- Consolidation continues. Distribution consolidation is accelerating in electrical products, floor covering products, foodservice and industrial supplies.
- Suppliers fight reverse auctions. Savvy suppliers are either opting out of reverse auctions or developing counter strategies like alliances, market differentiation, and bundling value-added services.
- Partner Relationship Management software market booms, but hype may exceed reality. PRM systems may be too costly for many installations, plus the initial investment, integration and ongoing maintenance costs will reduce the ROI.
- E-procurement initiatives stall. Corporate buyers will concentrate more purchases with fewer suppliers, apply stringent supplier selection criteria and increase efforts to enforce internal compliance with national supplier agreements.
- The Internet's impact on distribution channels begins to clear. Online ordering will continue growing but will still represent less than 15% of transaction volume in most channels. More than 50% of buyers in B2B supply chains will use the Internet primarily for order tracking, inventory management, product information and order accuracy.
For more information, visit www.PembrokeConsulting.com. To order Facing the Forces of Change, visit www.nawpubs.org.
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