Manufacturers ignore Web benefits

UK manufacturing companies are holding back on using Web-based services for procurement specific to their sector, according to...

UK manufacturing companies are holding back on using Web-based services for procurement specific to their sector, according to research published by consultancy Cap Gemini Ernst & Young.

Manufacturers are overwhelmingly using the Web for indirect purchases rather than direct goods - items that support production rather than those directly fed into the manufacturing process - the research shows.

Cap Gemini's biannual survey of UK manufacturing, found that 40% of the UK's industrial firms were using e-commerce in some form but often for such goods as IT, travel or stationery. It said that where e-commerce is used, only 25% of manufacturers buy goods direct via the Web, while 66% used the Web to buy travel services.

Only seven of the 25 most popular Web sites were specific to the manufacturing sector, with three of the top five being low-cost airlines.

John Crampton, vice-president of Cap Gemini, said, "The study highlights a failing by manufacturers to adopt e-commerce even where they make tangible savings. The challenge for manufacturing companies will now be to develop their supply chain efficiencies for direct goods. The bulk of costs come from these purchases and improvements here could result in huge savings for companies."

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