With today's longer, more complex supply chains and compressed schedules, progressive manufacturers are once again looking to supply chain management (SCM) tools to cut costs, increase efficiency and enhance customer service. Tactics to meet these goals include improving data accuracy and timeliness, simplifying integration of SCM tools with systems within and outside the four walls, enhancing supply chain security and optimizing the movement of goods while cutting, or at least controlling, logistics costs and inventory. Perhaps most important is the need to increase flexibility to enable proactive responses as dynamic situations change.

In response to this wish list, traditional SCM application providers are broadening product offerings and integration capabilities. Not only are the lines between once finite supply chain planning, execution and collaboration applications being erased, but providers of other systems like enterprise resource planning (ERP) and advanced planning are aggressively adding and enhancing supply chain functionality. To prevent inroads from ERP vendors, "SCM suppliers are ... increasing their vertical industry focus and domain expertise and ... offering new services with a much heavier consulting component," according to a report from ARC Advisory Group.

Whatever the source of the tools, supply chain improvements are delivering better visibility, reporting and diagnostics as well as interoperability with other systems in-house as well as at supply chain partners.

"We're working toward a seamless supply chain with event-based messaging," reports Jeff Kissling, chief technology officer and senior vice president at Manugistics Group Inc. (Rockville, MD), a major player in the supply chain management space. "Everything becomes event-based. Traditional applications become the input/output to a new generation [of software]."

With its WebWORKS architecture, Manugistics can provide a common look and feel as well as security across all applications. "Our applications are able to respond to internal events as well as to events generated by third-party applications," explains Kissling. "This is one way to create common views across the supply chain as well as create views into other people's data."

With demand for flexibility, interoperability and real-time or near real-time data delivery converging, manufacturers are increasing investments in SCM applications. AMR Research estimates that, after several years in the doldrums, the market for supply chain planning, collaboration and execution software in 2004 to be $5.5 billion, up 5% from 2003's $5.2 billion.

Going forward, ARC Advisory Group forecasts a 7.4% compounded annual average growth rate for the next five years. This will push the SCM market to $7.4 billion in 2008.

The renewed attention on SCM stems from efforts to cut costs, boost bottom lines and improve customer service without increasing inventory. A survey by Aberdeen indicates supply chain disruptions represent a significant expense ranging from hundreds of thousands to tens of millions of dollars annually for many manufacturers.

In an effort to control disruptions, much of the action in SCM relates to event management or what is sometimes called visibility or track and trace. "Factors such as increased outsourcing, supplier collaboration and the pursuit of perfect demand information have spurred the need for applications that provide better management visibility across the enterprise," says a report from AMR.