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Report: use of Internet to purchase direct materials surpassed indirect materials.

The institute for Supply Management (ISM, www.ism.ws) and Forrester Research Inc. (Cambridge, MA, www.forrester.com) have released the latest Research Report On eBusiness, which tracks online activity for manufacturing and non-manufacturing organizations. The report indicates that the percentage of direct materials purchased online surpassed the percentage of indirect materials purchased using the Internet for the first time since the fall of 2000 when the report was developed. Survey respondents spent an average of 11.7% of their total direct materials using the Internet in Q2 2003, up 1.7% from Q1. Indirect materials spending remained flat at 11.0%.

"Large companies that procure more than $100 million per year also increased their use of online auctions," said Edith Kelly-Green, spokesperson for ISM and vice president and chief sourcing officer for FedEx. "Two of the main concerns keeping survey respondents from wider adoption of the Internet surround the lack of supplier enablement and integration with internal and external systems."

"All companies agree that the Internet continues to grow in importance, with 42.3% of large-volume purchasers saying that the Internet was very important to their purchasing strategy in Q2," said Jennifer Chew, senior analyst at Forrester.

The report states that online request for proposal (RFP) usage is on the rise and that large companies are using more eProcurement tools.

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 materials per year with those that purchase less than that amount per year.
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Title Annotation:electronic procurement statistics; Market Watch
Publication:Circuits Assembly
Article Type:Brief Article
Geographic Code:1USA
Date:Oct 1, 2003
Words:263
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