Formal Supplier Performance Measurement Programs Yield 20% Supplier Performance Improvements, says New Aberdeen Report; 49% of enterprises that lack formal SPM programs will deploy one within 12 to 24 months

Business Wire, Oct 12, 2005

BOSTON -- Companies that deploy formal supplier performance measurement (SPM) programs improve supplier performance by more than 20%, on average, according to new AberdeenGroup research. The "Supplier Performance Measurement and Improvement Benchmark Report" confirms that enterprises with formal SPM programs raised supplier performance levels significantly more than counterparts who don't.

This research also suggests that how the program was deployed -- and how long it has been implemented -- affected performance improvement levels. Other key findings include:

--Enterprises with SPM programs in place for more than 18 months reported greater performance improvement than those with programs in place less than 18 months.

--SPM programs that are standardized at the divisional level outperformed programs standardized at the plant level or across the enterprise.

--Enterprises measuring more than 20% of the total number of suppliers saw greater performance improvement than enterprises measuring 20% (or less) of theirs.

Research results also revealed that only 50% of enterprises now have formal SPM programs in place; this is approximately the same rate revealed in similar research from 2002. However, approximately half of the enterprises lacking formal SPM programs report that they'll move to adopt a program over the next 12 to 24 months.

"This research clearly proves the value of supplier performance measurement," said Kevin Fitzgerald, Aberdeen's vice president of supply management research and author of the report. "Today, supply value is more critical to business success than ever before, so it's imperative that supply executives take positive steps to design and deploy SPM programs and technologies."

Research also shows that current SPM users plan to aggressively expand and improve their programs in a variety of ways, including the use of new technology deployments.

To obtain a complimentary copy of the "Supplier Performance Measurement and Improvement Benchmark Report," follow this link: http://www.aberdeen.com/link/sponsor.asp?cid=1967

About AberdeenGroup, Inc.

Aberdeen provides fact-based research and insights focused on the technology-driven global value chain. Aberdeen's benchmarking, market and solution assessments, sales acceleration programs, and conferences support Global 5000 value chain and technology executives and the solution providers who serve them. For more information, visit www.aberdeen.com or call 617-723-7890.