Supply-Chain-Planning Market Solid Despite Economy

Despite the recent recession and ensuing retreat from capital spending, the overall supply-chain-planning and collaboration (SCP&C) market exceeded $1.903 million in 2003, reports ARC Advisory Group, Dedham, Mass. The manufacturing sector, at $1.615 million, accounted for 85% of this market. ARC attributes this to businesses deciding that the current business climate makes for a good opportunity to revamp operations and make them more cost effective. It is predicting this will continue, with the SCP&C market for manufacturers and retailers growing to $2.190 million by the end of 2008 on a cumulative annual growth rate of 2.8% during this forecast period. "The biggest difference between the situation a couple of years ago and now is that companies are investing almost exclusively to generate greater cost effectiveness," says ARC analyst Steve Clouther, author of ARC's "SCP&C Software & Services Worldwide Outlook" market study. "Despite the weak economy, industry today is facing a significant need for change due to the substantial increase in business transaction costs over the past few years." As a result, companies are investing primarily to make the value-added chain from supplier to end customer more efficient, while at the same time they are reviewing relevant internal processes, Clouther says. Geographically, North America accounted for most of the 2003 SCP&C revenues for software and services, followed by Europe, Middle East and Africa. In 2004, the European Union expands by 10 countries, and as a result, it will be the region of growth opportunity for the SCP&C vendors, Clouther says.

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