Lubrication Engineering, An Official Journal of the
Society of Tribologists and Lubrication Engineers,
August 2002 (Volume 58, No. 8)
Far from a fad
Lubricants industry finds powerful friend
By Kimberly Phelan
Internet hype of the mid-to-late '90s has taken a deep breath, smoothed its proverbial tie, combed its coif and entered the next evolutionary level of sensible functionality for the lubricants industry. Everyday Web-based tools now enormously enhance information and research collecting for chemical professionals, as well as enable e-commerce and electronic data interfacing (EDI) among lubricants buyers and sellers.
Yet the increasing prevalence of the Internet and the growth still to come are far from tame. There is a consensus among Internet experts that what we see happening today is just the beginning of a tidal wave of technological advances.
But that's OK with lubrication engineers and tribologists, who, for the most part, have enthusiastically embraced the Internet and how it facilitates their work Scientific minds tend to receive technological advancement eagerly anyways, say industry observers.
How others in the corporate and industrial segments of lubricants feel about Web tools, however, varies widely. Jack Tooke, director of marketing for The Tak Group, a multifaceted information technology development firm based in Hudson, Ohio, sees a range of attitudes among the three segments of manufacturers, distributors and end-users. Oil companies, which are naturally high on the money chain, so to speak, and have more resources at their disposal, lead the way in grasping the potentials for efficiency that the Internet offers, according to Tooke. Industrial end-users probably come next in line when it comes to Web enthusiasm. As purchasers of many commodity items, customers appreciate the many cost-savings to be had through e-commerce transactions—in some cases end-users now tell distributors they won't do business with them if EDI, or system to system Web-based connectivity is not available.
Petroleum distributors tend to base their preference for all things cyber on whether or not their customers want to go that route, Tooke says. This group may be the least eager to self-initiate Internet technology internally, he believes, and are more likely to adopt it when their suppliers or customers are nudging in that direction.
Part of distributor reluctance to electronically unveil customer information to suppliers' computer systems stems from the protective feeling distributors have about their accounts, and the natural desire to remain integral in the market chain. According to consultant Tom Glenn, president of PetroTrends International, Metuchen, N.J., distributors do recognize that there are reduced costs and increased efficiencies to be gained by sharing customer details, but it's a tough and slow process for distributors to get comfortable with.
"What e-commerce [pioneers] underestimated was that technology may change quickly, but people don't," says Glenn. "Seventy percent of the lubricants sold in this industry are handled through a distributor—they are key; and they have a vested interest in protecting their customers' information. There is gradual acceptance [of EDI technology] but you can't rush distributors into this."
The myriad dot-coms that have come and gone in the lubricants industry apparently missed this concept. Fashioning business models that zipped the traditional distribution process out of the picture may have contributed to many a dot-com downfall. Another fatal faux pas was a lack of industry understanding, according to Doug Mort, manager of information technology at R.T. Vanderbilt, Norwalk, Conn., a chemical manufacturer whose diverse product offerings include lubricant additives for lubricating oils and greases. Dot-coms, companies that rose up to distribute lubricants and additives purely through Web transactions, have struggled despite their ingenious software engineering ideas, Mort believes, because they frequently left out the most important ingredient.
"If you don't understand how this business works, it's an almost insurmountable challenge," he says. "This isn't like buying hats from LL Bean—it's like, well, buying chemicals. Suppliers and customers work together over time to put together formulations. The [lubricants] selling process is much different than for other industries."
In some respects, those bad business models caused some in the industry to become jaded toward the Internet, according to Terrence O'Hanlon, founder and president of Reliabilityweb.com, an information-rich, online magazine for industrial machine reliability maintenance professionals. But, O'Hanlon says, confidence in using the Web, both as an information treasure chest and as a platform for e-commerce and supply chain connection, has more than made a come-back.
Like two mighty cyber-rivers, both possessing great depth of potential, the information side and the e-business functions of Web technology are forces, not fads, that have already altered the landscape of the lubricants industry.
THE GREAT KNOWLEDGE GIVE-AWAY
The real power of the Internet, O'Hanlon believes, is the universal accessibility, or "democratization" of information to everybody who wants it, "from South Africa to Belgium to Singapore to Indiana, all at the same time," he says. And it is valuable technical and application information, freely given, with no strings attached, that can truly distinguish one manufacturer's Web site today from the others.
Use the Web as much more than a place to catalog products, he suggests; yes, you can publish standards such as those from the American Society for Testing Materials (ASTM) and the American Society for Nondestructive Testing (ASNT), or MSDS information, but there's still much more value that manufacturers can offer. Provide answers to questions like: 'What works better for what application?' 'How do I apply [this product]?' 'What are the things I need to watch out for?' 'How do I design my system and can you help me with that?' 'What advice can you give me?'
"What [manufacturers] really could be doing is telling all their secrets that they're hiding from their competitors but that their competitors already know," says O'Hanlon. "This is real value added."
Glenn at PetroTrends adds that by the time you view all the individual "cards" that manufacturers play on the Internet, you can pretty much see the whole deck. "So why not give your Web viewers as much information as possible?" O'Hanlon reasons. Glenn, on the other hand, thinks maybe there's too great a surplus of free information swimming out there and that manufacturers may eventually pull back on how much knowledge they're willing to give away to non-customers.
Nevertheless, offering free information does attract attention, and becoming a reliable source of updated technical information to lubrication chemists and engineers is an effective means for creating customer value, and perhaps even creating customers.
A prototype of that premise is R.T. Vanderbilt's Web site, which was designed in-house with twin objectives: (1.) to serve the industry with continuously updated and relevant technical literature as well as (2.) to provide online ordering and customer account histories. So great is the company's emphasis on providing high quality information that IT manager Mort believes Vanderbilt's is one of the primary sites that engineers and research chemists regularly visit to gather current knowledge. Knowledge seekers are offered an array of technical papers, articles, press releases, and other documents that help explain product usage and solve problems.
"Some of the feedback we've received has been from educators," says Mort. "They're sending their students to our Web site to learn about various technologies. And everyone who comes to our site will always get the latest information."
Collecting customer and user feedback about its Web site has been a key element from the beginning, roughly three or four years ago, when Vanderbilt programmers began designing and test-running portions of the site. Rather than introducing the entire Web package in one heaping plateful, the company chose to implement its online offerings in small bites, gather customer Journal of the Society of Tribologists and Lubrication Engineers 15 input, then respond with more bites accordingly. The philosophy, Mort says, has always been to listen carefully to what customers are calling for, and heed their advice. "We're successful," he says, "because we listen." Listening and responding to customer needs is also the essence of successful e-commerce services. "Customercentric" is what O'Hanlon calls the notion of revolving the whole thing around the site's users—designing Web tools and services to be extremely easy, with transparent pricing and one-click buying simplicity. Basically, says, O'Hanlon, if a company uses Amazon.com as the benchmark, they can't go wrong.
LINKING THE ELECTRONIC SUPPLY CHAIN
Electronic data interfacing is the wave of the future; tidal wave that is. Internet experts predict that system to system automatic communication between end-users, distributors, manufacturers and even further downstream to petroleum disposal firms and recyclers will gain momentum within the next two to three years, and become commonplace within five.
"Companies that will spring to dominance are the ones that adopt Web-based supply chain management early," O'Hanlon forecasts. "The ones that don't are in trouble, they are doomed."
Picture the not-so-sci-fi scenario O'Hanlon describes: "Say there's a factory in Idaho that has a lubrication system and the bearing will have a sensor built into it, and that sensor will say, 'I'm running low on oil.' That sensor will be connected to a system that notifies the distributor that supplies that plant with oil; the distributor's computer will go and check the inventory of its customer to see if it has enough oil to refill that lubrication pool—if it doesn't, it will automatically place it on order. No purchase order has to be issued by a person; it will be automatically delivered.
The message will simultaneously go to its own warehouse and find out that it's out of stock, and that distributor computer will go check with the refinery to find out when the next batch is coming off the refining line—the distributor's system tells the refinery to deliver 100 gallons to the distributor. The refinery computer goes back to the pumper's computer to indicate a need for more oil. All this will happen automatically," O'Hanlon says.
"The steps to make this happen are all known now, but there's a lot of friction in the delivery of all that information," he says. "Nobody's tied together; there are all different computerized systems. But the Internet will soon allow everybody to inexpensively tie all that information together."
Will it be do or die when it comes to lubrication companies getting on board with EDI technology? Will the pressure to become electronically linked in the supply chain ultimately weed out those who resist? O'Hanlon and Glenn would have to say yes, that is a probability, though Glenn adds that this will be a slow evolutionary rather than revolutionary event. Mort at Vanderbilt suggests that while less techno-savvy companies may face Tier 2 or Tier 3 reclassification, there will still be room for choice about Internet integration.
BACK FROM THE FUTURE
Right now system to system interfacing is, of course, a reality. Completely paperless purchases are achieved as customers place online orders that are transmitted to distributors' back office systems, which, in turn, update inventories and send electronic invoices—customers can then make electronic payments directly into distributors' banks, leaving nary a trace of paper between parties.
While some lubricants companies chose to design and implement Web service in house as Vanderbilt did, others opt for assistance from application service providers (ASPs). The Tak Group is one such service, and offers two primary products to the petroleum industry. The first is Tak Link, a distributor Web site application that provides totally branded e-commerce capabilities, much like the paperless transaction just described, but handled by the ASP to whatever extent the distributor chooses.
The Tak Group's other primary product offering to the industry is Tak Lab, a totally laboratory-independent e-business program for lab services. Considering that perhaps as much as 70 percent of lubricant engineers' and tribologists' use of the Internet is related to oil analysis and the resulting data, according to Jack Tooke, then Tak Lab is a significant technology indeed.
What it boils down to is that end-users can view their oil analysis results online, manipulate that data, perform graphical trend analyses and summary reports. They can order testing supplies as well as transmit their test results via email to other parties. But the results are also accessible to distributors and oil companies, keeping them, respectively, in the loop of the customer's maintenance program and on top of the performance of the lubricants they make and sell.
According to O'Hanlon, Web-based oil analysis systems in general have advanced to the point where customers can view analysis results in real time, simultaneously seeing what the lab technician is seeing. "You can even have them buzz your pager to go log on when it's time see the results," he says. It's practicality that practically everyone uses. O'Hanlon says there will be a whole lot more of that to come.
"The Internet will have an amazing impact," he says, "to the point that it will be invisible and we won't even think about it."
Lubrication Engineering, An Official Journal of the Society of Tribologists and Lubrication Engineers, www.stle.org
August 2002 (Volume 58, No. 8)
Kim Phelan is a free-lance reporter based in Lombard, Ill. Reach her by email at firstname.lastname@example.org.
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