The economy will continue to improve through 2002 and electronic sourcing technology will play an increasing role. These were the two big themes at last month's Institute of Supply Management annual conference in San Francisco. Sixty-three percent of supply executives say the second half will outperform the first half, according to Norbert Ore, chairman of the ISM Manufacturing Business Survey Committee. Only 9% see the economy declining. That's the strongest showing of optimism in the study since 1972.

There are a few red flags. The biggest is an 8.7% projected decline in capital expenditures this year, a sign that when the economy goes back into boom mode there may not be enough capacity to meet demand. Rising healthcare costs, import restraints on steel and potential for energy spikes are also concerns.

Despite the much-reported Internet crash, there is a steady march of technology implementation in the guts of purchasing. In a benchmarking study reported at ISM, Ariba said the number of active users, active suppliers and purchasing volume on its digital networks is up more than 100% year-to-year. Spearheaded by the Center for Advanced Purchasing Studies ( CAPS) in Tempe, Ariz., the benchmarking project now includes PeopleSoft, Ariba, CommerceOne, Arizona State University and i2. Early analysis shows that some technology implementations are stalled by excessive focus on catalogs and lack of visibility through the enterprise. D. Stephen Wade of CAPS says the project is designed to yield best practices to encourage even faster growth of e-sourcing.

In this issue, we feature another major CAPS initiative, Project 10X, headed by one of our contributors, Dr. Robert M. Monczka. Click here  to get an early read on how 10 fold performance improvements could be achieved by 2006.