CHICAGO, IL -- (Marketwire) -- 08/10/10 -- CVM Solutions, a premier provider of supplier management solutions, today released results from the 2010 CVM Global Supplier Study, a multi-year analysis of suppliers to Fortune 1000 companies, which identified the world's most relevant and highly used suppliers.

The study found that there were approximately 4.9 million unique suppliers in use by Fortune 1000 companies, of which only 309,790 -- or 6 percent -- were used by two or more companies in 2009. This number has decreased 15 percent from 366,356 in 2008. The study also shows that the number of suppliers is decreasing at a faster pace in the first half of 2010 than previous years; however the full scope of the decline will not be evident until the end of this year. Although the overall trend is downward, CVM also noticed that new suppliers were being added as well; potentially resulting from the fact that customers were ceasing business with weaker suppliers and replacing them with stronger ones.

Other declines in the supplier base were also noted upon review of the study data. For example, the number of unique supplier families dropped to 62,976 in 2009 from 93,038 in the year before, while the number of small and diverse businesses dropped to 851,699 from 1.15 million during the same period. These figures were based on the total population of common suppliers.

The findings from the 2010 CVM Global Supplier Study come at the same time that the company announced CVM Supplier Central™ 10, the next generation supplier management solution. The results of this study were instrumental in guiding the features delivered in Supplier Central 10.

Key Findings and Necessary Actions

• Shrinking Supplier Base -- The number of highly used suppliers has continued to decline since 2008. The remaining suppliers may struggle to support increasing customer demand over the coming years.

• Increased Consolidation -- Supplier consolidation continues to increase, as evidenced by the fact there are fewer unique supplier corporate families. The two primary reasons for this trend: smaller independent suppliers are discontinued or go out of business and mergers reduce the number of parent companies as larger companies acquire smaller suppliers.

• Continued Challenges for Small and Diverse Businesses -- Fortune 1000 spending with small and diverse businesses is under pressure, as the number of these suppliers continues to decline. CVM's findings support recent media reports that show how challenging the business environment continues to be for small and diverse suppliers.

• Mitigating Supplier Issues -- The worldwide economy continues to struggle, resulting in ongoing shrinkage in the overall number of suppliers. As this trend continues, Fortune 1000 companies must be diligent in managing their suppliers. CVM offers the following recommendations to navigate the trends identified:
  • Companies should increase diligence on collecting and managing supplier information across the entire supplier base. Even non-strategic suppliers can cause disruptions if not managed appropriately.
  • Companies should investigate the corporate family linkage of their suppliers on a quarterly basis to keep up with the rapid changes to supplier structures.
  • Companies should have continual access to an updated directory of businesses so they can discover new suppliers and potentially leverage innovative small and diverse companies in an effort to mitigate risk through diversification.
  • Companies should carefully monitor trends in their supplier base to enable rapid decision making in response to market changes.

Supporting Quote

• Mike Anguiano, Chairman, CVM Solutions -- "The findings of our 2010 study show that the overall number of relevant and highly used suppliers is significantly smaller than many believed. We also noticed that, despite the disappearance of certain suppliers, a new crop of suppliers was being added. This trend leads us to believe that there is a Darwinian effect occurring in the supply chain as Fortune 1000 companies cut weaker suppliers and replace them with stronger ones. At CVM, we know the value of this level of supplier intelligence and are committed to empowering our customers to meet the challenges posed by the changing supplier landscape with clean, accurate data in a centralized supplier repository. CVM Supplier Central 10 is an exciting, comprehensive solution empowering our customers to turn supplier information into actionable intelligence, thereby helping them to navigate the evolving supplier landscape."

Resources and Links

• Press Release: CVM Solutions Revolutionizes Supplier Management with Launch of Supplier Central™ 10

• Watch the Webcast -- Connecting the Dots on Suppliers with executives from Procter and Gamble, Forrester Research and CVM Solutions

• CVM Supplier Central 10 on the AppExchange

• Follow us on Twitter @CVMSolutions, connect via LinkedIn, and become a fan on Facebook

About the 2010 CVM Global Supplier Study
CVM Solutions' multi-year supplier analysis project focused on vendors in use by multiple Fortune 1000 companies. The data was derived from more than 280 CVM customers dating back to 2004, including more than 17 million supplier records. In addition to identifying relevant suppliers and the frequency of use by their customers, the analysis also identified usage patterns by industry and other metrics such as category codes, geography, diversity status, etc.

About CVM Solutions
CVM Solutions is the premier provider of supplier management solutions that enable clients to achieve operational excellence, drive cost savings and mitigate supplier risk. CVM's innovative technology and the industry's leading supplier database provide truly unique capabilities for supplier management. With vast supplier intelligence, deep experience and customer-focused results, CVM has helped more than half of the Fortune 100 realize tangible benefits. For more visit www.cvmsolutions.com.

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