A roll of pulp spins furiously overhead, as synthetic fabrics for fasteners and other components are rapidly fused onto it. Eventually, a long sheet of Huggies disposable diapers is sliced and wrapped for shipping.
Kleenex facial tissue and Kotex tampons roll off production lines worldwide at other Kimberly-Clark Corp. factories. Those plants trace their ancestry to a paper mill that opened here in Wisconsin’s lush Fox River Valley in 1872.
But don’t look at the consumer products giant as an old economy company, because its executives certainly don’t.
Indeed, experts say, it is manufacturers such as Kimberly-Clark that represent the new face of Internet businesses as the dot-com boom fades away.
America’s largest corporations all increasingly rely on information technology in general, and on the Internet in particular, to research consumer needs as part of the process of developing new products.
The Internet is also becoming the communications backbone for timing the procurement of raw materials, along with the manufacturing and shipping of products, to match up the supply of products with consumer demand at retail stores.
“The term `old economy’ kind of rubs you the wrong way,” said Gene Arnold, director of global customer coordination in Neenah.
“We don’t just kick out bath tissue,” he said. “We are a technology-driven company. We’re doing e-business.”
Even as experts caution that Internet initiatives can fail just like any other business venture, there is also increasing agreement about the potential promise of e-commerce solutions for non-technology companies.
One of Kimberly-Clark’s hallmarks is identifying new products through intense market research.
In 1998, after listening to complaints about diapers that would swell up like a beach ball when immersed in water, Kimberly-Clark introduced a hit product, Little Swimmers, which are colorful, disposable swim pants.
More recently, the company has been turning to the Internet for customer feedback, because it can be more effective than focus groups for discussions about personal subjects such as bed-wetting, menstruation and adult incontinence.
For example, an anonymous Internet message board for GoodNites disposable absorbent underpants is filled with emotional postings from children sharing their concerns about keeping their bed-wetting problems secret from their friends.
“I need a very discreet aid,” writes Jen, in one posting. “I’m not sure how to pull this off without being humiliated. Please give me some advice before I end up being very embarrassed.”
The GoodNites message board has underscored the significance of creating a product that’s not easily detected by others when it’s worn, said Lynn Brud, Kimberly-Clark’s research director for child care.
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The children are looking for a sense of community with others who have the problem.
“They’re communicating with each other more than they’re writing to us,” Brud said. “Some kids don’t even tell their parents. We wouldn’t be able to get those kids.”
Are the tools and business models of the Internet fundamentally changing the way the economy functions?
To be sure, many have been puzzling for some time over why much of Corporate America’s investment in computers and information technology has yet to translate into measurable productivity gains.
“It’s really easy to misspend in IT,” said Dr. Leon Kappelman, director of the Information Systems Research Center at the University of North Texas in Denton. “It’s easy to pay attention to solutions that may not be related to problems.”
But a University of Texas at Austin study released this fall concluded that companies that have implemented broad and well-planned electronic-commerce strategies are more likely to enjoy a strong financial performance.
“If they get into Internet investments, they need to do it whole hog,” said Dr. Andrew Whinston, director of the school’s Center for Research in Electronic Commerce.
For example, companies that invest in the flow of manufacturing processes internally, but don’t link those systems with their suppliers, fail to see performance improvements, Whinston said.
Manufacturers such as Kimberly-Clark have been using technology for some time to make their businesses more efficient.
But the main advantage of the World Wide Web over the older systems that companies have been using, such as electronic data interchange, is that it offers a standard platform.
The value of a common language is so strong that the Internet clearly will have a transformational effect on businesses, said Jorge Leis, a vice president in the Irving, Texas, office of Bain & Co., a consulting firm.
But nearly all technology experts caution that very few companies have gotten beyond the earliest stages on their Internet strategies.
“The work is still very much in front of us,” said Bill Shearer, director of the e-business practice for Thomas Group Inc., a consulting firm based in Irving.
That’s also the view at Kimberly-Clark’s headquarters in Irving, Texas.
“Everyone’s working to make their supply chains more effective,” said Thomas J. Falk, president and chief operating officer, explaining how technology is helping to set new goals for reducing costly inventory of raw materials and finished goods.
“We’d like to build today what we sold yesterday,” said Falk, who has been driving technology initiatives throughout the company.
Eventually, he said, the adoption of Internet standards worldwide will improve the efficiency of Kimberly-Clark suppliers and retailers overseas that have lagged behind in their use of computer technology.