27 October, 2003
© Beep Knowledge System and case owners, 2002-2003
Digital SMEs Cases
Executive
summary of the case:
Timing of case
Started 1997 and ongoing
Geographic setting
Ipswich, U.K.
Type and use of ICT
Website www.timberweb.com
Main contributors
Timberweb's management.
Main beneficiaries
Market intermediation companies aiming at global presence.
Background
TimberWeb was created by Ipswich-based timber trading company KDM International
PLC. TimberWeb enables timber traders to buy and sell timber and forestry
products online.
KDM International invested in IT since its inception and recognised that the Internet could pose a threat to intermediaries in a lot of businesses, including the timber industry. KDM had to make a shift in the way that it worked or risk gradually going out of business.
Objectives
To provide an online marketplace where people involved in the timber industry
could advertise their services and trade products.
Resources (apart from ICT)
TimberWeb internal resources.
Activities
After recruiting web programmers and designers, the company produced a
timber and forestry e-market.
TimberWeb have developed a multinational sales force, provided a choice
of 14 languages on the web site and engaged with its users (and potential
users) by providing market research and on-line conferences.
Outputs and results
The TimberWeb site offers information on timber and forestry, has more
than 5,500 timber industry web links and gives free access to a database
of over 212,000 timber related businesses.
The e-trading platform allows buyers to put in requests for quotes from sellers and then evaluate the offers and set time frames. All users of the marketplace are verified and established timber companies, and a legally binding e-contract has been developed to enable traders to conclude deals through the site.
The site also offers in-depth news coverage from Reuters and members can advertise job vacancies free of charge.
In September 2000, TIMBERWeb de-merged from KDM International PLC, and is now a company in its own right.
Lessons and conclusions
Although originated in Ipswich, U.K., through e-trading the business has
become international with more than half of its trading members overseas
– over 1300 members across 70 countries. This proportion is expected
to rise rapidly as further international growth is developed and opportunities
are taken to embed the service in processes for Supply Chain Management.
There has also been rapid growth in North America, Africa, Eastern Europe
and Scandinavia. The service now maintains over 900 stock lists, 16000
trade messages and details of over 17,000 sawmills.
Case
description:
Background
TimberWeb is a business-to-business (B2B) e-Market
for timber and forest products industries that facilitates the trading
relationship between buyers and sellers. Their customers are buyers and
sellers of timber of different species, grades and quantities, who vary
from small sawmills to multi-million dollar turnover manufacturers. Launched
in 1997 by KDM International plc, TimberWeb enables buyers and sellers
to benefit from a broader customer reach and up-to-date market information.
The TimberWeb site is navigable in many languages, including several European languages, Japanese, and Chinese. Besides the online trading area, the site has other features, such as a contacts database, a message board, a newsdesk and stocklists.
Map of Ipswich
Objectives
TIMBERWeb wanted to create a trading platform that would provide timber
buyers, varying from multi-million dollar turnover manufacturers to SMEs,
with competitive offers from timber sellers existing primarily in the
key market sectors of Europe, North America, Asia and Africa.
Resources
TimberWeb internal resources. Website www.timberweb.com
Activities
A website was launched that featured a timber and forestry e-market, along
with information and conferencing services. The platform needed to incorporate
"timber knowledge" to order wood accurately. It needed to "understand"
how buying specifications varied in different countries and how size and
grade related to different origins and species groups. TIMBERWeb's management
has 25 years experience of the timber industry and ensured the online
marketplace would be of practical use to traders.
With the prospect of a number of users from different countries, the website was designed to appeal globally and be easy to use without compromising the detailed functionality required to complete an entire transaction online.
Buyers and sellers are provided with a simple self-registration process, to help ensure they are bona fide timber traders. The buyer is then able to specify in detail his/her order based on grade, size, origin, species group, payment method, shipment date and all other factors required to buy timber.
Buyers are able to submit RFQs (requests for quotes) and to select the suppliers from whom they wish to receive a quotation for timber. The sellers offering quotations are informed of the position of their quote in the market, dependent on price, without the identity of other participants being involved. The process of creating and submitting RFQs, controlling the duration of the bidding and creating contracts with one or more suppliers is designed to be as simple as possible, and intuitive, without compromising on the detail needed to meet the requirements of timber buyers and sellers.
Output and Results
The TIMBERWeb site offers information on timber and forestry, more than
5,500 timber industry web links and free access to a database of over
212,000 timber related businesses. Through e-trading the business has
become international with more than half of its trading members overseas
– over 1300 members across 70 countries.
There has also been rapid growth in North America, Africa, Eastern Europe
and Scandinavia. The service now maintains over 900 stock lists, 16000
trade messages and details of over 17,000 sawmills.
The site also offers in-depth news coverage from Reuters and members can advertise job vacancies free of charge.
Lessons and conclusions
With a traditional approach to trading, comparing offerings across suppliers
requires multiple phone calls to various suppliers or enlisting the costly
support of a broker. E-commerce replaces point-to-point connections between
partners, and provides an online venue that can enable multiple buyers
and sellers to conduct dynamic, many to many commerce.
Trading via a website opens up potential access to markets worldwide,
breaking down traditional barriers of time zones and instinctive boundaries
of customer reach. However, the issue of trust is important, and a comprehensive
knowledge of the product domain is required in order to gain customer
confidence. Without this, even if the product offering is large, the payment
methods secure and purchasing agents are able to gain instant access to
comparisons of the information they need, the website alone will not provide
what the experts in a given area require.