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Electronic Business in Metal Processing

Prof. Eleanor Loiacono, Prof. Chickery Kasouf

Given the sudden surge of interest in electronic business in the supply chain, the PMRC worked with MPIF to conduct an initial study of the current level of e-business activity in 2000. This followed the dedication of a full day to e-business topics at the 2000 PMPA Business Meeting. Moreover, recalling that information technology was the skill area expected to increase the most in importance over the next five years, it was critical for us to assess the early applications of Internet technology. This was followed by two more papers. First, considering the wide range of potential e-business applications in the supply chain, we developed a conceptual model to classify buying decisions and potential benefits for the customer, extending work on consumer involvement and risk to the industrial buying decision. Second, we assessed web site quality in metal processing firms using a well-validated scale developed for business to consumer sites.

Key results from these projects include:

• While 92% of P/M firms reported having a web site, 86% of companies had no link with internal systems. The most frequent use of web sites was promotion, and less than 1% of usage involved transactions.
• The most important e-business application was email, followed by EDI. Web based quotes, auctions, and transactions were considered unimportant and document sharing was not an especially important use of the web.
• The applications with the greatest expected future importance in 2 years were email, customer service, researching new applications, promotion, and scheduling. Online quotes were expected to increase in importance (but not auctions).
• Not counting electronic data interchange (EDI), a mean of 2.67% of current sales and 6.1% of current purchases were electronic. This was expected to increase to 19.1% and 24.5% in two years.
• The greatest expected benefits of e-business were to improve ability to serve customers, more timely customer contact, faster responsiveness, and facilitation of global sales
• P/M respondents lacked confidence in e-business standards and were concerned that customers did not understand e-business requirements. However, they did not think that current business could be lost if e-business practices were not implemented.

This project resulted in three papers:

• Hunter, Lisa M., Chickery J. Kasouf, and Kathryn Curry (2000), "Electronic Commerce in the P/M Industry: Current Status and Future Challenges," prepared in conjunction with the Metal Powder Industries Federation.
• Hunter, Lisa M., Chickery J. Kasouf, Kevin G. Celuch, and Kathryn Curry (2001) "A Classification of Business-to-Business Buying Decisions: Risk Importance and Probability as a Framework for E-Business Benefits", currently under review by Industrial Marketing Management.
• Loiacono, Eleanor (2002), "MPI/WPI Web Site Study Summary WebQual- Report."

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Last modified: October 23, 2007 08:49:50