It's an annual rite for many car owners: selling their current vehicles and trading up to an automobile with the latest and greatest gadgets and gizmos. Based on the results of our exclusive reader survey, it looks like a similar practice may now be taking hold among buyers of supply chain software.

Across the board, logistics and supply chain managers are opening up their wallets this year to upgrade and add features to existing applications or to buy new packages. That was a key finding in our third annual study of readers' software usage and buying plans.

The online survey drew 283 responses from readers of Logistics Management and our sister publication, Supply Chain Management Review. For the survey tabulations, however, the pool of respondents was limited to the 218 respondents who had bought software in the past or planned to do so this year. Sixty-nine percent of that sample—151 participants—indicated that they planned to purchase some type of supply chain application this year.

The final survey sample included logistics and supply chain managers from both large and small companies. At one end of the scale were the 34 percent of the respondents who work for companies with annual sales of less than $49 million. On the other end were the 28 percent who hailed from companies with annual sales exceeding $1 billion.

Respondents reflected a cross section of American industry. The largest group, with just 10 percent, worked in the electrical and electronic equipment industry. The second-largest segment, with 9 percent, was the food and beverage industry. The balance were scattered across a wide range of manufacturing, service, and retail businesses.

As was the case in our two previous studies, warehouse management systems (WMS), which oversee warehouse operations, were the most commonly used applications. Fifty-two percent of participants in the 2005 survey said their companies had installed a WMS. Enterprise resource planning (ERP) applications came in second with 42 percent. That was no surprise, as many corporations use ERP systems to integrate manufacturing, finance, and other critical information systems.

Next in popularity were transportation management systems (TMS), used by 40 percent of the respondents to oversee their carriers. Another 25 percent had deployed supply chain planning (SCP) software to help them manage inventory. Software designed to handle the flow of imports and exports were used by 13 percent, while just 8 percent had installed a yard management system, which manages trailers and other equipment used at distribution centers. (See Figure 1.)

Of note, 10 percent of the respondents reported that they used "other" types of supply chain software. Asked to define those applications, respondents cited a host of products, including warehouse order picking, global trade management, order planning, denied-party screening, and relationship management applications, to name a few. None, however, received more than one response, except for warehouse order picking systems, which was cited by two polltakers.

Shippers have been hit hard this past year by rising freight rates and fuel costs in all modes of transportation. No wonder, then, that transportation management systems were at the top of many respondents' shopping lists. Some 39 percent said they planned to buy a TMS in 2005.

Often shippers are choosing to work with their current TMS vendors to add new features. When asked their primary reason for purchasing a TMS, 26 percent of would-be buyers said they wanted to upgrade an existing package. The need to better control their transportation services appears to be on the minds of some buyers; 23 percent said they needed a system for routing and scheduling. The third most common reason for a new TMS, cited by 13 percent, was to manage carrier selection and load tendering. (See Figure 2.)

The need to raise productivity appears to be stoking interest in warehouse management systems, the application that placed second on respondents' shopping lists. A little more than one-third (35 percent) of respondents planning to buy software this year said they would acquire a WMS.

When asked their primary reason for purchasing a new WMS, 32 percent of would-be buyers said it was to upgrade an existing package. Companies also want up-to-the-minute status of stock on hand in their warehouses, as 21 percent cited the need for "real-time control" as their primary reason for obtaining a new WMS. (See Figure 3.)

Supply chain planning systems were also on the buying agenda for many companies. Some 26 percent of respondents said they intended to purchase SCP packages this year. Next in line for consideration were ERP systems, mentioned by 18 percent of respondents. Another 15 percent reported plans to buy import/export management software, while 10 percent said they were interested in yard management systems. (Multiple responses to this question were allowed, hence many readers said they planned to purchase more than one of those applications.) Continued...