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9th Annual Software Users Survey: Mixed Results

While shippers say they’re taking a more calculated approach to vendor and product selection, our survey finds that there will be an increase in overall supply chain software spending over the next 18 months.
By Bridget McCrea, Contributing Editor
April 01, 2011

Logistics Management magazine recently conducted its 9th Annual Software Users Survey to better understand the current supply chain software market, identify pertinent trends, and gauge just how far logistics and supply chain managers have come in terms of implementation. 

With the economic recession gradually loosening its chokehold on the nation’s businesses, Logistics Management was keen to learn which new and upgraded software options were at the top of shippers’ wish lists, and which of those options were already in the planning and purchasing stages.

imageAs in years past, specific areas of evaluation from survey respondents included types of software currently used and planned for purchase; annual software expenditures; respondents’ stage in the software buying process; reasons for consideration of supply chain solution software; number of software packages and vendors used by company; and expected timeframe for payback on purchases of supply chain software, to name just a few of the areas examined.

This benchmark study to assess the supply chain software market was conducted among readers of Logistics Management magazine and e-newsletters, and the study participants are involved in specifying and evaluating logistics and supply chain software solutions for their company. The study gauges the state of the market and identifies any trends that may have become apparent from year to year.

A total of 132 qualified responses were received from Logistics Management subscribers who indicated that they were personally involved in buying supply chain management (SCM) software for their companies’ operations. Over the next few pages we go deeper into the results and find out what some of the top SCM analysts have to say about this year’s findings.

Who’s planning to buy what?
The top software choice for logistics professionals in buying mode was warehouse management systems (WMS), with a total of 68 percent of shippers either already using or looking to buy a new WMS in 2011, compared to 64 percent in 2010.

When they’re ready to procure those systems, 35 percent plan to spend less than $100,000, while 18 percent expect to pay $100,000 to $500,000. Four percent plan to shell out $500,000 to $1 million for their new WMS. Key expectations from such systems include upgrades of existing packages, real-time controls, inventory deployment, and label printing.

imageTransportation management systems (TMS) are also top of mind for shippers this year, with 26 percent planning to purchase such systems within the next 12 months. A total of 51 percent are either already using or looking to buy a new TMS this year, compared to 52 percent in 2010. Twenty-three percent expect to pay less than $100,000 for a TMS, while another 23 percent want to procure their TMS for $100,000 to $500,000. Five percent expect to pay $500,000 to $1 million for the software.

When it comes to getting the most out of a TMS, shippers are hoping to gain better routing and scheduling capabilities, improved carrier selection and load tendering, shipment consolidation, and routing and rating.

Seventeen percent of companies are shopping around for new enterprise resource planning (ERP) packages this year, with 24 percent planning to spend less than $100,000 for their new systems. Fifteen percent expect to procure their ERPs for $100,000 to $500,000, and three percent will pay $500,000 to $1 million. When buying their ERPs, 48 percent of companies will be looking for an integrated WMS and 25 percent expect a TMS to be included in the package.

To help improve inventory visibility, demand planning, order management, and vendor/supplier collaboration, 13 percent of shippers will invest in supply chain planning (SCP) software this year, compared to 27 percent in 2010. In total, 43 percent of shippers say they’re either using or planning to use SCP in 2011, compared to 25 percent in 2010. Fourteen percent of those firms say they’ll pay less than $100,000 for this investment, while 5 percent expect to spend $100,000 to $500,000, and another 5 percent will shell out $500,000 to $1 million.

When asked whether 2011 would be the year to integrate a global trade management (GTM) system into the mix, just 6 percent of shippers nodded. Of that group, 4 percent want to spend less than $100,000 for their GTM, while 4 percent will pay $100,000 to $500,000 and 2 percent will spend $500,000 to $1 million. Yard management systems (YMS) are on the radar screen for 3 percent of shippers this year.

About the Author

Bridget McCrea
Contributing Editor

Bridget McCrea is a Contributing Editor for Logistics Management based in Clearwater, Fla. She has covered the transportation and supply chain space since 1996, and has covered all aspects of the industry for Logistics Management and Supply Chain Management Review. She can be reached at .(JavaScript must be enabled to view this email address).

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