AMR Research: Supply Chain Management Market Remains Steady

September 25, 2006 // Published as a news service by IHS

According to recent analysis from AMR Research, the supply chain management (SCM) applications market experienced slight growth in 2005, increasing 3% to $5.6B.

Environmental factors such as globalization, leaner supply networks, increased customer expectations, more mass customization and increased demand variability are all affecting today's SCM market.

"New business focuses and pressures are driving pockets of vendor innovation and renewed corporate spending in supply chain initiatives," said Mark Hillman, senior research analyst at AMR Research.

"However, 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."

For the third straight year, Systems, Applications and Products in Data Processing (SAP) emerged as the top SCM vendor in terms of revenue, and outpaced the market with 6% growth, analysts said. Oracle, i2 Technologies, Manhattan Associates and Infor round out the top five vendors in revenue.

Supply chains are becoming increasingly global, complex and interdependent, forcing companies to extend planning beyond the four walls. Due to this trend, analysts said the top SCM application growth area for 2005 was the inventory configuration and policy technology category, which posted a healthy license growth rate of 35%.

Supply chain network design license growth was 21%. According to AMR Research, the application hosting/subscription was the fastest-growing SCM delivery model, boasting a 16% growth rate.

Source: AMR Research.