Sept. 11, 2000

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Geon Leads Chemical Industry In E-Business Changes

By Rick Whiting

n the movie The Graduate, the lead character is given one word of advice about his future: plastics. It's not clear if anyone gave such advice to Ken Smith, CIO at Geon Co., a $1.3 billion manufacturer of chemical compounds for making plastics. But plastics have become Smith's present and future, and he speaks with as much authority about polyvinyl chloride, engineered films, and dispersion resin products as he does about IT. "You know those cheese-head things that Green Bay Packer fans wear? Those are made with our dispersion resins," he says.

Geon, in Avon Lake, Ohio, is on the leading edge of the changes sweeping the chemical industry and shifting the way these companies use IT. These changes can be seen in the way Geon is handling its merger with M.A. Hanna Co., aggressively pursuing E-commerce opportunities, and building a data warehouse of customer information,

Late last month, shareholders approved the merger of Geon with M.A. Hanna, a Cleveland manufacturer of chemical products for making plastics and rubber. The new company, PolyOne Corp., will be the industry's leading supplier of polymer chemicals. Smith, who will be PolyOne's CIO, is making plans to combine Geon's and M.A. Hanna's SAP R/3 systems--a task that he estimates will take a year and a half to two years.

PolyOne will be a $3.5 billion company, competing in an industry dominated by companies such as BASF, Dow Chemical, and DuPont. Its edge will come from E-commerce, Smith says. "We see E-commerce as an enabling technology that will level the playing field and will reward creativity and innovation, not merely size and scale," he says.

To that end, Geon has taken a number of steps. Under its Geon business-to-business plan, the company used WebMethods Inc.'s Extensible Markup Language technology to establish Internet links between its enterprise resource planning systems and the ERP systems of its six largest suppliers, from whom it buys 80% of its raw materials. Geon plans to extend that concept to the company's largest customers sometime soon.

Customers have the option of going to the GetGeon Web site--which Geon launched in February and integrated with its ERP system--to place orders, check order status, and review invoice data. Smith says the site makes Geon a more reliable and more cost-effective supplier. Already Geon has done $10 million in business through the Web site.

"Geon is widely regarded as one of the most advanced chemical companies in terms of E-business," says George Young, a process industries senior manager at consulting firm Deloitte & Touche.

The chemical manufacturer is also moving into online marketplaces. It's a member of ChemConnect Inc.'s World Chemical Exchange and recently completed a pilot project to link its ERP system with the exchange. But Smith acknowledges that sales through the exchange remain a tiny piece of Geon's total business. PolyOne executives will decide by year's end whether to join other online trading hubs, Smith says, including the Elemica exchange that BASF, Dow Chemical, DuPont, and others unveiled in May, and the Envera electronic chemical and petroleum exchange.

Geon's innovative use of IT isn't restricted to supply chains and exchanges. The company has assembled a data warehouse with information about what products customers have purchased, when, in what volumes, and at what prices. The system helps Geon forecast demand and anticipate customer needs, Smith says. "It allows us to have a more meaningful relationship with our customers and provide them with total solutions, not just sell them products."

Return to main story, "Efficiency Is New Byword"

Illustration by Jeffrey Fisher

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