The National Association of Purchasing Management (NAPM) and Forrester Research, Inc. (Nasdaq: FORR) announced the release of the second NAPM/Forrester Research Report On eBusiness, a report that tracks online activity for both manufacturing and nonmanufacturing organizations. The report shows that 71% of organizations use the Internet for indirect purchases — a sharp increase from 61% reported last quarter. On average, these online buyers bought 9% of their total purchases over the Net. While purchasers increasingly buy online, more than half of the respondents believe that they are in the earliest stages of adopting online buying.
“More usage of the Net is not surprising, as organizations have begun understanding the full potential of managing their supply chains via the Internet,” explained Edith Kelly-Green, vice president, sourcing and procurement, FedEx. “The increase in online purchases of indirect goods and services is indicative of how companies make the initial and early moves into the world of eCommerce. Increases in use were noted in spite of economic concerns and difficulties in internal and external integration.”
The survey also indicates that manufacturers are often concerned with their suppliers’ online capabilities and that they report significantly lower levels of online collaboration with their suppliers.
“Organizations are following different online buying paths. Manufacturers appear to be having a problem with their suppliers — as the percentage of manufacturing companies using the Internet to collaborate with suppliers dropped to 40% from 54% last quarter,” said Bruce D. Temkin, group director at Forrester. “While larger buyers show the most momentum across many activities, a higher percentage of smaller buyers use the Internet for purchasing direct materials and finding new suppliers.”
The Report On eBusiness also revealed that 88% of organizations see the Internet as important to their buying plans, a slight increase over 87% from January. Only 26.1% of organizations reported a cost savings from their Internet activities — a slight decrease from 26.6% last quarter.
For the Report On eBusiness, NAPM and Forrester Research received survey replies from purchasing executives from both manufacturing and nonmanufacturing 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 nonmanufacturing organizations; and the comparison of organizations that procure more than $100 million 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®.
Founded in 1915, the National Association of Purchasing Management, Inc. (NAPM) is one of the most respected educational organizations in the United States. NAPM is a communication link with more than 47,000 supply management professionals. NAPM is a progressive association with a mission to provide national and international leadership in supply management, particularly in the areas of education, research, and standards of excellence. Through various resources and a network of affiliated organizations, NAPM provides opportunities for expansion of professional skills and knowledge. A not-for-profit association, NAPM offers a wide range of educational products and programs.
NAPM has provided a rich history of economic data for over 67 years on the U.S. 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.