The National Association of Purchasing Management (NAPM) and Forrester Research, Inc. (Nasdaq: FORR) announce the release of the fourth NAPM/Forrester Research Report On eBusiness, a first-of-its-kind report that tracks online activity for both manufacturing and non-manufacturing organizations. The primary finding in the latest report is that the number of buying organizations that used the Internet to collaborate with suppliers grew from 43.6% last quarter to 49.5% for the quarter ending in September 2001.
During the third quarter of 2001, large-volume buyers and manufacturers reported the most significant increases in collaborating with suppliers. Large-volume buyers’ collaboration went from 46.4% to 63.5% and manufacturers’ collaboration rose from 40.0% to 52.4%. The report also revealed that in spite of the economic downturn, the overall number of companies purchasing indirect and direct materials continued to grow.
“We continue to see the impact the economy is having on how quickly companies adopt a full-blown Internet procurement process,” says Edith Kelly-Green, vice president and chief sourcing officer, FedEx. “But it appears that companies are assessing where they can find the best value for their needs and leveraging the Internet in those areas. The increasing number of companies now collaborating with suppliers indicates an awareness that successful use of the Internet requires a partnership between the buyer and the seller with benefits to both.”
“eProcurement represented only the first wave of online activities,” said Bruce D. Temkin, group director at Forrester. “We are now seeing the start of the next wave — collaboration — in which buyers will use the Net to redefine how they interact with suppliers.”
The Report On eBusiness also revealed that organizations decreased their participation in online marketplaces. Approximately 23% of organizations bought goods or services via online marketplaces — a decrease from 25.2% in the previous quarter. The biggest decline came from large-volume-buying organizations, which dropped their use of online marketplaces from 30.5% to 24.8%. In addition, the Report showed that such organizations slowed their use of online auctions to 17.4% from last quarter’s 20%. This reduction was caused by small buyers having cut their use of auctions dramatically, dropping from 13.9% to 7.3%.
For the Report On eBusiness, NAPM and Forrester Research received survey replies from supply-management executives from both manufacturing and non-manufacturing organizations. To understand the difference in online behaviors of these organizations, the report analyzes three areas: the results of all organizations; the comparison of manufacturing and non-manufacturing organizations; and the comparison of organizations that procure more than $100 million on direct and indirect materials per year and those that purchase less than $100 million per year. To track the adoption of different activities over time, NAPM and Forrester created the eBusiness Adoption Momentum index (eBAM).
The NAPM/Forrester Research Report On eBusiness, developed in fall 2000, measures the adoption of Internet-based procurement. NAPM and Forrester Research developed the survey jointly and will issue the report every three months in a manner similar to the monthly NAPM Report On Business®.
The National Association of Purchasing Management (NAPM), established in 1915, is the world¿s leading educator of supply management professionals, and is a valuable resource for decision makers in major markets, government, and industry. Effective January 1, 2002, NAPM will become the Institute for Supply Management (ISM) in recognition of the mounting strategic and global significance of supply management.
NAPM has provided a rich history of economic data for over 67 years on the US economy with its Manufacturing NAPM Report On Business® and the Purchasing Managers Index (PMI). Since June 1998, NAPM has also been publishing the Non-Manufacturing NAPM Report On Business®. Both surveys can be found at www.napm.org.