Manufacturers shun e-procurement

19 June 2002
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20 June 2002 | Robin Parker

Disappointment with current e-procurement technology and resistance to change are hindering e-business take-up in the manufacturing sector, a CIPS-backed study has found.

Only 2.5 per cent of manufacturers regularly use the Internet to make purchases, and nearly half do not plan to buy online in the next year, according to the twice-yearly Cap Gemini Ernst & Young (CGEY)/CIPS UK Manufacturing E-Commerce Survey.

While most companies tend to browse suppliers' catalogues, two-thirds have collaborated with these suppliers exclusively offline.

The findings follow a Confederation of British Industry survey that found that although one in eight UK firms had fully automated business processes, nearly four-fifths made less than 5 per cent of their purchases online.

The CGEY report found that only 1 per cent of manufacturers regularly used e-auctions, and 12 per cent used them occasionally. Nearly three-quarters had no intention of using them at all in the next year.

Manufacturers have attributed low customer demand, a "wait and see" attitude among management and the desire to wait for improved technology as the main impediments.

Two-thirds of purchases made by the 367 companies in the past six months were for indirect services and goods, and only seven of the 25 most popular websites were specific to the manufacturing sector.

John Crampton, vice-president of CGEY, said: "Every client a year ago was talking about 'e' as part of its strategy, and by now we'd have expected take-up to have accelerated more."

"Manufacturing is sticking to the established networks, and fewer goods are bought online than are researched online."

SMjun2002

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