The Web Pays: New Market Recasts Industries - Page 2

-Tech High"> High-Tech High

By Charles Babcock

It should come as no surprise that the top five spots on this years Interactive 500 belong to high-tech manufacturers: Intel, IBM, Cisco Systems, Nortel Networks and Dell Computer.

Dell and its friendly-faced chief executive, Michael Dell, are good examples of todays always-on, always-going techies. Dells factories never keep more than two hours of inventory on hand, because the companys Internet-based supply chain is geared to deliver parts just in time and with great reliability.

"Were trying to squeeze it further," says Matt Boucher, a company spokesman.

Dell constantly projects the needs of its specific factory locations based on customer orders that it captures on its Web site. Suppliers continually check those projections at Dells Value Chain Web site and prepare their shipments accordingly.

"Before the Value Chain Web site, we had a lot of employees creating spreadsheets and printing out reports. With $50 million in orders a day online, it kept getting more complex," says Venancio Figueroa, another Dell spokesman. The Web site gives all suppliers a common place to go to get the information they need, whether the factory to which they ship is in Ireland, Malaysia or the U.S., he says.

Intel - again the No. 1 company on the Interactive 500 - likewise automated exchanges with a key customer group, the motherboard makers in Taiwan, over the last year. In order to do so, the company had to work with the Internet service suppliers in Taiwan to upgrade their service. Now the motherboard manufacturers can get component specifications, submit orders and track order fulfillment online, which replaces 60,000 faxes that Intel formerly received each month from the manufacturers.

"Data is oxygen to all planning systems," says Colin Evans, Intels director of e-business strategy. Intel produces some 25,000 parts. Instead of sending its catalog once every 90 days to distributors, it now "introduces new products every day" and is better able to keep its manufacturing lines synchronized with customer orders, he says.

Intel also is an early implementor of an eXtensible Markup Language dialect for document exchange between electronic component manufacturers and device makers. It implemented XML-based supply chain messages with Compaq Computer in July based on a Partner Interface Process defined by the RosettaNet XML consortium. Intel has since implemented XML-based exchanges with Hitachi Japan, IBM and Pioneer Electronics.

Another top Interactive 500 high-tech company, National Semiconductor, attracts 2,000 visitors per day to its purchasing information Web site and refers them to its distributors or its own purchase site, according to Phil Gibson, director of interactive marketing at National. Instead of making "three or four phone calls or leaving voice-mail," customers learn about the latest products, what other components work with them and how much they cost, he says.

By being able to check a new parts compatibility with other parts, design engineers are taking "weeks and months out of the design process" for product prototypes, Gibson says.