ISM Releases New Outsourcing Survey Results

FOR RELEASE: February 17, 2004

CONTACT: Kristen Kioa
  ISM Media Relations
  800/888-6276 ext. 3015

(Tempe, AZ) — The Institute for Supply Management™ recently released the results of an outsourcing survey, conducted at the request of the Department of Commerce, taken to determine the impact of outsourcing/offshoring jobs. The survey was distributed to nearly 450 chief purchasing and supply officers in manufacturing and non-manufacturing organizations who were asked to respond to questions pertaining to their production, employment, relocation activities and suppliers. Close to 23 percent, or just over 100, responses were received.

Survey results indicated that 35 percent of respondents moved production activity, defined as production of goods or performance of services, outside of the United States in the past year. The outcome of this move resulted in the loss of over 4,200 jobs. Labor costs were the most cited reason for outsourcing. Additionally, in about two-thirds of companies that outsourced activities, information technology was cited as playing an "important" or "very important" role in the decision to relocate; transportation costs played such roles in less than half the cases.

The two countries that more than half of the respondents relocated their production activities to were China and India. The survey also found that four percent of the companies moved their production activity into the United States from suppliers abroad in the past year. Of the US companies that outsourced production activity, many expect to outsource fewer jobs in the coming year. There was no definitive link made between the firm's employment size and the likelihood of outsourcing jobs.

Founded in 1915, the Institute for Supply Management™ (ISM) is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities, and education. ISM's membership base includes more than 45,000 supply management professionals with a network of domestic and international affiliated associations. ISM is a not-for-profit institute that provides opportunities for the promotion of the profession and the expansion of professional skills and knowledge.

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