GE unit goes it alone

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Gerry Podesta, a 17-year veteran of General Electric, didn't know what he was getting into last year when he transferred from a job running GE Plastics' Singapore operations to head up the unit's new e-commerce business. A thousand registered customers and 150 employees later, Podesta has helped establish a solid e-commerce foundation for the unit's future.

Podesta, 40, has been a driving force behind GE Polymerland. Today, more than 30 companies, including a few direct competitors of GE Plastics, sell products through the site.

And while other plastics companies are lining up to form a collaborative exchange, GE Plastics plans to go it alone. No wonder. GE Polymerland this year is expected to exceed $750 million and may reach $1 billion in sales, or about one-seventh of GE Plastics' overall revenue.

Late last month, Podesta shared his views on the future of trading exchanges, search engines and cutting-edge Internet marketing techniques.

Q: Will GE Plastics ever join or form an e-marketplace with other plastic suppliers?

A: As of right now, we have no expectations to join an e-marketplace with any other suppliers. In fact, we consider Polymerland to be an e-marketplace today. We feel comfortable with our current model.

Q: Why not join another exchange?

A: We feel strongly about [anyone] being between us and our customer. We feel there is no benefit to put third-party people between us. Also, in order to do the fulfillment piece [of trading], we have to be in control.

Q: What is the future of PlasticsNet and other independent e-marketplaces?

A: The challenge remains brand and fulfillment. If they can accomplish those things, where they have products to sell and wonderful service, they'll be successful.

Q: Could it be argued that GE is being shortsighted by rejecting e-marketplaces, and risks missing out on a huge windfall of new customers?

A: That's a good question. The most interesting part of my job during the dot-com craze and the marketplace craze is to question whether our strategy is the right one or not. In the last 30 days, I feel better about it than I ever had. Our current strategy of brand and fulfillment, and our product going through one channel, is the most solid model. And frankly, we can probably be part of an exchange if we want at any point in time anyway.

Q: Distributors on factory floors provide a lot of services. In fact, there's usually a representative there to fix something if it breaks. Is there something about that expertise being missed in these dialogs about trading on the factory floor?

A: Sure. If you are a pure dot-com, you have never had that infrastructure. You are missing a valuable piece in the connection to the customer. Company history, culture, application support and assistance give the existing companies competitive advantage. That said, we also think most of that technical support can eventually be done online.

Q: You have chat on Polymerland. Isn't it a double-edged sword when it comes to selling complex products online?

A: We have a click chat. It is there in case you have a problem.

We don't encourage it as a normal course of action. If it eventually goes away, that'd be fine. But wherever we put the button we have a specialist in that area [who is automatically linked over] the phone. Also, we answer the majority of the questions by also pushing a Web page to the customer's computer. On the non-transaction side, we have 15 people standing by to answer questions. On the transaction side, we have 80 customer-service representatives who take orders on the Internet or the phone.

Q: If you are a supplier to GE Plastics, hankering to do more businesses with GE Plastics, what can the marketing department do to get more business from your company?

A: Our common stand is that we are looking for value-added services. If you really want to do customer acquisition for a technical product, you can't do it through e-mail or advertising. You have to offer design and engineering services. It is quite a challenge.

Q: Have any of your suppliers come up with Internet technologies that have really impressed you, and positioned them to win more business?

A: I'd say no, to be honest with you. We're bringing almost every supplier along with us. Some will step up, but in most cases everyone is feeling their way through on this thing.

Q: So you aren't seeing suppliers saying they'll provide real-time inventory, or normalizing their product numbers with your product numbers?

A: No one has been proactive with us in almost any of those areas. Again, we're buying raw chemicals, feed stocks and miscellaneous small items. But I'd say we are definitely leading this thing with our suppliers. Without prodding, they would be going at their own pace.

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