September 13, 1999

Timken: A Big Step For An Old-Line Industry

By Clinton Wilder

o, the fax machine wasn't broken. But it seemed that way to some people at a Timken Corp. steel service center in Chicago after the April launch of the Timken Direct extranet to take customer queries and orders online. They even called a technician to fix it. The fax was fine--it had just been put into semiretirement by a better way of doing business.

Timken executives admit a customer extranet isn't the most radical example of transformation in the E-business world. But it's a big step for the leader of an old-line industry.

The Canton, Ohio, company is the world's largest producer of tapered roller bearings, a product used in everything from automobile transmissions to paper mills. Timken is 100 years old this year "and we had some pretty traditional ways of doing business," says Gus Kontonickas, VP of sales and marketing for Timken's industrial distribution group, which is the company's $1.7 billion bearings business. "But things were changing in our business: globalization, consolidation, an emphasis on one-stop shopping, and comprehensive contracts. We had to be more customer- and distributor-friendly."

Timken sells mostly to distributors, and for years has used electronic data interchange networks from General Electric Information Services and TransNet to exchange purchase orders and invoices. But to transform the sales and service process, Timken developed Timken Direct to move customer queries online--and to change customer relationships.

"We always believed in customer-relationship management, even before there were specific technologies for it," says Kontonickas. "But most of our sales associates had to go around with four-wheel suitcases to carry all the information."

Not any more. After five months, 40% of Timken's 120 North American distributors use Timken Direct. With links to Timken's back-end inventory databases, the secure Web site handles two customer concerns that occupied 60% of service reps' time: availability and price. Timken has redeployed 15% of its service reps to sales, where they make proactive sales calls instead of fielding rote queries.

"This isn't a head-count reduction exercise," says Graham Allen, manager of E-commerce for the bearings business. "It's making sure people are working on things that add value. Our distributors like being able to serve themselves."

E-business has driven a much closer IT-business relationship at Timken. Allen has five years in sales and marketing at the company and two in IT. "Now we have an IT representative at our weekly business update meetings," he says. "That would never have happened two years ago. We would have come out of the meeting and handed IT a list of projects to work on."

Return to main story, "E-Transformation."

Illustration by Matsu

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