CAPS studies spending in food, beverage industries
By Staff -- Purchasing, 11/4/1999
To enable purchasing professionals to evaluate the purchasing performance within their companies, the Center for Advanced Purchasing Studies (CAPS), a not-for-profit research organization affiliated with both the National Association of Purchasing Managers (NAPM) and the Arizona State University School of Business, has released two new Benchmarks studies on the food manufacturing and beverage industries.To determine these benchmarks, CAPS surveyed nine of the top North American food manufacturing firms (annual sales of $3.95 billion), and eight top beverage makers (average annual sales of $2.4 billion).
Some results of the studies follow:
Total department purchase dollars. In the beverage industry, total purchases as a percentage of sales averaged 51.7%. A breakdown of purchases includes, ingredients purchases (8.5%), packaging materials (20.9%), capital equipment (4.6%), information technology capital purchases (0.7%), sales and marketing purchases (6.3%), and office supplies (0.3%).
In the food manufacturing industry, total purchasing dollars accounted for an average of 35.2% of sales. Capital equipment and construction expenses comprise 2.6% of the total spend, food ingredients purchases 19.8%, MRO purchases 1.2%, outside services 1.1%, packaging materials 6.6%, and other purchases 2.3%.
Purchasing employees per annual sales. In the beverage industry, there was one purchasing employee for every $234.6 million of sales. In food manufacturing, there was one purchasing employee for every $76.1 million in company sales.
Purchasing employees per active suppliers. In the beverage industry, there was one purchasing employee for every 92 active suppliers. In addition, it cost an average of $3,070 to operate the purchasing function for each active supplier. Food industry data shows one purchasing employee for every 82.7 active suppliers. Here, it cost an average of $3,400 to operate the purchasing function for each active supplier.
Number of active suppliers. During the 12-month reporting period, the number of active suppliers in the food industry decreased by 1.5% for total purchases, increased by 0.5% for capital equipment purchases, decreased by 8.9% for food ingredients, increased by 2.3% for MRO purchases, and decreased by 2.1% for packaging materials purchases.
For the same time period, the number of active suppliers in the beverage decreased by 3%, according to the study. Of the eight beverage companies that responded, two said their active suppliers had increased, three said their number of suppliers had decreased, and three reported no change. In contrast, a 1994 CAPS study reported a decrease of 8.5% in the number of active suppliers for the beverage industry over a one-year period.
Purchasing training. In the food manufacturing industry, professional purchasing employees received an average of 40 hours annually of training. In the beverage industry, there were 58 annual hours of training per purchasing employee.
Electronic commerce. According to the studies, 34.8% of invoices were processed using a form of electronic commerce. Electronic commerce was also used in 45.5% of payments/EFT, 49.2% of purchase releases, and 23.3% of requisitions.
In the food manufacturing industry, electronic commerce was used to process 34% of total purchase transactions. Autofax was used in 14%, EDI was used in 37%, and procurement cards were used in 10% of purchase transactions.
Also, of all active suppliers to the beverage industry, 9.8% accounted for 90% of total purchases. However, 90% of total purchases in the food manufacturing industry was with 34.4% of active suppliers.
CAPS may be contacted at (480) 752-2277, or at www.capsresearch.org.
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
Now Playing:
