AMR Research has released a study that estimates the supply chain management technology market will grow 7% annually for the next five years, despite current economic conditions. The market is currently at $6.5 billion. AMR Research says: "The supply chain, and the technologies that support it, will play an important role in helping companies deal and thrive in an economy that is going to be quite unlike anything we've seen in the post-war era."
The five major forces at work, and how technology will help, according to AMR:
-
High inflation - Inflation will force supply chain managers to play an important role in protecting product and company margins through cost control and increased efficiencies in their operations.
-
Commodity prices - Pressure from higher commodity prices will bring supply more in line with demand and reduce inventory levels from raw materials to the finished product.
-
Threats to brand security - Counterfeiting, the gray market, and questionable quality standards will make brand protection a top priority. Companies will look to adopt risk mitigation and global trade technologies as well as analytics to monitor distribution channel buy-and-sell patterns.
-
Sustainability becomes a component of corporate decision making – Public sentiment will force substantive measures by industry to become more environmentally friendly. This will present opportunities to more directly connect product development efforts with supply chain management to minimize waste and material usage.
-
Cash is king - Capital spending will come under great scrutiny as companies preserve cash. Technologies that increase the velocity of cash collection, including B2B e-commerce, will become a critical component of future initiatives.
The report also found that SAP, Oracle, and Manhattan Associates were the three largest SCM vendors by revenue in 2007, with a market share of 13%, 10%, and 5% respectively.
MDM's recent Special Report on the State of the Distribution Software Industry is now available. Click here to access the report.
