|17 June 1999|
Web-based procurement for biologists
Towards the end of last year, with members of Congress and business executives in the audience, the Clinton administration announced a series of steps aimed at promoting global commerce on the Internet. These steps should be very attractive to the scientific community. In the past few decades science has become a global enterprise: different parts of research projects are done in different countries, and networks of computers let us instantly exchange megabytes of information. Sensitive scientific products, manufactured equipment and reagents can be transported, overnight, around the world. But until recently the ordering of goods and services remained largely unchanged. Scientists still browsed outdated catalogues crammed with Post-It notes, and flyers with updates, spending precious time locating products and making comparisons.
The Internet, an indispensable source of information for researchers, is already changing this and has the potential to make further drastic changes. We are witnessing the emergence of electronic marketplaces for one-stop comparative shopping -- �super-malls� providing suppliers with a global reach and the option for instant updates on prices and products. Buyers benefit from lower transaction costs, because scientists can place orders directly from their desktops, and from easy price comparisons, because the price of a chemical can vary by more than 200% between suppliers. Scientists can search electronically through products from several suppliers, cut the length of time spent in searching for a product and place a single order from several suppliers.
Buying the expensive way
Surveys at trade events show that a research scientist can spend up to five hours each week browsing shelves with catalogues and investigating prices and availability. Further time can be spent finding a supplier or shopping for the cheapest product. Yet more time can be wasted in placing and tracking an order--costs in time that can match the price of the reagent itself. In the semiconductor industry, the cost of a single-purchase transaction can reach $1391. Purchasing costs added to the costs of non-productive time that scientists spend away from the bench can total more than $200 for each product purchased.
A web-based marketplace offers the potential for major changes in purchasing for laboratories, and promises considerable savings of time. Table 1 shows examples of sites with free information about reagents and products for life sciences. Many provide product information and links to manufacturers� home pages; on some you can electronically complete a request for information about the products from the supplier (BioSupplyNet). Other electronic catalogues (Syncon) let you locate a product and link to the supplier�s home page.
Good places to begin in locating manufacturers and products are SANBIO Biotechnology Resource, On Line Ordering for Biologists and Biochemists, and the Cybertech Biotech Catalogue (Table 2). Another very useful starting point is the list of biotechnology companies maintained by The Molecular Phylogenetics Laboratory at the University of California in Berkeley (Table 2). Some sites are simply a collection of links; others are designed to allow a user to search either by product or by manufacturer. But none of these has the option of comparing prices and specifications.
Buying is changing
Many suppliers have options for on-line purchasing -- you can buy on account or make single purchases on a credit card. Most of the time it is still not possible to compare products from competing suppliers unless you can invest the time to visit separate sites. But there are exceptions: Neoforma (http://www.neoforma.com), SciQuest (http://www.sciquest.com) and Chemdex (http://www.chemdex.com).
A feature of electronic commerce (�e-commerce�) sites that can reduce selling costs and the length of active sales cycles � the time from the moment the customer starts to search for a product till the moment the order is placed - is �collaborative filtering� or �collaborative navigation� (Net Perceptions, at www.netperceptions.com). By identifying communities of like-minded people, visitors are helped to navigate large web sites by being directed to areas viewed by visitors like themselves.
Another option is �interactive ordering�, offered by companies such as Genosys (www.genosys.com/order01.html). Here, software analyses the structure of a primer -- a small oligonucleotide used as a starter in nucleic acid synthesis -- before it is ordered. Interactive analysis reduces the probability of ordering non-functional primers3. Genosys customers can also track their orders throughout synthesis and shipping3: order tracking is a another useful time-saving feature offered by many e-commerce sites.
Buyers need to be cautious not only about the security of passwords and financial information but also about the safety of buying patterns. The TCP/IP protocol -- the communications program used by most connected Internet computers -- was not designed with security in mind, and is vulnerable to network eavesdropping. Without system security on browser and server sides, confidential documents are vulnerable to interception at either end. It is a good idea to check the type of security system that off-site servers use. This might be �cookies�, for example, or a different kind of encryption technology. Check what kind of protocol is used to secure credit card transaction. One of the most secure would be SET (secure electronic transmission) protocol. This protocol was proposed by VISA and Mastercard especially for electronic commerce and includes digital certification. SET authenticates all the parties involved in the payment process including the cardholder, merchant, and acquiring bank to ensure they are legitimate entities prior to the transaction.
Another consideration is that the very act of browsing leaves in the memory of the computer an electronic history of your web activity from which unscrupulous individuals can reconstruct a very accurate profile of the your tastes and habits. Complete information security should include the protection of buying patterns.
E-commerce: evolution and applications
How did e-commerce evolve from well-known search engines and what is the difference between an e-commerce site and a search engine? The so-called portals--Yahoo, Alta Vista and Excite--have been established for years and allow product searches.
Designed as search engines, portals evolved into info-intermediaries, or �informational middlemen�. Through categorizing and advertising they represent a primitive evolutionary business-to-person model (B2P). An advanced B2P model connects a limited number of suppliers unidirectionally with large number of potential end-users.
But in the highly fragmented business-to-business markets (B2B), suppliers are also users of the products manufactured by others. Connecting suppliers and end-users in markets such as chemicals and computer parts has become extremely important. To function efficiently, these types of market need a meaningful communication channel between buyers and sellers. This channel is provided by e-commerce.
QuestLink Technology (http://www.questlink.com) offers an option to search and purchase approximately 400 000 computer and semiconductor parts from 300 different manufacturers. Neoforma.com connects doctors and hospital personnel with makers of medical devices. Chemdex (http://www.chemdex.com) links biological suppliers with scientists in biotechnology companies and the academic community. This group of companies identify themselves as �vortex� business, the buzzword created by venture capitalist W. Gurley4. This means that one web site offers products from many suppliers, which creates a convenient �one-stop shopping mall� for customers. Additional suppliers are attracted to participate when more customers use the site. This positive feedback loop has the potential to create an essential destination for an entire industry.
In the near future we are likely to see the extensive proliferation of e-commerce. This will greatly affect not only the shopping habits of individuals but also the procurement strategies of the industry. There are also signs that governments are beginning to realize the importance of e-commerce and to invest money in its development. The US government stated its aims in November 1998. These include keeping the Internet tax-free, extending consumer protection into cyberspace, bringing high-speed connections to homes and businesses, and keeping competition vigorous. But possibly the most significant sign of the seriousness with which governments view e-commerce is their own investment in such sites. In the past year and a half, The National Institutes of Health has developed an electronic shopping mall to speed up the process of procuring supplies, services and equipment, and to reduce costs5.
Electronic commerce provides powerful mechanism that will benefit all aspects of the research process. Scientists will find it easier to locate products with the desired characteristics, and purchasing officers will be relieved of the everyday task of tracking orders.
Nathan Bach, Ph.D.
The mention of any commercial web-site within this feature should not be taken to imply an endorsement by Nature.
Nature © Macmillan Publishers Ltd 1999 Registered No. 785998 England.