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e-Business in the chemical, rubber and plastics industryExhibit 3.1-1: e-Business related opportunities and challenges for CRP firmse-Business related opportunities• Save costs by improving the efficiency ofsupply chain processes, in many cases witha rapid return on investment• Reduce the error rates in B2B transactionsby eliminating paper-based processes• Faster accomplishment of tasks by usingelectronic planning and controlling tools• For buyers: reduced procurement costs• Not yet fully exploited: innovative marketingapproaches to reach new customerse-Business drivers• International competition and resultingpressure on exploiting all cost savingpotentials• Structure of supply chain processes in thesector is well suited for B2B online trading• Sector is well suited for use of e-standards• Growing maturity of e-business software andfocus of providers on the not-yet-exploitedsmall company markete-Business related challenges• For suppliers: Further pressure on profitmargins due to sophisticated e-procurementmechanisms (such as e-auctioning)• Investment risks due to uncertainty aboutthe technology and market development:Potential lock-in to specific applications andB2B connectivity modese-Business barriers• Reluctance to re-engineer businessprocesses among smaller firms• Dichotomy between large players and smallfirms• Shortage of investment capital after theoverall economic downturnSource: e-Business W@tch sector study on the chemical industries (August 2004)No major policy implicationsThe e-Business W@tch study of 2004 concluded that the research findings would notpoint at an urgent need for e-business specific policies in the chemical sector. Theadoption and use of ICT in the would be unlikely to cause dramatic changes or stir-ups inthe industry value-chain. It was argued that the restructuring process in the chemicalindustries were related to general economic developments (such as globalisation) ratherthan caused by technological determinants. e-Business was seen as a facilitator of thesedevelopments, but not as the cause. In conclusion, e-business related interventions fromthe public sector were not considered necessary. One area was identified where policymight consider activities: helping SMEs taking informed decisions by providinginformation about e-business opportunities and necessary preconditions to grasp them. Itwas argued that, without proper preparation for e-business, smaller companies might beunable at some point of time to meet technical requirements (such as providing allbusiness documents electronically) of doing business with larger customers.41