As in many industries these days, controlling costs is foremost on the minds of manufacturers in the market for supply chain management (SCM) technology. As the global supply chain continues to expand, companies are looking to employ software that can help manage their transportation networks as a single entity — for cost as well as control and visibility reasons, says AMR Research vice president John Fontanella.

According to AMR's recent study, "The Supply Chain Management Spending Report, 2006-2007," U.S. manufacturers juggle more than 30 contract manufacturing relationships on average, and to help manage this complex web of relationships, 27% of firms with $1 billion or more in revenue review their supply network on at least a semiannual basis.

Following a boom in the late 1990s, the SCM market experienced a downturn; today, the approach to SCM is "pragmatic," according to AMR, "with most companies building an SCM infrastructure based on a foundation of ERP investments," according to the recent report, "The Supply Chain Management Applications Report, 2005-2010."

Fontanella says that major ERP vendors including SAP and Oracle appear to be "doubling back and refocusing" on gaps in the supply chain execution area in particular. He cites as examples Oracle's new

target="_blank">global trade module and enhanced transportation management features and modules expected from SAP later this year in the latest release of its mySAP.com e-business platform.

On the planning side, Fontanella says the ongoing recovery of SCM purveyor i2 Technologies is the big news these days, as the company continues to grow its market share as well as its revenue and profitability.

Market Trends

"Manufacturers are facing increased complexity and risk, which is hindering their ability to grow profitably," says Ken Ramoutar, director of applications product marketing at SCM vendor Sterling Commerce. AMR's Fontanella agrees that risk remains a big issue for manufacturers, especially in terms of inventory optimization: where and how much to hold are paramount concerns, he says.

Fontanella also calls out global trade management and the need for compliance with government regulations as major trends in the SCM space. Nicole German, vice president of marketing and communications for SCM vendor Descartes, echoes this, pointing to global adoption of standards-based logistics practices both for improved communication and streamlined business processes.

Other trends Descartes has identified include: