The scoop on supply base rationalization in the CPI
Staff -- Purchasing, 4/4/2002
- Four in ten CPI buyers say they have cut their number of chemicals suppliers in the past two years by an average of nearly
- Among big companies, the number rises to five in ten, but the going is slower with an average cut of just 16%.
- Smaller, more agile companies, while less likely to be reducing their supply bases, tend to work faster, cutting nearly 20% of their supply bases in the past two years.
- Among companies planning more rationalization through 2004, the average anticipated cut is 16%.
- Industry segments most actively rationalizing their supply bases in the past two years include personal care, food and beverage, and fuels and petrochemicals. For the coming two years, makers of agricultural chemicals will be the most aggressive at supply base reduction.
- Nearly all CPI buyers (96%) surveyed by PURCHASING say cost and quality are important criteria in their rationalization decisions. Inventory services and supplier location are important to many buyers. Global capabilities are important to bigger buyers, less so to smaller buyers.
- Cost is the most important criterion with a majority (64%) of big-volume buyers. Quality is the most important criterion with a majority (51%) of smaller volume chemical buyers.
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