Donaldson Co.'s 2016 upgrade made new global, e-commerce system possible

For Donaldson Co., building a global e-commerce system had several obstacles: Different divisions sold to different types of customers. Different geographic regions had different currencies.

A platform had to be designed to accommodate all the different parameters. The good news was that all the units' computer systems already talked to each other because Donaldson in 2016 had successfully rolled out a $90 million global enterprise resource planning, or ERP, system, a move that itself often poses challenges for companies.

But Donaldson also had a deadline: it wanted its new global e-commerce site to be available by the time of the Automechanika trade show, which was earlier this month in Frankfurt, Germany. The biennial conference is an important one for Bloomington-based Donaldson and one of the largest automotive services trade shows in Europe.

"The ERP system is an enabler. Now we have a global part number system, now we have a global unified system," said Tom Scalf, senior vice president of Donaldson's engine products business. "Although it was a major undertaking, it made [adding the e-commerce system] doable globally versus trying to lay something over five different systems."

ERP systems knit together the various software systems throughout an organization, such as inventory, order management, customer relationship management, human resource systems and others.

In the second quarter of 2014, Donaldson began to deploy a global ERP system. The multiyear implementation of that project concluded in August 2016.

Global ERP system implementations can be tricky. Plenty of companies have had problems with their rollouts and it is not unusual for projects to land in the footnotes of company financial statements describing project delays and cost overruns.

Before the rollout was completed, Donaldson had already begun planning for a new e-commerce system, with teams being formed in September 2016 and a pilot program for select customers started in January.

"Because we didn't have divisions around the world each building their own systems, it's a single system now available to everyone," said Rod Radosevich, a marketing manager for Donaldson who helped make shop.donaldson.com user-friendly. "As a result, we become much more efficient by not having to build and maintain multiple systems."

Historically, Donaldson's engine aftermarket business has had an e-commerce platform for its distribution partners. But that system was nearly 20 years old and showing its age. Plus, it was available only in North America and Latin America. The new system was designed as a truly global system.

In the engine aftermarket business, Donaldson uses distribution partners. Those partners might look different around the world. In the U.S., Donaldson has around 3,000 distribution partners. Their distributors in South Africa and Australia are fewer but are bigger and more concentrated.

In Donaldson's industrial business, the company interacts with end users more directly and the e-commerce system had to meet different demands of that market. "For our industrial businesses, we can sell directly to end users; this e-commerce system is a whole new enabler for our businesses," Scalf said.

Searching on the platform for the 21,000 products will be easier and full product descriptions will help distributors and customers with cross-referencing products and usages.

The login component of the system also allows Donaldson to do personalization for customers for pricing and volume based on established sales agreements. "It's not the same platform for everyone," said Peter Duhart, Donaldson's new global e-commerce director.

Since the program was introduced to select customers in January, they've pushed through 10 upgrades. Through six months of the pilot phase, Donaldson has already processed nearly 40,000 orders, worth approximately $100 million, from nearly 1,700 customers in 107 countries.

"We are starting to gain a lot of insights from our customers from the behavioral side of it as well as the qualitative and quantitative nature of the products," Duhart said.

Those insights will help Donaldson make changes to their distribution chain but will also help inform where future investments are made.