Executive Briefings

Supply Chain Management Not Showing a Great Deal of Growth Right Now

You might say that supply chain management has entered the philosophical realm. SCM investment has flatlined to a large extent, and the market's focus has changed as supply chain headaches become more complex and cut a broader swath. Given that SCM covers everything from procurement and production to distribution and logistics, the numbers can vary depending on how you slice it. Overall, SCM is showing little to no growth, according to research firm IDC, with less than 2 percent for all software categories (not including SaaS).

These SCM numbers encompass three categories: logistics, production planning and inventory.

"Those are the big categories to look at," Michael Fauscette, group vice president of software business solutions for IDC.

"Out of these, logistics is probably the one that's been more interesting," he said, "because it is showing the highest growth by far at 3 percent. That's probably because of the fuel crisis."

Production planning is the least interesting this year, showing barely 1 percent growth, added Fauscette.

"It may even be slightly down by the end of the year," he said, "but that makes sense, since the manufacturing sector has been hurt really badly."

Inventory management has held steady, although North America and Asia drove the numbers down. There was reasonable spend in Europe at 12 percent growth, however, although that was down from last year's 17 percent number.

Despite the slow numbers, there are still opportunities to take costs out of SCM, Fauscette added.

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You might say that supply chain management has entered the philosophical realm. SCM investment has flatlined to a large extent, and the market's focus has changed as supply chain headaches become more complex and cut a broader swath. Given that SCM covers everything from procurement and production to distribution and logistics, the numbers can vary depending on how you slice it. Overall, SCM is showing little to no growth, according to research firm IDC, with less than 2 percent for all software categories (not including SaaS).

These SCM numbers encompass three categories: logistics, production planning and inventory.

"Those are the big categories to look at," Michael Fauscette, group vice president of software business solutions for IDC.

"Out of these, logistics is probably the one that's been more interesting," he said, "because it is showing the highest growth by far at 3 percent. That's probably because of the fuel crisis."

Production planning is the least interesting this year, showing barely 1 percent growth, added Fauscette.

"It may even be slightly down by the end of the year," he said, "but that makes sense, since the manufacturing sector has been hurt really badly."

Inventory management has held steady, although North America and Asia drove the numbers down. There was reasonable spend in Europe at 12 percent growth, however, although that was down from last year's 17 percent number.

Despite the slow numbers, there are still opportunities to take costs out of SCM, Fauscette added.

Read Full Article