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Get ready for e-commerce

Get ready for e-commerce

Prior to his career with SupplierMarket.com, Burgstone held a variety of general management positions at Ford Motor Co. He was responsible for supply-base selection, qualification, negotiation, and cost management for $200 million worth of purchased products. He also held manufacturing engineering positions at Littlefuse Inc. and Furnas Electric Co. Burgstone's interest in manufacturing started at age 10 when he began working in his grandfather's machine shop. His high-tech experience includes management consulting for the Boston Consulting Group, where among other accomplishments he devised growth strategies for an integrated semiconductor company. He holds a bachelor's degree in industrial engineering from the University of Illinois, a master's in industrial and systems engineering from the University of Michigan, and an MBA from the Harvard Business School.

E-commerce will make engineers more productive in many ways, says Burgstone. Among other benefits, it will eliminate the need to wait for suppliers or customers to respond to them. And, it will result in dramatic cuts in time to market.

Design News: What are the prospects for e-commerce in manufacturing?

Burgstone: The prospects are excellent. We are just now seeing the emergence of the new tools that will enable e-commerce. The year 2000 will be a watershed year for those tools so engineers can work on the Internet, finding customers, parts, and working with colleagues. The National Association of Manufacturers published a study that said 85% of engineers were on the Internet. Engineers are using the Internet for e-mail mostly. The big unmet need is for e- commerce.

Q: What will the benefits of e-commerce be for engineers and manufacturing?

A: It will reduce time to market and cut the costs of sourcing new products. It also allows a broader reach for types of customers engineers and manufacturers serve. If you serve customers in one industry, sometimes it's hard to find other customers in another industry. With the Internet, you can get more information on more companies quicker, which, of course, cuts development time.

Q: What e-commerce tools are coming on line?

A: For one example, we are providing an RFQ (Request for Quote) builder. Engineers can write an entire RFQ to source a component, and match the RFQ to the best suppliers through our SmartMatch. All the engineers in any industry need is Internet access and a web browser.

Q: What are the major issues to overcome before e-commerce is widespread?

A: Among them is the problem of overcoming the fact that some people are set in their ways. I learned at Ford that you simply have to innovate. About 5 to 10% of manufacturing companies are innovative in their use of the Internet, and they are expanding their supplier and customer database. They are getting an advantage over others who for one reason or another are not innovating.

Q: What will be the impact of e-commerce on design engineers?

A: They won't have to wait for suppliers and customers to get back to them. E-commerce will make them more productive, and increase their value to the next higher level of management. It will help them cut costs and time to market, and enable them to multi-task more efficiently. By working over the Internet instead of faxing drawings to suppliers, they'll be able to do in hours what used to take them several weeks.

Q: What will be the impact on the manufacturing company as a whole?

A: E-commerce will allow companies to save money and find better suppliers. For smaller companies, e-commerce will allow them to expand their customer base at a low cost.

Q: Geographically, where will e-commerce take hold first?

A: It will take hold in North America first. More people here have used such sites as Amazon.com, e-bay, and other consumer sites, and have seen the power of those sites. There is a lot of opportunity in Europe and Asia Pacific, but no critical mass on those continents yet.

Q: What is SupplierMarket. com?

A: It is a site for on-line bidding. At a predetermined time, all suppliers bid on price for an RFQ. Everyone sees everyone else's prices. It eliminates backroom deals and brings transparency to the market. Suppliers will know why they won or lost a bid. We will be matching the most qualified suppliers with the engineers who need them, so it won't be a pricing game. The best supplier will win the work.

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