Aberdeen Group, a provider of technology market consulting and research, and iSource Business, a supply and demand chain multitiered media company, announced today the release of “The Supplier Performance Measurement Benchmarking Report: Measuring Supply Chain Success.”

In November 2002, Aberdeen Group's supply chain research practice and iSource Business examined the supplier performance measurement practices of procurement and supply chain executives across multiple industries and geographies. The findings of this joint research effort are contained in “The Supplier Performance Measurement Benchmarking Report: Measuring Supply Chain Success.” Overall, the research findings clearly signal that measuring supplier performance is a critical activity that is suboptimally managed at most organizations.

"An increased reliance on external supply partners to mange a larger portion of product content and business processes has only increased the need for companies to improve their ability to track measure, and analyze supplier performance," said Tim Minahan, vice president of Supply Chain Research at Aberdeen, and coauthor of the report. "Unfortunately, most companies continue to exhibit inadequate and inconsistent supplier performance measurement procedures. Such factors are putting businesses at risk of inflated costs and performance disruptions at a time when every dollar counts."

Supplier performance measurement is the process of measuring, analyzing and managing supplier performance for the purposes of reducing costs, mitigating risk and driving continuous improvements in value and operations. Common and consistent measurements can help companies focus resources, identify performance glitches, develop strategies for supply chain improvements and determine the total cost of ownership (TCO) of supply relationships, products and entire supply chains. The joint Aberdeen/iSource study found that enterprises applying consistent performance measurements and procedures were able to improve supplier performance by 26 percent, on average.

"Global competition, mass customization, heightened customer expectations, and harsh economic conditions are forcing companies to rely more on external suppliers," said Julie Murphree, editor in chief at iSource Business. "Suppliers are contributing a larger portion of parts, materials, and assemblies to finished products and are managing a growing number of processes and functions that were once controlled by their customers' organizations."

“The Supplier Performance Measurement Benchmarking Report: Measuring Supply Chain Succes” examines the increased requirements for effective performance measures; benchmarks current performance measurement processes on an industry, geographic and company-size basis; and identifies emerging "best practices" for effective supplier performance measurement. The full report is available at http://www.supplychainaccess.com/pubs/ERA-iSource.htm.

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