Fact: “42.7% of all statistics are made on the spot.”
Though Steven Wright has a humorous angle on statistics, watching any political debate, one would think that he underestimated the amount of “statistics” made up on the spot.
To contrast, here are some actual, research-based statistics that you may find interesting. If you would like to learn more about our supplier information management software and take control of your suppliers with accurate & complete data, view our product pages.
Supplier Data Management
- The bottom quartile of companies spend 60% of their category manager’s time compiling data, where the top quartile spend less than 30%. This equates to $5 million per year in value lost per every billion in spend. (source: The Hackett Group, “World-Class Supply Analytics and Information Management” 2012)
- The lack of consistent, high-quality supplier information is costing the typical Global 2000 company tens to hundreds of millions of dollars – annually!” (source: SpendMatters, “Accurate Supplier Data”, research on averaged ROI–driven business cases entailing on boarding and compliance, operational efficiency, and financial impact)
- At least two-thirds of financial audits will comment on supplier data accuracy. (source: Gartner Research, 2007)
Supply Chain Risk & Disruption
- Roughly 85% of companies experience supply chain disruptions – and the leading cause of these disruptions are adverse weather (51%). Insolvency, on the other hand, caused only 11% of disruptions. (source: BCI survey of 500+ respondents)
- The average cost of a supply chain disruption is $310,000. (source: survey of 500 businesses with revenue between $7.7m and $465m)
- The real number of business bankruptcies is closer to 15% or 16%, versus the “official” 2.3% as reported by the federal bankruptcy courts. (source: Lawless and Warren “The Myth of the Disappearing Business Bankruptcy”)
- A record 735 FCPA enforcement actions were filed in fiscal year 2011 – with over $2.8 billion in associated penalties. (source: SEC)
- Future ongoing costs of complying with RoHS (Restriction of Hazardous Substances Directive) are conservatively estimated to be 0.4% of annual revenues, or €273 per employee per year, with costs to SMEs considerably higher. (source: “Study of the RoHs and WEE Directives”)
- The estimated cost of Conflict Minerals Reporting compliance will range between $2 – $3 billion, and the annual continuing cost of compliance will be $206 – $609 million. (source: SEC)
After soaking in this reality, some will respond with, “Whew! Glad that’s not us.” Others, those without the proper foundation for supplier communication, process control, and syndication of information, understand the daily struggles, and fears, over trying to keep your organization running smoothly, and effectively – and these statistics demonstrate the pressing concern.
Isn’t it time to give up on hoping that the ERP players will catch up to your supplier management needs?
We think so, and that’s why we’re so passionate about helping the world’s most demanding, large, and complex organizations save money, ensure compliance, and mitigate risk through advanced supplier management techniques. Though the proof of the pudding is in the eating, the statistics present a very compelling case for action:
- The average hard-dollar cost savings achieved upon implementing a supplier management initiative is 12%. (source: Aberdeen Group 2012 survey on >130 organizations)
- When it comes to managing supplier information (e.g., certifications, banking details, etc.), companies that take a supplier information management approach, leveraging self-service technology, save an average of $430 per supplier. (source: AMR Research)
Of companies reporting a financial estimate of benefits, the average figure was more than $100 million in incremental value from supplier relationship management. (source: Getting the Most out of SRM, Supply Chain Management Review, 2009)