Purchasers building stronger ties to Web.
BY: Jennifer Baljko Shah
Purchases are becoming more comfortable with the Internet and are sending a greater number of transactions through cyberspace, according to a recent survey of 361 manufacturing organizations.
The survey, conducted by the Institute of Supply Management, Tempe, Ariz., and Forrester Research Inc., Cambridge, Mass., indicates purchasers are boosting their Web-based procurement of direct materials. In fourth-quarter 2001, purchasers bought and average of 6.2% of direct materials online, up from 5.3% in the third quarter, according to this survey.
Additionally, they are tapping into online auctions as an alternative sourcing and cost-reduction solution. Of those surveyed, 23.1% said they purchased products or services through an online auction in the fourth quarter, up from 17.4% in the prior quarter. Of the 177 manufacturers polled, 29.5% said they used online auctions, compared to 21% in the third quarter. These results dovetail with the increased weight companies are placing on linking purchasing practices with Internet strategies. A vast majority of the manufacturers surveyed said the Internet will play an important role in their procurement plans this year.
"The Internet has become a necessity for large purchasers," said Forrester analyst Bruce Temkin, in a statement.
"The discussion has moved away from the Internet should be used and where and how it can save money."
Despite the strides, several factors are impending broader Internet adoption, the researchers said. Purchasers two top concerns are suppliers' relative lack of Internet capabilities and a lackluster business environment.
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