banking on the supply chain

The last six months of the year are shaping up to be a bonanza for vendors of supply chain technology. A new study from Aberdeen Group shows that companies have big spending plans. For example, 53 percent of mid-sized companies said they planned to spend more on new supply chain technology than they did last year. In addition, two-thirds of large enterprises planned to spend over $300,000 and 35 percent planned to spend more than $1 million. Only 8 percent of the 208 companies surveyed said they would spend less than last year.

"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."

The globalization of the supply chain and more customer-specific fulfillment mandates appear to be driving an increased need for supply chain technology. The Aberdeen report says that supply chain executives are seeking new capabilities and technology features for their next-generation supply chain solutions.

That's not to say survey respondents are no longer interested in cutting supply chain costs. Twenty-eight percent of the respondents cited cost cutting as their primary reason for investing in technology. However, 72 percent have other motivations, like the desire to meet customer mandates more efficiently, minimizing demand/supply imbalances, and being able to support profitable sales growth.