Purchasing survey reveals Internet, purchasing trends
By Staff -- Industrial Distribution, 1/1/1999
Chicago--A recent survey of MRO supply purchasers reveals that integrated supply strategies and the use of the Internet are on the rise.The survey also shows that the consistent availability of replacement parts is one of the most crucial issues for companies when looking for a supplier of MRO products.
The results are key findings of the 1998 Grainger Annual Survey, "Issues in MRO Supply Purchasing and Management." Conducted earlier this year, the survey asked 600 purchasing decision-makers representing small, medium and large businesses, to comment on factors that influence their selection of MRO supplies. Those interviewed were responsible for acquiring MRO supplies and services for a range of U.S. industries including manufacturing, construction, transportation, communications and utilities, and institutional services such as lodging, education and healthcare.
The survey shows that in their efforts to improve operations, many large companies plan to improve their indirect materials management through a combination of product standardization, supplier consolidation and outsourcing arrangements. These processes are in line with many of the practices that characterize integrated supply, according to Grainger.
"Large companies are recognizing that integrated supply management practices can provide a significant reduction of total indirect materials costs, improved productivity, and the ability to redirect resources to other activities," Pete Torrenti, vice president and general manager, Grainger Integrated Supply, said in a statement.
Seventy-eight percent of large companies surveyed say they plan to implement some type of product standardization in the next two years; 48 percent say they plan to consolidate the number of MRO suppliers they use; and 25 percent say they plan to outsource at least a part of the MRO purchasing or management function.
The survey also shows that ordering MRO supplies via the Internet is gaining loyalty among those already purchasing online. While just eight percent of the companies surveyed order via the Internet, the majority of them report plans to increase that practice in the next two years. Most cite speed and convenience as major advantages.
"We weren't surprised by the results," says Daniel Hamburger, vice president and general manager, Internet commerce for Grainger. "Clearly, this is where things are going. One of the things that was very encouraging [was that] businesses who tried it, liked it. And that's what we're finding on Grainger.com."
Hamburger says he plans to use the survey information as a way to build awareness within the industry of the benefits of purchasing online. He says the results also force the company to look at what might be holding people back from online ordering, and to find new ways to address those issues.
Wes Clark, a group vice president at Grainger, says an interesting finding is the emphasis customers are putting on the importance of repair products. When asked to rate the importance of 13 supplier services, 76 percent listed availability of replacement parts as "very important," followed by just-in-time delivery and technical support.
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