Commodity and components buyers.(Brief Article)

Purchasing, October, 2000

Commodity and components buyers will increasingly use e-marketplaces to control costs of their raw materials in years ahead, says a new study from Forrester Research. "These buyers are eager to move online," says analyst Jim Walker at Forrester Research. "Buyers will intensify competition for their existing contracts.

As pricing indexes emerge, firms will adopt shorter-term, flexible contracts and will use financial products like swaps and options to control volatility." Walker says raw materials purchasers will use online venues to increase their control over upstream suppliers by intensifying competition, unbundling supply chains, transitioning to spot markets, and managing price volatility.