SOURCE: Aberdeen Group, a Harte-Hanks Company

April 05, 2007 11:06 ET

Supply Risk Increasing While the Market Stands Still

Although 62% of Enterprises Expect Supply Risk to Increase, Only 49% Have Implemented a Supplier Performance Measurement and Risk Management Program

BOSTON, MA -- (MARKET WIRE) -- April 5, 2007 -- Although the majority of enterprises realize the inherent danger of supply risk, many organizations simply do not place a high-enough priority on risk management, according to a new report by the Aberdeen Group, a Harte-Hanks Company (NYSE: HHS).

Supply Risk Increasing While the Market Stands Still found that leading procurement and supply management executives are faced with significant pressure to minimize the financial impacts of supply disruptions, while also insulating customers addressing increased market tightening and regulatory concerns for these same risks. Drawing research culled from over 210 companies, the report discovered that Best in Class enterprises are 54% more likely than their peers to identify supply risk as a high priority for corporate action and nearly one-third have had programs in place for more than three years.

"Supply risk can never be zeroed out," said lead author and Aberdeen Research Analyst William Browning. "Therefore it must be addressed head-on starting with the right risk metrics, using the right tools, and then following through with action plans to mitigate risk as much as possible. Organizations can lose millions of dollars in the short-term and possibly their customers over the long-run."

Best in Class enterprises, which have successfully developed supplier performance and risk management programs, have seen vital performance advantages, such as:

--  Measuring 51% or more of their supply base (of which 70% engage in
    supplier performance measurement risk management at this level)
    
--  Achieving 20 to 45% greater efficiency in managing risk against key
    performance indicators such as supply disruptions, supply concentration,
    supplier financial viability, and financial impact of supply disruptions
    
--  85 to 92% effectiveness in managing quality of goods and services, on-
    time delivery, price competitiveness, and supplier service
    
Aberdeen recommends that enterprises looking to achieve these Best in Class benefits should reorganize their supply risk program management into a cross-functional ownership mode to enhance visibility, as well as utilize contract-hedging and other "insurance" tools to mitigate risk and limit the financial impact of disruptions.

A complimentary copy of this report is made available due to the following underwriters: Procuri, Browz, Centric Software, and D&B.

Download a complimentary copy of The Supplier Performance and Risk Management Benchmark Report; please visit: http://www.aberdeen.com/link/sponsor.asp?cid=3941

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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