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September 27, 1999

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Indeed, the Internet is at the heart of all Kimberly-Clark's IT initiatives. The Dallas paper company is using the Web to sharpen its focus on the consumer making the final purchase. Assink says the company's ability to provide information on personal products to consumers on the Web who can maintain anonymity has created great customer loyalty. Assink says the company has seen a significant return on the investment in a full array of Microsoft Internet and Web-server products, with gaps filled with E-commerce software from a variety of vendors.

Kimberly-Clark has improved internal processes using a standardized global network and a piecemeal implementation of an SAP R/3 system to improve its forecasting capabilities, improve logistical processes, and shorten the product cycles with distributors and direct sellers.

Yet the paper company says it's exercised caution in selecting when and where it uses the technology. "We don't automatically select technology for technology's sake," says Pat Clusman, senior research and planning consultant. "We have several R/3 components in place, but we're not doing an across-the-board replacement--only on a business-justified project basis."

Customer Outreach
The Timken Co., a bearings and high alloy steel products manufacturer, also recognizes the value of speaking to the ultimate purchaser of its products as well as the distributors. "Our big issue has been with how to get close to that end customer while still leveraging our existing distribution channels," says Cathy Crawford, director of corporate IS at Timken in Canton, Ohio. Crawford notes that customer self-service focused on order fulfillment--letting the end buyer track order status and delivery through an extranet--is helping the company make that connection.

Timken is also expanding its extranet capabilities. The company completed an eight-week rollout this summer of E-commerce technology and strategy, with the help of Cambridge Technology Partners, aimed at building a framework for the company's Internet practices so it can address the customer-relationship management and E-commerce needs of its customers globally. "We had a lot of point solutions but no corporate umbrella to weave it all together," Crawford says. The biggest challenge of that project, she says, has been tying in operations in the Pacific Rim, South America, and Europe, where customers have different needs.

While E-commerce is facilitating cost reductions and improved processes, it's also opening these specialized markets to a new breed of competition from sellers entering the business with radical new strategies such as mass procurement sites. "They're people who are interested in selling commodity products on the Internet--they don't care what," says Georgia-Pacific's Williams.

While a strong economy has pushed the building materials end of Georgia-Pacific toward record revenue, overcapacity in the paper products market is causing the commoditization that concerns Williams and that is forcing the market into consolidation. The company recently made some acquisitions, the largest of which was a $7 billion purchase of Unisource Corp., a paper distributor. Further consolidation is expected.

To accommodate those mergers, Georgia-Pacific has built a flexible IT infrastructure that's allowed the company to integrate the networks and infrastructure of acquired companies quickly. The efficiency of Georgia-Pacific's IT department in the integration of acquired companies plays an important role in the business side of the acquisition decision-making process. "We've built enough credibility [with our business partners] that we're called to the table early," Williams says.

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