SUMMARY REVIEW: CROSS-INDUSTRY REPORT OF STANDARD BENCHMARKS – 2012

July 31, 2012

The Cross-Industry Report of Standard Benchmarks, published annually by CAPS Research, contains
metric data on commonly referenced benchmarks. By regularly looking at supply management data
collected from different industry sectors, CAPS Research provides core metrics ranging from supply
management operating expense as a percent of total spend and managed spend to the percent of spend
with qualified socioeconomic program suppliers. Key to the success of this benchmarking program is
CAPS Research’s ability to work with different organizations within different industry sectors to collect
and analyze performance data, and subsequently publish the Cross-Industry Report of Standard
Benchmarks on a regular basis.

The most recently published Cross-Industry Report (July 2012) is available on the CAPS Research public
website (www.capsresearch.org). Starting with this edition, the Cross-Industry Report will be published
annually instead of semi-annually. Updates and comparative reports will be provided to CAPS Research
sponsors and benchmark program sponsors on-demand. Industry-specific breakout reports are available
to CAPS Research corporate sponsors and companies who participate in (and support) the
benchmarking program. The decision to publish the Cross-Industry Report annually will likely result in a
larger number of participants across the different industry sectors. Reporting annually will also provide
additional opportunities for CAPS Research to develop detailed comparative reports.

If you are a regular subscriber or participant you will notice some key changes to the overall metric
report this year:

a. The industry sectors are on the horizontal plane with represented data in columns, and the
benchmarks (1 through 20) are represented on the vertical plane. The Average of Averages data
is found in the last column on the right side of the report.
b. Two new benchmarks provide information on the percent of supply management employees
that are strategic employees (benchmarks 4 and 5), and operational employees (benchmarks 6
and 7). Note that benchmarks 5 and 7 report the percent of companies who reported increases
or decreases in strategic and operational employees, respectively. CAPS Research cannot report
the actual numbers of increased/decreased employees because of the varying survey
population.
c. Two benchmarks that were published in the December 2011 report have been removed:
professional training hours per supply management employee (formerly benchmark 12), and
supply management group retention (formerly benchmark 13).

Copyright © 2012 Institute for Supply Management™ and W. P. Carey School of Business at Arizona State University.
All rights reserved.
 The 2012 edition of the Cross-Industry Report of Standard Benchmarks includes data provided by 153
different organizations representing 12 different industry sectors. Survey participants who could not be
assigned to a unique industry sector are included in ‘Other Industries’. Industry breakout reports for
each of the industry sectors measured have been provided to CAPS Research corporate sponsors and
are published on Knowledge Central (www.capsknowledge.org), our sponsor-only website. The industry
breakout reports will not be published on the CAPS Research public website (www.capsresearch.org).

Below is a review of the Cross-Industry benchmarks published in 2010, 2011, and 2012.

Average of Averages
No. Cross-Industry Benchmark
2012 2011 2010
1 Supply Management Spend as a Percent of Sales/Revenue 47.14% 46.83% 46.61%
2 Percent of Spend Managed/ Controlled by Supply Management 83.39% 81.45% 82.16%
3 Supply Management Employees as a Percent of Company Employees 1.76% 1.80% 1.57%
4 Percent of Supply Management Employees that are Strategic 41.08% 38.07% 38.21%
Percent of Companies Reporting an Increase in Strategic Supply Management 32.29%
Employees
5
Percent of Companies Reporting a Decrease in Strategic Supply Management 22.65%
Employees
6 Percent of Supply Management Employees that are Operational 58.88% 61.92% 61.71%
Percent of Companies Reporting an Increase in Operational Supply Management 31.80%
Employees
7
Percent of Companies Reporting a Decrease in Operational Supply Management 26.24%
Employees
8 Supply Management Operating Expense as a Percent of Spend 0.95% 0.96% 0.86%
9 Supply Management Operating Expense per Supply Management Employee $129,660 $123,371 $119,185
10 Supply Management Spend per Supply Management Employee ($ Million) $22.76 $21.12 $21.44
11 Managed Spend per Supply Management Employee ($ Million) $16.98 $15.55 $16.37
12 Percent of Total Spend via pCards 1.49% 1.16% 1.39%
13 Training costs per Supply Management (FTE) Employee $912 $778 $795
14 Cost Reduction Savings as a Percent of Managed Spend 2.51% 2.33% 3.40%
15 Cost Avoidance Savings as a Percent of Managed Spend 2.79% 1.96% 1.99%
16 Average Purchase Order Processing Cost $396 $429 $351
17 Average Cycle-Time (days) from Requisition Approval to P.O. Placement (Direct) 8.85 10.43 7.23
18 Average Cycle-Time (days) from Requisition Approval to P.O. Placement (Indirect) 7.24 5.75 4.86
Percent of Active Suppliers Accounting for 80 Percent of Supply Management 6.18% 6.14% 6.85%
19
Spend
20 Socioeconomic Program Spend as a Percent of U.S. (only) Spend 13.61% 11.03% 10.23%

For more information about CAPS Research and our unique benchmarking programs, contact the
benchmarking team at metrics@capsresearch.org.

Copyright © 2012 Institute for Supply Management™ and W. P. Carey School of Business at Arizona State University.
All rights reserved.
 CAPS Research
Cross-Industry Report of Standard Benchmarks

July 2012

Aerospace/ Chemical DOE/NNSA Engineering/ Financial Industrial Metals/ Transportation Other

Defense Manufacturing Contractors Construction Services Manufacturing Mining Petroleum Pharmaceuticals Semiconductor Services Utilities Industries Average of Averages

1 Total spend as a percent of sale/revenue dollars 48.27% 64.61% 46.72% 64.33% 17.51% 57.90% 47.99% 40.03% 63.55% 52.43% 30.09% 44.27% 35.14% 47.14%

Percent of total spend managed/controlled by supply

2 93.27% 84.70% 99.58% 94.08% 70.31% 89.85% 79.63% 77.15% 65.43% 97.52% 77.78% 77.02% 77.78% 83.39%
management

Supply management employees as a percent of company

3 3.69% 1.29% 1.80% 3.44% 0.29% 1.93% 1.29% 3.86% 0.91% 1.07% 0.71% 2.04% 0.55% 1.76%
employees

4 Percent of supply management employees that are strategic 23.90% 46.69% 59.38% 14.45% 60.45% 42.32% 44.00% 28.77% 58.91% 40.12% 35.06% 30.26% 49.71% 41.08%

Percent of companies that reported an increase in supply

25.00% 20.00% 0.00% 50.00% 0.00% 61.54% 37.50% 43.75% 33.33% 33.33% 40.00% 35.29% 40.00% 32.29%
management strategic employees
5
Percent of companies that reported a decrease in supply
31.25% 60.00% 50.00% 0.00% 25.00% 7.69% 0.00% 18.75% 16.67% 33.33% 20.00% 11.76% 20.00% 22.65%
management strategic employees

Percent of supply management employees that are

Cross-Industry Comparison of Standard Benchmarks

6 76.10% 53.31% 40.36% 85.55% 39.55% 57.68% 56.00% 71.13% 41.09% 59.88% 64.94% 69.51% 50.29% 58.88%
operational

Percent of companies that reported an increase in supply

43.75% 40.00% 14.29% 33.33% 12.50% 38.46% 37.50% 50.00% 33.33% 33.33% 20.00% 23.53% 33.33% 31.80%
management operational employees
7
Percent of companies that reported a decrease in supply
31.25% 40.00% 71.43% 16.67% 25.00% 7.69% 0.00% 18.75% 16.67% 33.33% 20.00% 47.06% 13.33% 26.24%
management operational employees

Supply management operating expense as a percent of total

8 2.34% 0.43% 2.17% 0.34% 0.98% 0.55% 0.78% 0.53% 0.78% 1.02% 0.79% 0.72% 0.95%
spend

Supply management operating expense per supply

9 $117,002 $141,123 $117,649 $116,805 $109,572 $113,576 $132,590 $158,149 $185,991 $126,413 $110,957 $132,487 $123,265 $129,660
management employee

10 Total spend per supply management employee (millions) $7.19 $34.43 $6.22 $6.62 $30.75 $12.44 $37.02 $34.29 $39.42 $20.01 $23.61 $21.48 $22.40 $22.76

Managed spend per supply management employee

11 $6.46 $28.89 $6.18 $6.25 $22.98 $10.67 $26.21 $24.94 $23.14 $19.47 $12.38 $15.48 $17.49 $16.96
(millions)

12 Percent of total spend via pCards 0.67% 0.39% 4.89% 0.70% 2.83% 0.41% 0.38% 0.87% 1.02% 0.79% 1.75% 1.61% 3.09% 1.49%

Annual spend on training per supply management

13 $622 $541 $768 $359 $491 $1,261 $456 $1,346 $2,613 $883 $741 $858 $912
employee

14 Cost reduction savings as a percent of managed spend 2.87% 0.94% 3.63% 1.58% 1.25% 2.99% 2.35% 4.29% 3.66% 1.95% 2.13% 2.51%

15 Cost avoidance savings as a percent of managed spend 3.16% 5.47% 2.39% 0.89% 1.72% 1.61% 3.14% 1.72% 4.99% 2.79%

16 Average purchase order processing cost $629 $253 $255 $115 $167 $852 $203 $301 $991 $356 $237 $396

Average cycle time (in days) from requisition approval to PO

17 8.12 34.80 4.39 8.94 9.84 1.48 3.63 6.15 2.28 8.85
placement for direct goods

Average cycle time (in days) from requisition approval to PO

18 6.71 14.25 5.65 2.44 4.10 21.03 2.62 6.88 4.71 4.04 7.24
placement for indirect goods and services

Percent of active suppliers that account for 80% of total

19 6.68% 5.09% 9.71% 13.28% 6.97% 6.33% 5.46% 4.59% 5.03% 3.90% 2.72% 3.84% 6.75% 6.18%
spend

Percent of spend with qualified socioeconomic program

20 24.56% 33.61% 8.48% 5.65% 9.72% 10.49% 10.66% 5.72% 13.61%
suppliers

Data Year: 2011

Release Date: July 31, 2012

Copyright © 2012 Institute for Supply Management™ and W. P. Carey School of Business at Arizona State University.
All rights reserved