Running the Numbers: December 2006/January 2007

The latest facts, figures and benchmarking data in RFID, Diversity Procurement, Global Supply Chain and Sourcing/Procurement


Radio Frequency Identification

RFID-based MRO Strategies Spell Efficiency, Security for Aerospace and Defense Supply Chains

Aerospace and defense companies are increasingly looking for ways to gain competitive advantage through the enhanced management of supply chains and assets, and they increasingly are turning to radio frequency identification (RFID) technologies, according to a new report from ABI Research. In particular, A&D companies are looking to expand the use of RFID to manage maintenance, repair and overhaul (MRO) operations in their manufacturing environments.

Given the one-off equipment maintenance and supply chain management focus of most A&D organizations, an integrated MRO supply chain strategy with linkages between in-line equipment performance and supplier capability is critical. An integrated MRO supply chain can improve service performance in a manufacturer's storeroom by simplifying inventory, purchasing and other business processes, ABI reported.

In addition, integrated supply allows the centralization of all sourcing, procurement, receiving, internal distribution and service to one supplier. The full benefit of integrated supply is achieved when all MRO supply chain functions are outsourced, thereby allowing a plant to better focus on its core competencies.

"Integrated MRO strategies based on RFID tagging can deliver marked efficiencies to the processes of locating parts, tools and materials, and to producing the significant amounts of documentation required to meet regulations in the aerospace and defense industry," noted ABI Research Director Michael Liard. "RFID is an enabling technology that can facilitate a shift from corrective to predictive maintenance strategies."

ABI projects that by 2011 the A&D RFID market will realize revenue in excess of $2 billion.

Diversity Procurement

Women Businesses Gaining Ground with Corporate Purchasing Managers

According to a recent study commissioned by the Women's Business Enterprise National Council (WBENC), an advocate of women-owned businesses as suppliers to corporations and large government organizations, women-owned businesses are beating the industry average of keeping and growing corporate contracts.

Forty percent of WBENC's corporate members increased their spending by at least 10 percent over the last three years with women-owned firms, which is 16 percent above the average provider.

Not only are women-owned businesses gaining more ground, they are losing less when budgets are cut or the supply chain tightens, according to the study conducted by the Center for Women's Business Research. On average, 24.5 percent of corporations decreased their spending with suppliers, but only 14 percent cut contracts with women-owned providers.

The study indicated that there is competition for those corporate dollars within the community of women-owned firms. According to the study, the bulk of corporations — 59 percent — concentrate their spending with fewer than 200 women-owned businesses. Only 18.9 percent spend with 200 to 499 women-owned businesses and only 21.6 percent with 500 or more.

Other key findings:

  • 82 percent of corporations said that global procurement has had no effect or a positive effect on their suppliers that are women-owned businesses
  • 76 percent of corporations say their supplier diversity programs are too small
  • 82 percent of corporations have supplier diversity advocates in different areas of the company
  • 94 percent send supplier diversity representatives to women's business conferences and trade fairs
  • 67 percent of corporations have a budget of $199,000 or less for their supplier diversity programs
  • 81 percent of corporations do not discuss their supplier diversity programs in their annual reports
  • 45 percent of CEOs are involved in setting and communicating diversity policies and goals

Seventy-seven WBENC corporate members participated in the online survey programmed and administered by the Center for Women's Business Research.

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