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FOR IMMEDIATE RELEASE

Petroleum Industry Benchmarking

Performance Metrics for Process Improvement

(TEMPE, Arizona) October 13, 2009 — The recently published CAPS Research Petroleum Industry Benchmarking Report focuses on key supply management performance metrics including professional development, financial data, and supplier relationships. The report also provides insight into the petroleum companies' supply management functions that are being outsourced and/or offshored, and lists the outcomes that the companies are realizing as a result of their outsourcing and offshoring activities. A significant majority of the participants reported their outsourcing objectives are being met, and all of the participants reported their offshoring objectives were achieved.

Other key benchmarks include:

Cost Savings: This is the first year that CAPS Research has measured 'value creation' as a component of cost savings. Most of the participants reported their savings as reductions and/or avoidance, but 30 percent of the participants reported that value creation accounted for more than 25 percent of the total savings realized.

Supplier Base: In the three previous reports, about 51 percent of the participants stated their supplier base increased. However, in the recently published benchmarking report, the number dropped to 28 percent. Conversely, almost 40 percent of the survey population reported a decrease in suppliers. In the last three reports, only 29 percent of the participants (average) indicate a decrease in the numbers of suppliers.

Supplier Performance Ratings: The petroleum companies were asked to indicate which of 17 different supplier performance measures were used during the reporting period. Not surprisingly, the top three measures were safety, quality, and on-time delivery. Only 38 percent of the survey participants reported risk mitigation as a supplier performance measure, which contrasts to 58 percent who reported risk mitigation as a supplier performance measure in 2008.

Industry-specific benchmarking provides metrics for process improvement, more detailed benchmarking, or possibly topics for more extensive primary research. This focused approach to benchmarking will help participants identify business practices (internal and external) that are producing superior performance, as well as look closely at areas that can be improved.

To view the full metric report, "Petroleum Industry 2009 Supply Management Performance Benchmarking Report," visit the CAPS Research web site at: http://www.capsresearch.org/publications/pdfs-protected/Petroleum2009Metric.pdf.

The report includes breakout reports for Integrated, Upstream, and Downstream operations.

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CAPS Research is a nonprofit research organization founded in 1986 to provide leading research to our strategic-minded corporate sponsors and to the public. Our mission is to work in partnership with a global network of executives and academics for the discovery and dissemination of strategic supply management knowledge and best practices. CAPS Research is jointly sponsored by the W. P. Carey School of Business at Arizona State University, and the Institute for Supply Management™ and Global 1000/Fortune 500-size organizations.

Media Contact:
Clare Donnalley
Marketing Manager
CAPS Research
Voice: 800/888-6276 extension 3007
cdonnalley@capsresearch.org

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