"Just in Case" Takes Hold

Thomas Register survey: Business interruption concerns driving industrial buyers to build alternate supply networks

New York  March 6, 2003  With war worries and the possibility of terrorist attacks weighing on their minds, many industrial buyers are looking to build alternative supply networks as a hedge against potential business interruptions, according to a new survey by Thomas Register.

In its latest Industrial Purchasing Barometer (IPB) survey, Thomas Register found that one-third (33 percent) of industrial buyers are looking at alternative suppliers as a result of supply-chain disruption concerns due to such factors as a potential war in Iraq and fears of terrorist attacks.

Additionally, just over one-third (34 percent) of the buyers are increasing the number of their suppliers as a result of those concerns, and 65 percent are using the Internet as the primary source for locating alternate suppliers.

The survey showed that these efforts to identify alternate or additional suppliers had the following impact on the buyers' purchasing habits:

  • Increased the number of suppliers&&&&&&.34 percent

  • Decreased costs&&&&&&&&&&&&&..21 percent

  • Buying more from local suppliers&&&&&&..17 percent

  • Changed a primary supplier&&&&&&&&&.8 percent

  • Changed a secondary supplier&&&&&&&&.7 percent

  • Increased costs&&&&&&&&&&&&&&.6 percent

  • No impact&&&&&&&&&&&&&&&&5 percent

Respondents were also asked to identify their primary source for locating alternate or additional suppliers, with the following results:

  • Internet&&&&&&&&&&..65 percent

  • Trade Associations&&&&&&13 percent

  • Offline Buying Directories&&&.9 percent

  • Word of mouth&&&&&&&&8 percent

  • Other&&&&&&&&&&&&5 percent

"The results indicate that the possibility of disruption has impacted the purchasing process as buyers create supply chain back-up," said Ruth Hurd, publisher of Thomas Register. Hurd added, "The search for alternate suppliers has opened their eyes to the power of the Internet."

Thomas Register conducts its IPB survey randomly among its pool of 700,000 opt-in online users. Thomas Register uses its monthly IPB Barometer to track the changing attitudes and behavior of the industrial purchasing community.

For additional insights from past IPB surveys, see the following iSourceonline articles: