What could be more old-economy than paper — paperwork, paper forms, paper trails (you get the idea)? For almost 80 years, United Stationers Inc. has distributed all manner of paper products, along with every conceivable device for attaching, detaching, organizing, and, yes, pushing paper. But new technologies have raised a new question: Can an office-supplies giant turn into a paper tiger?
"The Internet caused us to stop seeing ourselves as just an office-products wholesaler," says John D. Kennedy, 46, a 10-year veteran of United Stationers, a Chicago-based, $3.8 billion company that stocks and distributes more than 35,000 products for retail powerhouses like Office Depot and Staples, as well as for smaller office-supplies dealers. "We now see ourselves as a company with core capabilities that are valuable outside of the office-products business."
If Kennedy has guessed right, a new crop of potential customers will soon see things the same way. He's president of the Order People, a new United Stationers subsidiary that offers order-fulfillment services to online retailers in product categories ranging from sporting goods to consumer electronics. (So far, more than two dozen clients have signed up.) In launching the Order People, United is following a model that other established companies have laid out: Find resources and capabilities that are latent in your existing value chain, and turn them into broad-based, Internet-driven opportunities.
How does a traditional distributor of Post-it Notes and toner cartridges transform itself into a Net-enabled distributor of baseball bats and CD players? While many of the Order People's shipping, tracking, and customer-service systems predate the Internet, they are well suited to meet the demands of e-commerce fulfillment — namely, speed, customization, and personalized customer service. "We get orders very late in the day, turn them around in a few hours, and have them on our trucks for delivery the next day," Kennedy explains. "Our warehouses are set up to ship objects as big as a desk or as little as a box of pencils."
Meanwhile, Kennedy has recruited a team of programmers and marketing specialists to create new, Net-based customer-service solutions — such as instant messaging and customer-relationship management — that build on United's order-tracking system.
Kennedy and his team have spent several months riding the e-commerce learning curve, gathering insights from retailers and technology companies alike. What has Kennedy taken away from his investigations? "The most fundamental lesson that I've learned," he says, "is that if companies can use technology to get closer and closer to their customers, they're going to win."
Cathy Olofson (firstname.lastname@example.org) is a frequent contributor to Fast Company. Visit the Order People on the Web (www.theorderpeople.com), or contact John D. Kennedy by email (email@example.com).
A version of this article appeared in the March 2001 issue of Fast Company magazine.