Direct Materials Study 2016 - Summary Charts

Supply Chain Insights LLC Copyright © 2016, p. 1

Direct Materials StudySummary Charts

February – September 2016


Agenda

Study Overview Direct Materials Sourcing

Direct Materials Suppliers

Technology Providers

Supply Chain Performance


Study Overview


Respondents Work Primarily in a Discrete Industry andAverage 12K Employees and $5.4B in Revenue


Most Common Industries Are Auto/Heavy Equipment, Industrial Manufacturing, and Medical Devices


Respondents Are Primarily in Executive Management or Supply Chain and Based in North America


Agenda

Study Overview

Direct Materials Sourcing Direct Materials Suppliers




Two-Thirds of Respondents are Highly Involved in Process of Selecting and Managing Direct Materials Suppliers


The Most Common Spend Category for RespondentsIs Electronics


Three Quarters Feel Involved in Decision MakingAbout Purchasing Direct Materials


Having a Seat at the Table for Purchasing Direct MaterialsIs Primarily Related to One’s Department


Procurement, Engineering Design, and Supply Chain AreMost Involved in Direct Materials Purchasing


Two-Thirds Buy Direct Materials Globally


Companies Are Most Able to Make Decisions ThatDrive Total Landed Direct Materials Cost Reductions


Agenda

Study Overview

Direct Materials Sourcing

Direct Materials Suppliers Technology Providers



Innovation and Financial Viability of Direct Materials Suppliers Are the Most Important and Challenging Factors

When Assessing Suppliers


Companies Have Greatest Performance Gaps in Evaluating Suppliers’ Innovation, Financial Viability, and

Manufacturing Quality


Respondents Want to Know More About Supplier Capacity,Quality, Operations, Financials, Costs, Risk, and Customers


Agenda

Study Overview



Technology Providers Supply Chain Performance


SAP/ERP, SAP Ariba, Microsoft Office Tools, andOracle/ERP Are the Top Most Familiar Technologies


Microsoft Office Tools Are Most Common Technologyfor Direct Materials Sourcing / Supplier Management


SAP/ERP Is Most Familiar but Not Most Used


Microsoft Office Tools and SAP/ERP Are Most Valuable Technologies


SAP/ERP and Microsoft Office Tools Are Among MostFamiliar, Used, and Valuable


Less Than Half Consider Their Most ValuableTechnology to Be Effective


Most Valuable Technologies Are Consolidated,Customized, and Flexible


Most Valuable Technologies Have Some Weaknesses:Poor Integration, Hard to Use and Outdated, and

Limited Capabilities


Most Valuable Technologies Perform Highest onEvaluating Suppliers’ Price, Lead Times,

and Delivery Reliability


Most Valuable Technologies Are Underperforming onAbility to Evaluate Supplier Innovation, Design Quality,

Financial Viability, and Manufacturing Quality


Most Valuable Technologies Have Greatest Performance Gaps in Evaluating Supplier Innovation, Financial

Viability, Manufacturing Quality, and Design Quality


Both the Companies and the Most Valuable TechnologiesPerform Best on Evaluating Supplier Price, Delivery

Reliability, and Lead Times


Less Than Half Report a Return on Investment on Most Valuable Technology


Agenda

Study Overview






Visibility Into the Extended Network of Order Managementto Customers Is Area of Greatest Opportunity


Largest Performance Gaps in Visibility Are the Extended Network Order Management and Suppliers


Most Common Areas of Respondents’ Business Pain Are Demand/Supply Volatility, Data Access/Use, Visibility,

Alignment, and Risk


Companies Report Performing Best on Continuous Improvement, Corporate Social Responsibility,

and Supplier Development

Direct Materials Study 2016 - Summary Charts

Business

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