Study: Bulk Industry Eschews 'Net in Supply Chain

A reluctance to increase their Internet use is preventing bulk-industry companies from improving their supply-chain processes, according to survey results released Friday.

Many of the supply-chain problems cited by survey respondents could be addressed using Internet-based logistics systems. But most respondents haven't implemented these systems because they are concerned about security, cost, the complexity of integration with existing systems and the quality of available systems.

For the survey, 142 logistics executives from bulk-industry distributors, manufacturers and traders were polled, mostly U.S.-based companies. Bulk-material industries include chemicals, steel, oil and paper. Mercer Management Consulting Inc., based in New York, conducted the survey and analyzed the data.

About 80 percent of respondents said they are "dissatisfied" with their companies' supply-chain operations. Four of the top five areas of discontent are faulty communications, erratic documentation, heavy dependence on paper and poor customer service, problems which "lend themselves to Internet solutions," according to the survey's executive summary.

Although 75 percent of respondents said they use the Internet or EDI (electronic data interchange) for some supply-chain activities, few of these Internet operations significantly impact their logistics processes, the survey found.

"The Internet is pervasive for passive tasks: viewing schedules, tracking shipments, and shopping for vendors. (But) only a few players are using the Internet to radically alter system economics through asset sharing and capacity auctions," according to the survey's executive summary.

For example, 70 percent of respondents do not use the Internet to "quote, book and invoice" and 85 percent do not use the Internet for what the survey authors call "value-added financial services" such as financing and insurance.

The survey was co-sponsored by Optimum Logistics Ltd., a vendor of Internet-based logistics systems, and by the Journal of Commerce Inc., a publication that covers the transportation of goods and commodities.

More information about the survey can be found at http://bulksurvey.advancedsolutions.com/. Mercer Management Consulting can be reached at http://www.mercermc.com/.

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