Supply Chain Technology Outlook: Spending Increases
John Fontanella and Eric Klein -- Supply Chain Management Review, 4/1/2008
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Companies increase spending on supply chain technology
This year's spending study shows that companies will continue to increase their investment in supply chain technology. This is the continuation of an upward trend in spending first seen in 2005, reversing the near depression conditions that rocked the technology industry in the early part of the decade. The findings reveal that companies of any size and in any industry see supply chain technology as a positive contributor to their success.
Not surprisingly, their spending will be aimed at
- controlling costs,
- raising productivity, and
- improving customer service.
But not all industries or geographies have the same goals for their investments.
A summary of the survey findings shows that process industries like consumer product goods and chemicals, particularly in the U.S., are more likely to focus on using supply chain technologies to improve productivity and reduce cost. Those in discrete industries such as high tech and consumer electronics are more interested in using these technologies to increase revenue growth. We also found that companies in discrete industries, as well as companies of any type with revenues over a billion dollars, are much more aggressive overall in their spending intentions. Don't discount midsize companies, however: well over half say they will be increasing investment in supply chain technology for 2008.
Popular New Technology Choices
As for replacement of current supply chain applications versus the acquisition of new technology, survey respondents were evenly divided, with approximately half of spending committed to each category. What are the most popular new technologies? All things collaborative: from Vendor Managed Inventory (VMI) to S&OP and forecasting. Finally, with regard to any discernable trend toward companies choosing their Enterprise Resource Planning (ERP) vendors' supply chain technology offerings over those of best-of-breed providers, we determined that market domination by ERP vendors may be coming at some distant time. For now, though, best-of-breed vendors can look forward to many more years of continued success in the market. Let's examine these findings in greater detail.
>>Next: Spenders Seek Growth, Software Replacement
- The supply chain technology survey
- Companies increase spending on supply chain technology
- Spenders Seek Growth, Software Replacement
- Vendors To Boost Share and Penetration
- Companies to Swap Software
- Spending to Boost Low-Penetration Software
- Best of Breed vs. ERP—Both good canidates for replacement
- Market Share Winners and Losers
- Key Takeaways
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