Quality Magazine

Manufacturers Invest in E-Commerce

June 1, 2003

WASHINGTON, D.C.—Despite the recession, manufacturers are continuing to invest in e-commerce initiatives, according to a survey by the National Association of Manufacturers (NAM) and Ernst and Young LLP.

“Manufacturing e-business has survived its first recession,” says Jerry Jasinowski, NAM president. “It is clear that individual and corporate customers are the most important constituency for e-business initiatives by manufacturers. But at the same time, today’s difficult economic environment has made cost and productivity the number one priority.”

Nearly half the respondents, 47%, said their customers were not ready for e-business, because of the complexity of the process and the lack of integration standards. “Many manufacturers must maintain both manual and on-line processes to accommodate those customers who are not electronically connected,” says Mike Hanley, leader of Ernst and Young’s automotive manufacturing practice. “This means that those suppliers cannot fully realize cycle time reductions and cost reductions that e-commerce promises to deliver.”

On the other hand, the survey also found that the number of manufacturers selling 6% or more of their goods to consumers or other companies through Internet transactions quadrupled in the past year, to nearly one-fourth of all respondents. In addition, some 33% of companies plan to increase their investment in e-commerce initiatives in the coming year.