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Supply Chain Management Applications Market Shows Steady Growth

11:13 pm   -   November 15th, 2006

It wasn’t an awe-inspiring showing of strength, but the market for supply chain management (SCM) applications experienced 3-percent growth in 2005, achieving a total value of $5.6bn, according to AMR Research Inc. The sector was influenced by a variety of factors, including globalization, leaner supply networks, higher customer expectations, mass customization at the manufacturing and assembly level, and rising demand for product and service variability. “New business focuses and pressures are driving pockets of vendor information and renewed corporate spending in supply chain initiatives,” according to Mark Hillman, a senior research analyst at AMR. On the negative side, “spending is tempered by the fact that corporate supply chain organizational maturity is still relatively low, limiting adoption. In addition, consolidation will continue to play a significant role in 2006.”


There were no surprises in AMR’s latest revenue rankings. SAP AG was once again the top SCM vendor in 2005, chalking up 6-percent market growth. Its revenue share notched up from 11 percent to 12 percent, the same number that AMR is forecasting for SAP in 2006. In second place was Oracle Corp., growing its market share from 5 percent to 10 percent, where AMR expects it to remain for the rest of this year. The last three of the top five vendors were more closely bunched: i2 Technologies, holding steady with a 5-percent market share; Manhattan Associates, with 4 percent, and Infor, going from 2 percent to 3 percent. This year, AMR expects i2 to drop to a 4-percent share, equal to the projected shares of Manhattan and Infor. The top area of growth within SCM in 2005, according to AMR, was the inventory configuration and policy technology category, which posted a 35-percent growth in licenses. That was due largely to the increasing complexity, interdependency and globalization of supply chains. Supply chain network design showed growth of 21 percent, AMR says. The fastest-growing aspect of SCM was application hosting and subscription, evidence of companies’ desire to shed on-premise systems and software.

Global Logistics & Supply Chain Strategies, October 2006

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