Companies investing in supply chain technology

U.S. companies have begun to attack the more than $117 billion in excess inventory and $83 billion in lost sales associated with disconnected and uncoordinated supply chains, according to Yankee Group. The research firm says companies have shifted IT dollars from core or internally oriented technologies to technologies to enable networked supply chain management.

The Yankee Group's research found that 71% of companies increased investment in edge of the enterprise technologies. The portion of the budget allocated for these technologies grew 75% on average, while the overall IT budget grew only 3.7%.

Supply chain software vendors have implemented several strategies to meet extended SCM requirements. Vendors have incorporated supply chain event management, portals and other capabilities into their applications to make it easier for customers, suppliers and service providers to access information.

The research firm recommends enterprises buy extended SCM as a service in a subscription model. Only the largest manufacturers and retailers will need to buy software that enables them to be the hub of the extended supply chain. Yankee Group also recommends enterprises upgrade their ERP systems within the next 12 to 18 months. Moving to the most current version will make it easier to connect with the supply chain network. Lastly, Yankee Group says enterprises should take a holistic view of their enterprises to better understand the flow of information and inventory. For more information, visit http://www.yankeegroup.com

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