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Net Purchasing: Not Ready for Prime Time

An exclusive survey of Packaging World purchasing readers indicates enthusiasm for buying via the Internet but little actual experience in packaging purchases thus far.

If W. W. Grainger ever expands into selling packaging materials, it could become a significant supplier in an instant, say Packaging World readers with purchasing responsibilities. That’s because survey respondents at companies that are purchasing on the Internet most often are buying general office or plant supplies from the Grainger Web site (www.grainger.com).

By contrast, relatively few purchasing readers surveyed for Net Sourcing say their companies have ventured into Internet buying for packaging products. In fact, a sizable number of these buyers report their departments have limited or no access to the Internet, and many also report that their suppliers are not ready to take Web-originated orders.

Enthusiastic to buy

Still, the majority of these buyers are enthusiastic or at least interested in exploring the concept of buying via the Internet.

These conclusions come from a telephone survey conducted in January of PW readers who have purchasing responsibilities. Some 50 in-depth interviews with packaging people around the country were conducted by Milford, NH-based Frambach & Co. Qualitative rather than statistical in nature, this research explored readers’ opinions and personal experience with Internet buying, both for personal and professional use.

To be sure, some manufacturers are beginning to understand how the Internet can be used to buy packaging. Others, like Owens Corning (see p. 6) are much further along.

The national purchasing manager for a major food company indicates that certain people within his company’s purchasing organization have been authorized to use the Web. Some of his company’s people can use the Web to research a company and its products, he said, and within certain financial limits, these people can make purchases using a company credit card. “Some of our preferred suppliers [allow us] to place orders on the Web. . .and we are able to look at [their] inventories,” he reported.

Despite this experience, he expected his company to move slowly. “It’s still in the beginning stages for both suppliers and buyers. You have to approach it cautiously because it’s hard to know exactly [how it’s going to work].”

A buyer for a Western manufacturer of processed foods says that only a few of her vendors are equipped to operate on the Internet. But her past experience makes her an enthusiastic proponent. “At the last company I worked at, we used EDI (electronic data interchange), and it was great. I saved time and work because it eliminates phone calls and I can do it during off-time hours. Plus, order confirmations are quicker, too.”

Based on her experience, she cited better speed and the lack of paperwork as major benefits to Web-based buying. Those advantages, she said, add up to “streamlining administrative costs. Still, she predicted that her company would go slow in moving toward Internet purchasing. “We’re doing less than 5% on the Web now, and I don’t see that changing in the next year or so because we haven’t budgeted for it.”

Caution prevails

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