revamp its operations and meet these heightened expectations, iSTARK designed Cement-Online to help users place orders via the Internet, access tools, and communicate seamlessly with supply chain partners.
"With the iSTARK application we're not just helping companies sell cement online," says Codack. "When St. Lawrence embarked on this project, it did so because it thought it was a necessity to provide selling online. The real value has been in some of iSTARK's other features."
Tantamount to this realization, St. Lawrence saw the portal as a unique opportunity to provide a full-service resource for its customers and partners.
"We ended up perceiving our role as an e-enabler with our customers—working on this project together, rather than just implementing it," notes Pinder. "The application is customizable so we can create roles for different users.
"For example, an accounting person can log into the site and view account balances and statements and look up invoices and bills of lading. We can also set up a different profile for someone who strictly wants to order," she adds.
Being able to match pertinent information on the site to specific user interest and roles has proven a great advantage to customers.
Aside from online ordering and truck and shipment status information, St. Lawrence has also created a catalog of resources for its users. The portal includes industry news and trends, broken down by industries (cement, concrete, and construction) and drilled down to local and regional coverage.
It also includes a technical library that offers quality certificates, material safety data sheets, and technical articles—all aimed at creating a knowledge base of industry information.
"We thought these tools were the real hook to this portal and that proves to be true," notes Codack. "What is surprising, though, is that the ordering functionality has kept pace with these other features."
Having a one-stop shop to place orders and gather useful and actionable information has had a great impact on many of St. Lawrence's customers.
"One customer noted that being able to pull material safety data sheets directly off our portal, then print it out while at a construction site, was a distinct advantage," says Pinder.
"Additionally, this same company reported a significant reduction in order cycle time. It can place an order and receive a confirmation right away, then go in and follow that order through the process."
With wireless capabilities, customers can conceivably place supply orders while onsite. In terms of efficiency, this enables users to better match supply to demand, while keeping inventory levels at a minimum.
To further expedite time-sensitive shipments, Cement-Online offers an express ordering feature. Users simply click on an icon that is preconfigured to customized ordering parameters, and a specific product is delivered the next day at a specified time.
"The functionality of the portal can help customers better manage their ordering process," reports Pinder. "They can place several orders at one time and schedule them into the future—by day and time—using a calendar feature. This way they have a record of their orders that they can use to modify current or future orders."
Laying Down a Foundation for Success
St. Lawrence expects to continue adding interactive features and tools to the site—e-signature capture capability, and forecasting, for example—as it raises its own bar of expectation. The portal has similarly helped St. Lawrence streamline its own internal processes. Capturing orders electronically ensures fewer errors, and St. Lawrence has a better process for managing and accounting shipments.
As a portal, Cement-Online also offers an efficient way of distributing targeted information to the manufacturer's many customers. To date, 40 percent of volume is transacted via Cement-Online, according to Codack, and St. Lawrence hopes to grow that number to 70 percent in the near future.
As Codack and Spinder readily admit, it is the customers that are driving this change in process strategy. St. Lawrence is merely laying down the foundation for a more collaborative environment.