March 1, 2007

High tech gets low grades: survey finds shippers unhappy with their supply chain systems

By DC Velocity Staff

They have systems to manage transportation, orders and warehouse operations as well as software to provide supply chain visibility, but companies in the automotive, aerospace and defense industries say they're just not satisfied with their existing supply chain technology. A recent research report from Aberdeen Group, Globalization: The Turning Point for Packaged Supply Chain Applications, indicates that a whopping 80 percent of companies in these industries aren't happy with what they have.

A big part of the problem appears to be lack of flexibility. Half of the survey respondents reported that their legacy IT systems and custom-built applications cannot keep up with their changing business processes. "The vast majority of automotive, aerospace and defense companies run major parts of their supply chain operations on custom or in-house developed technology," says Nari Viswanathan, a research director for Aberdeen's supply chain group. "Many of these companies are now looking to their ERP vendors or other packaged software providers to help them with the technology needed to enable supply chain transformation and more flexibly [adapt] to changing business requirements."

Aberdeen's research finds that 76 percent of the companies surveyed do not have full supply chain process automation and a common system company-wide. Nearly three out of 10 are seeking to partner with their ERP or best-of-breed software vendors to create net new innovations for their supply chains. This compares to 19 percent that are looking to do so through custom or internally developed solutions.

The report says that almost three-quarters of automotive, aerospace and defense companies with revenue of over $1 billion plan to spend more than $250,000 in 2007 for new supply chain technology projects.

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