" How I Saved $100 Million on the Web."

A lot of it translates into asset velocity. You get some cost reduction also, because you're moving cumbersome, paper-based processes online. But the real benefit is that it makes your business more efficient by providing real-time information right where it needs to be -- inside your suppliers' factories. We used to build air conditioners according to forecasts and then hope that customers would buy what we produced. Now we build air conditioners on demand, with customers pulling the product all the way through our value chain. We couldn't approach that kind of transparency without the Web.

Carrier is a big company. Are the changes that you describe really just a matter of fine-tuning the company's operations, or are they more fundamental?

You've got to get people to think differently and to change, but once you achieve that, you see big flows taking place, and you get big benefits. Yes, okay, there's disintermediation; there's re-intermediation. That's all neat stuff to talk about, and it's really happening -- out on the periphery. But when big companies get on the Web, they see huge benefits because of their relationships, their brands, and their assets. And that's what we're seeing inside Carrier. Large businesses can create shareholder value that overwhelms the value that the dotcoms can create. We have a fantastic relationship with FreeMarkets, but the benefits that we get from the relationship are an order of magnitude greater than what FreeMarkets gets. And then all of these little pilot fish feed off the big businesses.

Carrier has the dominant market share in its industry, and there are no competitors in the pure-play dotcom field coming at you. What has enabled you to "get it" enough to be the first movers in this space?

First, we have a lot of different businesses, and we've turned diversity into a virtue, with lots of creativity taking place in the field. Second, and this is very important, we really encourage the communication and dissemination of best practices. When we see something that works somewhere, we grab it and propagate it across the whole organization. Brazil, for instance, was one of the first places where we built the Web into our sales and distribution channel. We said, "Hey, this is fantastic. Boom, let's do it for the whole company." And third, members of our senior management team have identified the Web as critical to our strategy, and they talk about it all the time.

This kind of change really has to begin at the top. Since I started this job, back in December 1999, I've been spending about 30% of my time on e-business. Every single one of my direct reports is passionate about e-business. And that's not just because I talk about it -- that's because they can see the results. They see how fast you can move when you focus on the right things.

Last February, I challenged my parts organization to build an online store for replacement components. This initiative isn't aimed at consumers; it's an online store for our channel partners. I got up in front of Wall Street analysts and said, "We're going to get a virtual parts store up and running in 90 days." And the reaction from the replacement-components group, two layers down, was "We're not quite sure what he means, but it sounds interesting. Let's figure it out." Ninety days later, we had a virtual store that was handling transactions. And now that initiative is gospel. When it comes to e-business strategy, nothing really should take longer than three months from an idea to the start of production.

Paul C. Judge (pjudge@fastcompany.com) is a Fast Company senior editor. Contact Jonathan W. Ayers by email (jonathan.ayers@carrier.utc.com).