Growth predicted for SCM market

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Related tags: Supply chain, Supply chain management, Supply and demand

AMR Research says that after years of caution, attitudes towards
supply chain objectives are changing. This in turn has led to a run
on investments in the sector, which the company predicts will lead
to a 5 per cent jump in the multi billion euro software Supply
Chain Management (SCM) market.

As a result US-based AMR claims that the SCM software market is expected to grow five per cent, from $5.24 Billion (€4.35) in 2003 to $5.5 Billion in 2004. The bulk of new investment will be in supply chain execution initiatives and demand-driven supply networks, the company added.

AMR Research's annual enterprise market projections conclude that companies seeking profitable growth are investing in technology that allows them to reduce costs while improving customer responsiveness. "An obsession with cost cutting and asset utilisation has evolved into a focus on innovation and creating an ability to capitalise on the variability of demand,"​ said Kevin O'Marah, vice president of research at AMR Research. "Using technology to leap-frog the competition, reinvigorate growth channels, and provide shareholder value is the new earmark for supply chain savvy enterprises."

Factors such as increased outsourcing, supplier collaboration, and the pursuit of perfect demand information have spurred the need for applications that provide better management visibility across the enterprise. Vendors who work in these categories are likely to experience the most growth in 2004.

"The good news is that companies are grasping what enterprise applications can do for their businesses,"​ said Tony Friscia, CEO of AMR Research. "Using IT to bring great ideas to market will undoubtedly keep technology spending up. Innovations in RFID and changes in the retail industry are spurring renewed growth."

The report, which surveyed some 500 software vendors representing a cross-section of software applications, also found that ERP vendors are expecting to consolidate in the future, which in turn will lead to an estimated growth of 11 per cent. Additionally the survey results found that the SCM market is being revitalised by better sharing of partner data, the increase use of RFID and the increasing consolidation of Supply Chain Execution vendors.

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