Who knew the future of manufacturing might come into focus from behind the wheel of a big rig? Climb on board with Bering Trucks in Front Royal. Because it’s only 3 years old, it doesn’t have to overcome its past or change its culture to embrace the Internet. Unlike Virginia manufacturers that have been around a while, Bering is so new that it has the mind-set to use Net efficiencies to put its factories on cruise control.

Bering makes heavy trucks with ergonomically designed cabs at a plant in South Korea. The Internet helps link that operation to a new plant in Front Royal, which will assemble pilot trucks later this year. Not only will the Net help workers communicate across continents, it’s also being used to buy parts and connect with global markets. Using the Internet expedites the way the company operates, making it possible to better schedule assembly lines, track material and keep tabs on customers.

Yet Bering plans to do even more. "Now you’re processing the data faster and less people are touching it," says Operations Vice President Mike South. But the company still needs to go the last mile get it all connected. "That will be the next major step." He wants to use the fast-moving Net data for everything from scheduling production lines to improving delivery performance to better-controlling inventory. While Bering is ready to head down that road, it’s among the few.

Overall, the Internet offers tremendous potential for manufacturers, even though many in Virginia are slow in adopting it. The meat is in supply-chain management — seamlessly linking customers, suppliers, production, shipping and other functions via a common platform made possible by the Internet, intranets and extranets.

Many manufacturers have already made those links in one form or another with EDI, or electronic data interchange. But they’ve had to spend millions on machines and service to make it work. The Internet is a much better deal. Net versions of EDI are going to be a major force in manufacturing, says Professor Edward Davis of U.Va.’s Darden Graduate School of Business. "The Net is cheaper, more flexible and a heck of a lot less expensive," he says. "It’s changing companies in ways greater than anything else that’s come along."

Manufacturers of computers and related products are leading the industry in terms of integrating the Internet and related technologies on the factory floor. Dell Computer and Cisco Systems are among those who connect customers and suppliers with production operations for mass customization. In such industries, where obsolescence is measured in weeks and days, moving quickly is a do-or-die proposition. The real question is when the Net will infiltrate the Old Dominion’s old-line manufacturers and smaller operations.

To get more small firms online, the A.L. Philpott Manufacturing Center, an extension service for Virginia’s small to midsize manufacturers, is rolling out a series of workshops. The first, held July 11 in Winchester, was about using the Net for supply-chain management. Two more on the same subject are planned for Aug. 9 and 10 in Roanoke and Richmond. "This is probably one of the best applications to get a company started," says Bob Schwabik, a Philpott project manager.

Customers input orders via the Internet, and those orders are transferred to the company’s systems to schedule production and check inventory. If inventory isn’t sufficient, the computer sends e-mail to suppliers with a request to restock the factory floor. When the finished product is ready to ship, customers receive e-mail telling them to expect it on their loading dock.

The required investment? A setup fee, a few hundred dollars a month, a PC and an Internet connection. "There are tremendous efficiencies to be gained by improving the speed of information of order entry, all through the process, to the time the product is shipped," Schwabik says. For small operations, it’s also an issue of manpower. "In this economy of hard-to-find labor, if you can do a transaction where a person is never involved, other than to take it out of the box and ship it, you’ve achieved efficiencies."

Manufacturers — a conservative lot — have the same concerns as service companies and retailers when it comes to going online. The status quo works just fine for many, so they see no compelling reason to change. What’s more, the technology has only come into its own in the past two years, with no rousing testimonials of long-term safety and reliability. Companies don’t want someone hacking into their systems to access proprietary information or tamper with data.

Security is one reason Hudson Industries of Henrico County is in no rush to move its manufacturing operations to the Net. The company makes consumer and medical foam and polystyrene products — such as beanbag chairs, specialty pillows and mattress pads — at plants in Henrico and some 60 miles away in Crewe. Combined, the two locations have about 115 employees and just under $10 million in annual revenues. "We would have major concerns of transmitting orders and shipping information via the Internet," says Frank Parent, the company’s chief financial officer. Instead the company uses EDI to link the two operations. "With our leased T-1 line it goes point-to-point, and there’s no way for anyone to get that information." In both Crewe and Henrico, customer orders are sent via EDI, and when products are shipped the files at headquarters are immediately updated.

It’s not that the company isn’t Net savvy. In one example, Hudson Industries supplies J.C. Penney with beanbag chairs for sale through Penney’s catalog. Hudson can use the Internet to see how its products are selling, right down to the ZIP code. The company also is considering an Internet-friendly front-end system, but manufacturing operations would remain independent. "We’ve kind of taken a cursory look," Parent says.

Going to the Net makes sense for companies that deal directly with the public, he says. His company is almost entirely business-to-business. "The larger customers, where we would see the need to automate, have EDI capabilities already," he says. "An additional investment to become Internet capable would not be worthwhile for us." Parent knows things could change tomorrow, though. Industry scuttlebutt has it that big retailers like Wal-Mart want to shift to an Internet platform, but that still has not happened.

Procurement is another reason why manufacturers are going online. The Internet is allowing companies to compare prices, aggregate purchases and negotiate better deals. U.Va.’s Davis notes that the tractor company John Deere has bundled suppliers’ orders with its own to get the most of its purchasing power. Lower-cost steel for suppliers ultimately translates into lower costs for John Deere. "You can do that so much more easily with the improved communication and fast response time of the Web," Davis says. Some suppliers will have to change the way they operate. With price information available online and more companies willing to sacrifice margins for volume, low-end providers are going to battle it out. But companies that have found a niche and provide extra value will still have a place in the market.

At Bering Trucks, all supplies for maintenance, repair and general operations are ordered over the Internet, says Bruce Kuni, manager of purchasing. "We’ll either get it the same day or the next day for operations, from office supplies to perishable supplies to maintenance items." The company also is using the Internet to order 75 percent of its production materials; 25 percent is still EDI.

Like other major buyers, the company would like all its suppliers to move to a Net-based system. Some suppliers receive information over the Internet but have to manually key it back into their systems, which takes more time and increases the risk of error. "It’s always a struggle with the format," Kuni says. The Internet, he says, is much cheaper — there’s no special equipment, no maintenance, no fuss. "We’re waiting for suppliers to catch up on the technology side."

Many manufacturers also are finding that the Internet provides easy access to the global marketplace (see sidebar, Page 102). "I just had a prime example of a company that wanted a particular component part from suppliers I’d never heard of," Bering’s South says. "Now it’s just a matter of turning around and looking on the Web. ... You’ll find them nine out of 10 times."