Running the Numbers

The latest facts, figures and benchmarking data

sourcing, procurement

Industrial Buyers Shopping on the Web, But Suppliers May Be Missing the Sale

Sponsored by ThomasNet.com, a Web site for industrial procurement, and search engine Google, a nation-wide study of more than 900 industrial

But it's not all good news for industrial sellers who are already online. If potential buyers find the supplier's Web site online they're likely to find the information lacking. According to the study:

* 70 percent of buyers expect to find detailed information on product applications and uses, but only half of all sellers' sites (53 percent) provide it

* 58 percent seek computer-aided design (CAD) drawings and plans, but only 13 percent of sellers make them available online

* 74 percent expect to find product prices, but only 23 percent of company Web sites offer them

* 67 percent want to see shipping information and costs, but fewer than 17 percent of suppliers provide this on their sites

Eileen Markowitz, president of Thomas Industrial Network, stated: "Industrial marketers need to address the quality and specificity of the information they make available so they can start to turn more of their Web site visitors into customers and gain a real competitive edge."

procurement, corporate governance

T&E, Office Supplies Spending seen Higher in '06; Financial Execs Ramp Up Scrutiny

According to a new study by American Express, which polled 255 U.S.-based companies of varying sizes on a variety of indirect expense management issues, many financial executives indicated they are anxious about a potential rise in travel and entertainment costs. A majority (54 percent) forecast that their companies' overall level of spending for non-T&E procurement (incurred in both procuring and processing purchases) for 2006 will increase by up to 10 percent above this year's level.

An additional 15 percent of respondents said spending would grow by more than 10 percent. Meanwhile, 20 percent foresaw no growth in 2006 spending, while the remainder of respondents forecast declines.

On the T&E side, nearly half (47 percent) forecast up to a 10 percent year-over-year rise in spending for 2006, while another 9 percent estimated a spike of more than 10 percent. Meanwhile, one-third said T&E spending would remain the same, and the rest foresaw declines.

Overall, most financial executives polled felt confident - to some degree, at least - about their employees' adherence to T&E spending rules, with 36 percent saying they were "very confident" that employees were toeing the line, 56 percent saying they were "somewhat confident," and the remainder either "not very confident" (7 percent) or having no opinion (1 percent).

Nevertheless, it's clear that financial executives are cranking up oversight of expenditures. For non-T&E expenses, such as office supplies, nearly three-quarters (72 percent) of those surveyed said that, compared to previous years, their firms are scrutinizing purchasing processes and approvals "much more" or "somewhat more" carefully.

supply chain integration, technology infrastructure

ERP in the Mid-market Enterprise

Mid-market enterprises (MME) in 2005 are finally looking at the competitive need for enterprise-wide technology rather than the typical mosaic of disparate point solutions, according to a recent report by Aberdeen Group and sponsored by Epicor Software Corp.

In addition to addressing their espoused need for customer relationship management (CRM) software, MMEs are ready for a technology overhaul - either installed software, hosted solutions or outsourced services, Aberdeen says.

Aberdeen reports that respondents feel their return on investment (ROI) from their current enterprise resource planning (ERP) solutions was less than 50 percent, indicating that either today's employed solutions were not meeting mid-market business requirements or expectations, or perhaps that the mid-market enterprises failed to use their current ERP solutions to full advantage.

Integrating fragmented business applications is a key strategy for mid-market companies looking to make better use of the technology they have in place today. But, Aberdeen says, the plan for smoother business operations is not seen as simply pasting together existing applications. Companies want to consolidate their enterprise business applications across the entire company, and they are also turning to integrated solutions. While 26 percent use an integrated ERP suite today, 60 percent plan on employing such a solution within the next 12 months.

logistics

Value of Ocean, Inter-country Truck Freight Seen Set to Soar

The Colography Group reported recently in its annual forecast of the worldwide expedited cargo market that the total value of cargo moving by vessel or across borders by truck will grow 13.7 percent over 2005 forecasts. In addition, the value of each pound of "surface" cargo is projected to rise by 4.5 percent next year.

The total value of air-shipped goods is projected to rise by 8.9 percent in 2006, still a healthy gain. But the value of each pound of international airfreight will increase by only 0.4 percent year-over-year, suggesting a growing percentage of lower-valued commodities will enter the airborne mix.

As a percent of worldwide value, the value of surface-shipped goods continues to grow at the expense of air. Goods moving by surface transport will account for 65.4 percent of total cargo value in 2006, up from 59 percent in 1999. By contrast, air's share peaked in 1999 at 41.1 percent and is projected to drop to 34.6 percent by 2006.

The Colography Group projects the value of the global cargo market - excluding all domestic goods and all goods moving via transborder rail and/or pipeline - will reach $10.2 trillion in 2006.

Continuing another recent trend, global surface tonnage will expand at a faster rate than air tonnage. Surface tonnage is projected to increase by 8.7 percent, compared to an 8.5 percent rise in air tonnage. Across all modes, 14.3 trillion pounds will be shipped in international services next year, a projected 8.7 percent gain over 2005 estimates.

"Value growth, especially in the maritime sector, is influenced by the fact that more barrels of oil are moving at higher prices than ever before," said Ted Scherck, president of The Colography Group. "In addition, the rapid price escalation for refined products such as jet fuel has an adverse impact on demand for air transport, which is already priced at a premium to competing modes. As a consequence, shippers and consignees may find it more cost-effective to configure their supply chains to increase the use of more economical surface transport services."