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CPGs' Spending on IT, Logistics Flat: Study

Consumer packaged goods manufacturers are leveraging cost reductions and increased efficiencies to compensate for rising fuel and commodity prices and preventing overall logistics costs from rising, according to a recent IBM study conducted for the Grocery Manufacturers Association.

An information technology investment survey conducted by IBM and AMR Research for GMA revealed that in the CPG industry, the ratio of IT spending to net sales remained essentially flat between 2006 and 2007, growing a mere .05 percent.

The organization previewed top-line findings of its "2008 Logistics Benchmark Report" and "Information Technology Investment and Effectiveness Report" for attendees of GMA's annual Information Systems/Logistics Distribution Conference (IS/LD), held this week in Palm Springs, Calif. The complete findings and analysis of both studies are slated for an early-May release.

"The fact that IT and logistics costs as a percentage of sales have remained relatively flat in recent years demonstrates the commitment of our member companies to keeping costs down in a challenging economic climate," noted GMA s.v.p. for industry affairs Stephen Sibert in a statement. "Any time consumer products makers can minimize costs, it's a good thing for consumers."

IS/LD is the only IT, supply chain, and logistics conference specifically focusing on the CPG industry. Product recall, environmental sustainability, globalization of the supply chain, and advancements in nanotechnology are among the key issues being discussed by almost 400 manufacturing and retail executives at this year's event.

In other GMA news, the association has appointed Eileen Harley director of federal affairs. She will report to v.p. for federal affairs Scott Faber. The position is a new one, according to organization spokesman Scott W. Openshaw.

According to president and c.e.o. Cal Dooley in a statement, "Her experience in the food and consumer products industry and her work on Capitol Hill will help GMA and its member companies continue to advocate for commonsense public policy solutions to the issues confronting the food, beverage and consumer packaged goods industry."

Harley most recently served as director of government relations for the Food Marketing Institute, where she planned and implemented lobbying activities and strategies on food retail industry issues, including food safety, health care, and pharmacy. Before joining FMI, she spent seven years with the House of Representatives, including six with the Committee on Armed Forces under chairman Floyd Spence (R, S.C.).
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