New report says SCM technology market will hit $9.2 billion by 2012; shippers concur
Jeff Berman, Group News Editor -- Logistics Management, 2/1/2009
BOSTON — Capital expenditures are being reduced or kept at current levels due to the shaky economy, but shippers are still investing in IT. And a new report from AMR Research says this is not likely to abate anytime soon, with the firm predicting an annual 7 percent compound annual growth rate through 2012.
This projection suggests that the overall supply chain management (SCM) technology market will grow from $6.5 billion in 2007 to roughly $9.2 billion in 2012. The likely driver for this growth, says AMR, is that “the economic challenges of the coming years will offer greater opportunity for supply chain technology adoption.” These economic challenges include: high inflation, rising commodity prices, threats to brand security, and cash preservation. (For a deeper look into the growth of TMS see page 41)
While AMR predicts a consistent increase in SCM technology growth in the coming years, so, too, do a group of more than 50 transportation and logistics executives that participated in a recent Logistics Management survey. Nearly 60 percent of respondents indicated their investment into SCM technology would remain at current levels in the coming years with 21 percent saying it would increase, and another 21 percent saying it would decrease.
Some of the reasons cited by the LM survey respondents for increased spending include improve visibility to customers, increased delivery speed, and the need for better or more updated tools and processes. Those that said IT investments would be reduced pointed to issues like budget cuts, project delays, and the slowdown in overall business.
It’s interesting to note that LM survey respondents reported that they are currently most interested in adopting inventory optimization (48 percent); warehouse management systems (42 percent); and demand planning (40 percent). AMR noted that it also found that these segments are viewed as “high growth application categories.”
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