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Virtual Stores Offer Managers Real Opportunities
A decade ago, the Internet and the opportunities it promised sparked a revolution in procurement. Today, online shoppers fill virtual shopping carts in record numbers, and some merchants are seeing their visions of dollar signs turn into real and substantial profits. For example, eBay Inc., which opened its virtual doors in 1995, recorded net revenues of more than $756 million in the first quarter of 2004.
The e-procurement boom has attracted the attention of maintenance and engineering executives. While incorporating the Net into their purchasing plans has been a challenge for some and a breeze for others, most, if not all, maintenance departments use the Web to some degree in their purchasing practices.
Code books, testing equipment and speakerphones are just some of the items the maintenance department at Good Shepherd Center in Arbutus, Md., has purchased online.
The Web has been particularly useful in obtaining hard-to-find and discontinued items, says Jim Zaloudek, the center’s director of engineering. For example, the Web was a tremendous help when his department needed to replace discontinued plumbing valves.
“We needed to search the country for a supplier who still had the replacement parts we needed,” Zaloudek says. By using search engines and key words, he found several suppliers that carried the discontinued parts.
Searching the Web with several key-word combinations will produce the best results in finding rare items, Zaloudek says, adding that he tried several Web searches to find a specific kind of blue-lined graph paper.
“I did a search on the Net using the key words ‘stationary,’ ‘paper’ and ‘graph,’ as well as other word combinations like ‘quadrille and pads,’ ” he says. “I found the exact paper I wanted, ordered 15 pads and had them in three days.”
J.D. Thompson, director of maintenance at Hendrix College in Conway, Ark., finds the Web useful in locating vendors.
“Managers can find many more vendors online than in standard directories,” Thompson says. “Our bookshelves are full of vendor catalogs that we only browse through if we don’t know exactly which product will work for our specific need.”
Like many managers, Thompson uses the Web primarily as an information resource. After gathering information from various sites, he says he still has to call vendors because many manufacturers don’t provide price information on their Web sites.
“Most [Web sites] simply refer you to the local supplier or representative for the actual purchase, and most can’t even give you a ballpark price to use for comparative shopping,” Thompson says.
Results from a recent survey indicate that some managers haven’t plunged into e-procurement because their organizations’ purchasing guidelines prohibit online shopping or their departments lack technological capabilities. Others prefer seeing the products in person or want to avoid complications if they have a problem with the item.
Returning items bought via the Internet can be a hassle, says Frank Merrins, director of plant operations at Brooking Park Nursing Center in Chesterfield, Mo.
“If I use a local vendor, I can just give the item back to him,” he says.
The way managers buy products will continue to change as technology advances and online merchants find ways to make the Internet more user-friendly and responsive.