75% OF NET TRANSACTIONS NOT RELATED TO ORDER PLACEMENT

Covering the delivery of products through a company's supply chain, the survey tracks order fulfillment and web usage performance of participating organizations across several manufacturing sectors (chemical, pharmaceutical, consumer packaged goods, computers, electronic equipment, telecommunications equipment, semiconductors, aerospace and defense, industrial, and automotive) in North America, Europe, and Asia.

The survey is based on "Level 1" metrics from the industry standard framework SCOR (Supply-Chain Operations Reference-model), developed by management consultancy PRTM in collaboration with the Supply-Chain Council. The participant pool includes blue-chip companies such as 3Com, Amgen, Colgate-Palmolive, Compaq, Ericsson, Hewlett-Packard, IBM, Johnson & Johnson, Merck, Nokia, Siemens AG, Toshiba, and winners of the Malcolm Baldrige National Quality Award.

"The Internet continues to create unprecedented B2B opportunities for companies, apparent in global trade exchanges burgeoning in many industries we surveyed. Companies are blending practices and technology to transform the supply chain from a serial chain of chains to a web of chains," says Steve Geary, chief analyst for PMG's Supply-Chain Management Benchmarking Series. "With the web, communication occurs more frequently, contains more detail, involves more people--from the operator to the CEO--and penetrates more deeply than has been possible before."

PMG's survey shows that while the web is having a dramatic impact on inbound order processes, over three quarters of current web activity is associated with activities other than booked orders: Most of the B2B activities taking place are data exchanges and inquiries. Survey results indicate that today's customer relationships require a great deal of data transfer between companies. Findings show that the web is being used for customers requesting shipment-status notifications and inventory status updates, and that customers and suppliers are exchanging product sales activity data as well as planning and forecasting data over the web. "The web is facilitating collaborative activities," says Geary.

eOrder Fulfillment

According to PMG's survey:

-- During 2000 and 2001, the value of orders placed over the web in the high-tech industry segments is expected to increase sixfold.

-- By the end of 2000, companies anticipate booking 12% of orders via the web, up from 2% in 1998 for most industry segments.

-- Electronic inflows of orders are expected to grow to 47% of orders placed in 2000, up from 27% in 1998?an increase of 50%.

-- As eBusiness orders replace traditional methods (face-to-face sales calls, phone, fax, mail), the percentage of orders using traditional methods is expected to drop from 65% to 50%. PMG anticipates that this drop of one quarter will have continued dramatic impact on the reduction of order-management staffing and costs.

"PMG's survey results show that eBusiness is an increasingly significant business channel within a total supply chain portfolio," says Geary. "Companies are investing heavily in the development of electronic order-receipt mechanisms with far-reaching implications for the entire administrative front-end of the order fulfillment process. Although automation is growing at a rapid rate, PMG's survey indicates that half of all orders placed still arrive in a manner that requires manual order entry. Companies must simplify their order-management processes, properly apply information technology, and continue to meet the customer's needs." The survey finds that best-in-class performance in perfect order fulfillment has improved 5% since the mid-1990s. Geary observes, "The industry is moving to an understanding beyond simple delivery reliability to a holistic view of complete, on-time, and accurate order fulfillment."

Enclosed charts: "Electronic Orders: 1998 vs. 2000" and "Web Communications"; Credit:(c)Copyright 2000, PMG; Source: PRTM's Performance Measurement Group, Deliver Survey, Supply-Chain Management Benchmarking Series.

PERFECT ORDER FULFILLMENT DEFINITION

A perfect order meets all of the following standards:

-- Delivered complete with all items on the order in the quantity requested.

-- Delivered on time to customer's request date, using the customer's definition of on-time delivery.

-- Delivered with complete and accurate documentation supporting the order, including packing slips, bills of lading, and invoices.

-- Delivered in perfect condition with the correct configuration, customer-ready, without damage, and faultlessly installed (as applicable).

BEST-IN-CLASS DEFINITION

The Performance Measurement Group selects the top 20% of a population and averages the results to calculate the best-in-class measure. According to PMG, no organization can be best-in-class in all categories. Leaders must focus on points of competitive leverage and relegate other aspects of strategy to reasonable but not necessarily superior performance levels. Frequently, the same companies are best-in-class for a series of metrics; however, a company never dominates all performance categories. PRTM expects to see best-in-class metrics supplanted by eClass(R)metrics as companies begin to web-enable their supply-chain process.

For details on industry-specific performance or for an electronic copy of the enclosed charts, contact:

Jennifer Edmond, U.S. Public Relations Manager, PRTM 1050 Winter Street, Waltham, MA 02451 Tel: 781-434-1279 Fax: 781-647-2804 E-mail: jedmond@prtm.com Also media contact for PRTM's Performance Measurement Group

About PMG

The Performance Measurement Group, LLC, a subsidiary of global management consultants PRTM (www.prtm.com), offers a pioneering, online benchmarking service in the areas of product development and supply-chain management. The service gives subscribers confidential, customized benchmarking analysis online, 24 hours a day, seven days a week. The two initial benchmarking series are built on PRTM's leading thinking and work in core business process management. PRTM has been conducting benchmarking studies in the areas of product development and supply-chain management for over a decade. The Performance Measurement Group is now accepting subscribers for its Supply-Chain Management Benchmarking Series, Product Development Benchmarking Series, and Customer Service Benchmarking Series. Companies can subscribe to one or all of the series. Visit PMG's web site at www.pmgbenchmarking.com.

ABOUT PRTM

Pittiglio Rabin Todd & McGrath (PRTM) is the leading management consultancy to technology industry. PRTM helps technology companies structure their strategies, their organizations, and their core business processes for competitiveness, profitability, and growth, and to achieve eClass(R) performance. Since its inception in 1976, the firm has worked with over 1,000 technology companies in over 5,000 engagements worldwide. PRTM is internationally recognized for its leading methodologies and frameworks for continuous improvement. PACE(R) (Product And Cycle-time Excellence(R)) has been used by hundreds of high-tech companies over the past decade to accelerate time-to-market. PRTM's Supply Chain Operations Reference-model (SCOR) has been adopted by the 600-member Supply-Chain Council as an industry-standard "toolkit" for upgrading supply chains for strategic advantage. As part of the firm's marketing and sales practice, Channel Opportunity Analysis(R) guides companies through the channel-development process, giving structure to analysis, planning, and implementation of channel strategy and management. PRTM has an alliance with Integrated Development Enterprise, Inc. (www.ide.com) to help companies develop an end-to-end web-enabled product development process. PRTM operates 14 offices around the world. U.S. offices are in Costa Mesa, Calif; Mountain View, Calif; Irving, Tex.; Rosemont, Ill.; Southfield, Mich; Stamford, Conn., Waltham, Mass.; and Washington, D.C. European offices are in Oxford, Glasgow, Paris, and Frankfurt. PRTM's Asian offices are in Toyko and Hong Kong. Visit PRTM's web site at www.prtm.com.

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