Supply Chain Management Market Dynamics: Who Are the Leaders Now?

Consistent with other enterprise software markets, the Supply Chain Management (SCM) market is beginning to recover. The worldwide market for Supply Chain Management is expected to grow at a Compounded Annual Growth Rate (CAGR) of 7.4 percent over the next five years. The market was $5.1 billion in 2003 and is forecasted to be $7.4 billion in 2008, according to a new ARC Advisory Group study.

Surprise Answer for "Who Are the Leaders?"

The Supply Chain Management market encompasses a variety of Supply Chain Planning and Supply Chain Execution applications and diverse suppliers. A look at the market share leaders in SCM turns up some surprising names. Several large industrial companies who are not thought of as software suppliers are among the top ones in this market. "I recently received several phone calls from journalists asking about 3M's acquisition of High-Jump Software, a best of breed Supply Chain company. The tenor of the calls was 'what is 3M doing in software? They don't know anything about software!'" according to Steve Banker, ARC Service Director for Supply Chain Management. "Most of those who cover the SCM space do not realize that companies like Honeywell, ABB, or Rockwell are among the top ten suppliers of SCM solutions." Dr. Banker is the principal author of ARC's "Supply Chain Management Worldwide Outlook" (

SCM Suppliers for the Process Industries Most who cover the SCM space do not realize that companies with production management solutions in the process industries are also leading suppliers of SCM solutions. ERP suppliers' inroads into the Collaborative Production Management (CPM) space are not as impressive as they are in other markets. Many of the core CPM manufacturing verticals require extremely deep industry specific functionality, and this is particularly true of heavy process industries including chemical, paper, and oil & gas. The leaders in production management for the process industries are also leaders in automation and control systems for those industries. Their expertise in critical hardware used to run process plants optimally provides a certain amount of protection from the encroachments of suppliers that sell only software and cannot provide intimate industry solutions.

Process Industry SCM Is Different

It is also true that process industries are very different from discrete industries when it comes to Supply Chain Planning (SCP). Conventional analysis of SCP solutions is "discrete manufacturing" centric. The supply chain processes and optimization applications of discrete manufacturers are far easier to understand than the workflows and production optimization applications employed in process industries. Conventional SCM solutions, derived from the discrete industry, do not adequately address the "special requirements" of many process industries. Furthermore, process industry specific functionality must be considered in the design of data structures and planning algorithms, and cannot be easily added to conventional solutions.

Additional information on this study can be found at:

Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. Further information can be obtained from ARC, Three Allied Drive, Dedham, MA 02026, 781-471-1000, Fax 781-471-1100, E-mail [email protected], Web

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