Companies are spending more to build better supply chains

Thanks to the lengthening of global supply chains, which now involve international suppliers as well as customers, the need for supply chain technology is accelerating. According to supply chain executives at 208 companies surveyed by analyst firm Aberdeen Group, companies are not only strategizing on what their technology footprints should look like but are also making investments.

Nearly half (48%) of all companies studied and 53% of mid-size firms will spend more in 2006 on new supply chain technology than they did in 2005, the survey indicates, while only 8% will spend less. Additionally, two-thirds of large enterprises plan to spend over $300,000, and 35% plan to spend over $1 million.

In terms of exactly what these companies plan to spend their money on, the answers tend to differ depending on a company’s specific supply chain ambitions. Aberdeen categorizes the companies based on their technology priorities into three basic groups:

* Strivers: Companies striving to reach industry average with their supply chain technology roadmap.

* Best practice seekers: Companies looking to adopt industry best practices and supporting technology.

* Innovators: Companies seeking to launch new supply chain initiatives.

“Supply chain organizations are under intense pressure to meet demands for greater customer intimacy, lower cost of goods sold, and increased global business processes,” says Beth Enslow, senior vice president of research for Aberdeen. “To succeed, these organizations are identifying that they need to change their supply chain technology footprints.”

While 28% of respondents say lowering supply chain costs is their top motivator for supply chain innovation, 72% point to other motivations, such as the desire to meet customer mandates more efficiently, minimizing demand/supply imbalances, and creating profitable sales growth.

Download a complimentary copy of the survey report at:
http://www.aberdeen.com/link/source.asp?cid=3028&pid=PR052306

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