SKF challenges the e-business model

SKF is pioneering a new e-business initiative that seeks to integrate all of the goals the company has set itself in terms of product support, provision of know how and reduced procurement costs.

As a global manufacturer and the world's leading producer of rolling bearings one might expect SKF to have a responsible attitude to its marketplace.

However, the lengths to which the company is going in challenging conventional business models is extraordinary.

Adopting a holistic approach to its business, SKF has put into place a number of initiatives that on the face of it, quite frankly, belie what might be assumed to be in the company's best interest.

For example, in recent years there has been a huge investment in raising the awareness in industry as to why bearings fail and how to prevent that happening - surely one might reason, SKF would be happy to continue to supply more bearings.

The development of Integrated Maintenance Solutions (IMS), the launch of several new condition monitoring systems and new maintenance products is one manifestation of the SKF philosophy.

Couple that with massive investment in the research and development of new lubricants, a lubricant analysis service, new training modules and the provision of ever improving technical data and knowledge bases are all testimony to SKF's commitment to partnering its customers.

In short, SKF has recognized the role it can take in assisting designers and plant engineers to make the absolute best use of the high quality product it makes.

This year, the company has attacked the traditional procurement model.

Typically the price of a product is a small part of the overall cost of its procurement.

Consider, for example the process of buying a bearing.

First the product has to be located and its specification checked for suitability for the given application.

Then the product has to be ordered - some estimates reckon raising paperwork for an order and processing it costs about £70.00 on average - the order must be checked and possibly chased.

Goods must be checked on receipt and at every stage various paperwork must be reconciled.

This excludes the considerable costs associated with unplanned downtime.

E-commerce through the internet has been presented as a panacea for reducing procurement costs.

But, when the issue is properly considered, the only true reduction in time is made through access to the information.

On line ordering actually does little to reduce paper trails.

Many e-commerce websites do little to assist in the location and validation of a product's suitability for its purpose - for that, at least in most engineering scenarios, a greater knowledge resource is usually required.

What SKF is pioneering this year is a new e-business initiative that seeks to integrate all of the goals the company has set itself in terms of product support, provision of know how and reduced procurement costs.

In essence, the company is establishing an e-business ecosystem that is sustainable and delivers tangible benefits to all in the supply chain - the manufacturer, distributor and end user.

The initiative is called "endorsia.com".

SKF has a long history of electronic trading.

As a global manufacturer with an immense number of products and millions of users, the company has been aware since the 1980s of its need to streamline the procurement process.

Two decades ago SKF had established electronic links with key customers.

By 1995, the company was producing data on CD ROM.

It is natural therefore that the company would be likely to extend e-business beyond the web.

Endorsia.com is all about boosting efficiency.

Manufacturers, distributors and end users all benefit from a streamlined system for buying and selling.

Customers can select products, place orders and check order status via the system anytime.

But, endorsia.com is much more than an on-line catalogue.

The system is able to extend into the buyer's, seller's and distributor's own systems to reduce the costs of buying and selling.

Indeed, if endorsia.com is fully implemented, it has been estimated savings as high as 90% can be achieved compared with paper based methods.

Coupled with this is a comprehensive data bank of technical information about products - direct, manufacturer endorsed know-how.

Moreover, endorsia.com presents all technical information in the same format and using the same navigation tools - ensuring information required is available and that it can be found immediately.

Endorsia.com has been pioneered by SKF, but the facilities of the system enable other quality branded industrial products to be added to the trading community.

It is anticipated that in time, a buyer could have most, if not all, of its major suppliers available within the endorsia.com system.

So much for the system and its benefits, but how does it work? Essentially, the system uses a global private network that overlays the public internet.

This ensures high speed connectivity, security and ensured, fault-tolerant, reliability.

The system is powered by MRO.COM which is a leading supplier of e-commerce solutions and a subsidiary of PSDI, the company responsible for the origination of MAXIMO - the widely used maintenance, repair and operation software.

To support the supplier's trading activities, endorsia.com has two key areas of functionality - the catalogue (which includes seamless access to the detailed knowledge base) and the transaction server.

The system can be used in real time or for batch order processing - subject to availability, for example, SKF offers 24 hours real time access to SKF and all other supplier information and knowhow during the main operating periods.

There is an equivalent part number search facility to allow access to alternative parts data.

Orders are captured in the supplier's business systems allowing automated order processing.

In SKF's case, the company responds to order status requests in real time - removing the need to handle specific order enquiries manually.

The catalogue is a comprehensive access point for detailed product information, but also for manufacturers' know how.

For instance, SKF products can be searched for by part number, descriptive keywords or attributes such as dimensions.

Drill downs are logically organized so that for example, "ball bearings" drills down into specific types such as "deep groove" and even down further into say, "with seals".

Differentiating attributes have also been accounted for such as dimensions, weight, internal clearance, grease type and cage type.

There are lists of alternatives (equivalent part numbers), which can also be searched by the user.

In short, it is very easy to locate and then buy exactly what is required.

An additional facet of the system is the ability to access data such as how to fit spherical roller bearings and so forth.

SKF sees the advantages of the endorsia.com system as coming as much from the availability of its high quality knowledge base as from its simplified and integrated procurement process.

Design engineers need detailed information when considering bearing selection, but so too does the maintenance engineer faced with a bearing problem during weekend downtime.

Apart from its comprehensive technical information, installation advice and troubleshooting tips for its product portfolio, SKF will also present information about its planned maintenance strategies, IMS and condition monitoring products and services.

Training courses are described in detail, as are analytical services for lubricants.

Because endorsia.com is a live community, new and updated information will be added as a vigorous on-going process.

Indeed, as new products and services are developed, they will become immediately available to all connected parties - end users and distributors alike - via the one central catalogue maintained within endorsia.com.

Endorsia.com is an open trading community.

Suppliers can be added to the endorsia.com system to suit end users or distributors.

Clearly, the quality of the information base is reflected in the quality of the companies selected by any given user of the system, but with the assumption that reputable manufacturers and suppliers are selected, there is a further benefit from the endorsia.com system.

Because the manufacturer maintains the information, the distributor has no need to be concerned with supplying continually changing data.

Similarly, the manufacturer or supplier knows that the latest, most accurate information is available to its distributors and customers.

With quality businesses within the endorsia.com trading community, the system truly represents the future of e-business and a rich seam of knowledge.

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