Wireless at Celanese

The search for a competitive edge through logistics and the supply chain is also occurring among makers of commodities and raw materials, a world where price has long been the dominant factor. Germany’s Celanese AG sells a variety of chemical and acetate products for everything from paints to fashion apparel. It is deploying both wireless technology and a web portal to link its customers and sales force, according to Mary Haigis, managing partner of Durham, N.C.-based Clarkston Consulting. When completed, the project will allow both sides to view the movement of goods throughout the supply chain.In the first phase of the program, Celanese equipped its sales force with handheld personal data assistants (PDAs). Right away, they could quote prices and make sales on the basis of confirmed availability. The second phase involves creation of the portal, allowing customers to check on the status of an order in real time.With the help of Clarkston, Haigis says, Celanese has already managed to cut its customer-response time from eight hours to less than five minutes. That’s a valuable tool, in a business where prices and product availability can change at a moment’s notice.Haigis says Celanese was the first in its industry to adopt wireless technology for that purpose. Lack of real-time information, she says, “is a common problem in the chemicals market. This has given Celanese a head start.”Business is rife with examples of companies waking up to the competitive power of logistics and distribution. Roger Dik, a Boston-based partner with Accenture, cites Dell Computer as a pioneer of the build-to-order model, which is predicated on reliable logistics and supply-chain management. Among the more recent cases, he says:• Home Depot is selling a full range of products from General Electric Appliances, without carrying large amounts of stock. GE is responsible for actual distribution to the stores;• Following the failure of several “e-tailers” to sell toys over the internet, Toys ‘R’ Us has partnered with Amazon.com, using the latter’s extensive fulfillment capabilities to distribute web-purchased product;• Cemex S.A. de C.V., the Mexican cement producer, uses satellite technology to improve on deliveries to construction sites. According to Dik, customers are willing to pay a premium for this price-sensitive commodity, in exchange for tighter delivery windows;• Zara, the Spanish clothing retailer, has reduced to a matter of weeks the time it takes to get product designed, manufactured and on the shelves, in part because of a reliable logistics process. Zara lets stores capture on a daily basis exactly what’s moving in the pipeline.All of these examples stress the importance of speed, both in the movement of physical goods and the transmission of data. Equally important, says Dik, is collaboration, in light of the growing trend among manufacturers to outsource anything that isn’t viewed as a core competency. For many companies, logistics falls easily into that category.Dik says most businesses have a long way to go before engaging in the kind of collaboration that yields real benefits on the customer end of the supply chain. Lack of trust among partners, coupled with internally focused business processes, are major barriers.Still, given the continued narrowing of margins and increasing demands by customers, companies will be motivated to alter their view of logistics’ role in the organization. What was once a cost center has become an important tool for achieving internal efficiencies. Now, with managers having spent heavily on software systems for the enterprise, it might be time to look outward. “The easy stuff has been done already,” says Grenoble. “Companies are starting to address the hard stuff.”