Keeping day-to-day operations in a shipping environment running smoothly and effectively is the most important job a company manager does, so it makes sense to have every aspect of the supply chain updated frequently. This helps ensure that any breaks in the chain, like in the automated data collection systems, are kept to a minimum and that all aspects of it are in compliance with software and regulatory changes.
Software's Rapid Evolution If industry revenues are any indicator, the supply chain management software sector is doing very well. Recent research from Gartner showed that SCM software sales could top the $10 billion mark by the end of this year, according to PCB Design. That's up 12.2 percent over last year's figures and marks the largest annual growth rate since 2011. Chad Eschinger, vice president of research at Gartner, said the numbers are encouraging.
"The market for supply chain technologies is buoyant," Eschinger told PCB Design. "Both supply chain execution and supply chain planning revenues are on course to grow at double-digit rates."
At the end of 2013, Gartner asked almost 450 supply chain operators what limited progress toward their company-wide initiatives. The most common answers were wildly off-base product demand forecasts and demand variability. PCB noted both problems can be fixed by using technologies and initiatives created specifically for supply chain management.
Additionally, 43 percent of the respondents indicated that they were facing increased difficulty with integration and were looking to deploy a single technology base to enhance internal process visibility. By doing this, they would foster stronger and better communication with buyers and suppliers.
Identifying the Market Profile The Gartner report also described who in the SCM market were exploring or fully deploying updated software solutions for their supply chain management. While more than 60 percent of the current SCM software market revenue is generated from existing installations, in the survey, about 16 percent of the businesses queried were using the software for the first time. Gartner explained that by 2018, that would likely fall to 10 percent or less.
One interesting aspect of the Gartner survey is that most of the executives still wanted to have a hosted or on-site platform and applications. Lack of confidence in Software as a Service solutions that many feel have not reached the levels of parity that on-site SCM packages possess is the major cause for concern.
So, while it's clear that companies are very aware of the need for keeping their SCM software updated and viable, there are also concerns about how to best manage the latest software solutions and how to integrate them into current supply chain operations.