That is one finding of a major new study that assesses both the Internet's current use and its eventual impact on business across several plastics industry sectors.
Compared with the 80% of Fortune 500 companies that reported having Internet sites by the end of 1996, just 42% of North American plastics companies now have such sites, the study revealed.
At the low end, 37% of plastics processors said they have Web sites, compared with a high of 58% of resin suppliers. The availability of corporate e-mail ranges from 49% for processors to 76% for end-users.
No great resistance
Despite the slow penetration of Internet usage in the plastics industry, there does not appear to be a great deal of lingering resistance. Indeed, plans among non-Internet users to use the Internet during the next 12 months are greatest within the segments that currently have the lowest penetration.
Overall, 28% of companies without an online presence expect to have their own Internet site within six months, the research showed.
The study, spearheaded by marketing and communications agency USA Chicago, was sponsored jointly by Morristown, N.J.-based nylon resins producer AlliedSignal Plastics; the Washington-based Society of the Plastics Industry trade association; and Plastics News, an Akron, Ohio, sister publication of Business Marketing. DePaul University in Chicago conducted the study.
"We know the Internet's impact is far-reaching" said USA Chicago President Patrick Yanahan. "We conducted this study to pinpoint exactly where the plastics industry and its segments stand in terms of capturing the advantages the Internet offers."
DePaul mailed four slightly different versions of the 10- to 12-page survey in mid-March to nearly 10,000 plastics processors, resin makers and distributors, machinery manufacturers and plastics product end-users in the United States and Canada, using Plastics News' subscriber list. The survey was completed and returned by 1,283 people, or 12.9%, by the end of April.
Other key findings include:
Despite most users believing Internet usage enhances business efficiencyÅ"and that virtually no user believes the Internet detracts from business efficiencyÅ"neither the Internet nor e-mail is widely used within the plastics industry. The reason given most often (44%) is the company doesn't provide access.
The telephone, face-to-face meetings and traditional and express mail remain the dominant forms of communication. Overall, about 12% of respondents said they "do not see a use" for the Internet.
Of the 161 respondents within the resin supplier segment, only 16.8% use the Internet to communicate with plastics end-users, processors or machinery manufacturers. Internet users tend to be larger companies, and nearly half claim major sales to the automotive industry.
Most suppliers who communicate with end-users (69%) and processors (53%) say it enhances efficiency.
A majority of resin suppliers who use the Internet (52%) believe it will alter the types of services provided by resin distributors and sales agents. Specifically, nearly 30% believe it will enhance the role of such companies in the marketplace, 18.5% believe it will diminish their roles, and less than 4% expect the technology to eliminate the need for such companies.
There doesn't seem to be a negative bias toward the Internet, but management, perhaps fearing loss of productivity, is not supporting it as much as it could, according to USA Chicago.
Mirroring the other industry segments, non-users are becoming more receptive, and 30% of the respondents say they are extremely likely to use the Internet to communicate with other plastics industry companies in the next 12 months. More than 55% say they are extremely or somewhat likely to do so.
Although processors communicate via Internet with their end-user customers much more frequently than the other industry segments, the Internet remains infrequently used. Among processors, it approached only the popularity of seminars as a communications medium, well behind the telephone, face-to-face meetings and regular mail.
Of the 610 processor respondents who do not use the Internet, nearly half (47.5%) said their company does not offer Internet access, while 22.8% either see little use for it or believe security to be a problem.
More than 43% of non-users say they either are extremely or somewhat likely to use the Internet to communicate with other industry companies in the next 12 months.
Most plastics processors using the Internet believe the new medium will increase interaction between the various plastics industry segments and more than 52% believe it will change the types of services provided by their distributors and sales agents.
Of the 122 respondents in the machinery manufacturing segment, only 19 (15.6%) report being users. Even so, it would be wrong to characterize this segment as a stronghold of Internet resistance.
Two-thirds of the users feel the Internet improved business efficiency, and more than 51% of non-users say they are extremely or somewhat likely to communicate with other companies in the next 12 months.
More than two-thirds believe the Internet will change the types of services provided by machinery distributors and sales agents, with 47.4% seeing it enhancing the role of such companies while 26.3% expect it to diminish their role.
Every one of the users believes Internet use will improve communications between machinery manufacturers and their processor customers, and three-fourths of non-users agree. Machinery manufacturing is the slowest segment to adopt the Internet, within an industry that is lagging. But it's also clear, according to USA Chicago, that even this segment is recognizing the Internet's potential benefits.
Plastic product end-users
While end-users are most active among the segments studied in using the Internet to communicate with the plastics industry, less than 30% report using the Net to do so.
Most users in this category use it to communicate with resin suppliers (66.7%) and plastics processors (63.9%), while just 22.2% use it to communicate with mold and die makers. Most users report it has improved business efficiency.
Among non-users, nearly 34% say it is extremely or somewhat likely they will use the Internet to communicate within the industry during the next 12 months.
It is clear from this study that the Internet still is not close to being institutionalized as a favored communications medium within the plastics industry.
One factor that possibly may have a cooling effect is the mounting concern about the Internet's speed and reliability. Many companies are finding it necessary to change Internet providers repeatedly as they prove unreliable.
A contributing factor is the "black box" nature of e-mail. Unlike telephone calls and faxes, e-mail messages between systems on the Internet usually don't confirm that they were successfully sent.
Nevertheless, Internet usage among plastics companies is expected to increase substantially in all segments during the next 12 months. According to USA Chicago, this suggests that usage is in the growth stage, interest is increasing dramatically and resistance is dropping as others in the industry experience the advantages of the Internet.
Robert Grace is editor ofPlastics News, a sister publication of Business Marketing.