Frost: Growth, Investments Drive Supply Chain Coordination
October 6, 2006 // Published as a news service by IHS
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Coordination and integration of the supply chain flows within and across companies and is becoming critical to effective supply chain management (SCM).
According to Frost & Sullivan, the market for supply chain coordination expects to play a key role in the near future as event management and performance management applications emerge as competitive tools in managing highly complex supply chains by reducing lead time and cost.
New analysis from Frost & Sullivan found that the supply chain market earned revenues of $5.06B in 2004, with estimates to reach $8.67B in 2009.
"Companies realized the need for proactive approach toward their customers and suppliers and started fine-tuning their supply chain systems," said Frost & Sullivan business and financial services analyst Raja Srinivasan. "This calls for investments in coordination applications."
Analysts said the competition in this space is intensifying after the entry of many niche firms and enterprise resource planning (ERP) companies into the market. Since SCM is becoming a natural extension of ERP, the ERP players are posing a serious threat to the pure-play SCM software providers as they have minimal integration issues and wider product coverage.
"Market participants have to offer end-to-end solutions covering a variety of applications in order to minimize the integration issues and thereby fulfilling the customer needs," said Raja. "Also, there should be an eye on customization, as the customers are demanding cost-effective solutions."
Source: Frost & Sullivan.