OpportunitiesforActioninIndustrialGoodsSupplyChainStrategiesfortheInternetEraSupplyChainStrategiesfortheInternetEraBusiness-to-businesse-commerce,Internetexchanges,e-supply-chainmanagement:greatclaimshavebeenmadeabouttheInternet’sabilitytorevolutionizesup-plychains.NowthattheInternethypeisabating,allowingrealitytosetin,whatisactuallyhappening?HowmuchvalueistheInternetcreating,ifany?Andhowcanyourbusinessbenefit?Manycompaniesarehopingforsignificantresults.WhenTheBostonConsultingGrouprecentlysur-veyed250supply-chainexecutivesandgeneralman-agersatmajorU.S.corporations,morethanhalftherespondentsreportedthattheyseetheInternetasawayto“greatlyimprove”theirsupply-chainperfor-mance.Onaverage,theyexpecttocutunitcostsby3percentperyearwhileenhancingrevenuesby5percent.Moreover,theyanticipateachievingsimilarimprovementsannuallyoverseveralyears.Infact,anumberofcompaniesarealreadyrealizinggainsofthismagnitude.SomeBCGclientsareengagedininitiativesthatareyieldingbenefitsequalto5to10percentoftotalsales,withfurthergainsstillavailable.However,mostcompanieshaveseenonlylimitedbenefitsatbest—andinmanycases,thesebenefitswilloffernocompetitiveadvantage.ToomanycompaniesareusingtheInternetjusttomakesimpleenhancementstotheirsupplychains.Forexample,theyarereducingmaterialscoststhroughonlineprocurementandstreamliningcustomerser-vicedepartmentsthroughonlineordering.Althoughthesechangesdogenerallylowercostsandpleasecus-tomers,competitorscanquicklyreplicatethem.Othercompanies,hopingformorelastingresults,aremakingadifferentkindofmistake:theyarepilingoneInternetprojectontopofanotheruntiltheyfindthemselveswrestlingwithanunmanageablerangeofinitiatives.Manyoftheseprojectswillnotyieldbenefitscommensuratewiththeinvestmentsthatfundthem.Thereisabetterway.BCGhasidentifiedasetofpio-neeringcompaniesthatareusingselectedInternetstrategiestorebuildtheirsupplychainsandcreatedurablecompetitiveadvantage.Manyofthesecompa-nieshaveachievedinventoryturnsthataretwotothreetimesthesurveyaverage.Theyexpecttorealizemore...
