ERP vendors move into SCM

The supply chain management (SCM) market is set to boom according to the research organisation Datamonitor.

The supply chain management (SCM) market is set to boom according to the research organisation Datamonitor.

Supply chain vendors will no longer simply sell off-the-shelf products, but will work instead on personalised offerings in collaboration with their customers.

Datamonitor's new report, eSupply Chain for Consumer Markets, predicts the global SCM market will grow to $12.5bn (£8.55) by 2005, rising at a compound annual growth rate of 28% from 1999.

John Manners-Bell, lead logistics and transport analyst at Datamonitor, said: "The technology is now present and the opportunities are such that SCM is going to grow very strongly over the next few years."

The benefits of deploying SCM are just being realised, said Manners-Bell. Organisations will flock to deploy such a system in a bid to retain competitive advantage as business-to-business commerce booms, with logistics, transport and retail organisations likely to lead the way.

"Manufacturers, retailers and logistics companies will not put off SCM deployment because of the cost-savings associated with it," Manners-Bell explained.

Traditional SCM companies such as i2 Technologies and Manugistics will still compete in the marketplace. Enterprise resource planning (ERP) companies such as SAP, Oracle and JD Edwards will also play a more prominent role, according to Datamonitor.

"The name of the game will be partnerships," Manners-Bell said. "What is e-supply chain now will just be supply chain within the next year. And it will happen that quickly. It will just not be acceptable in one or two years time to have a supply chain that isn't flexible, collaborative and completely transparent."

Ken Adcock, i2's alliance director, agreed. "We work extensively with partners and have entered into collaborations with customers and partners, and we welcome that. It's a trend that we are seeing and one we expect to continue."

The Datamonitor report predicts that the European SCM market will grow faster than that of the US.

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