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IDC: Asia/Pacific SCM Market Thriving

The need to streamline costs in the face of the current uncertainty in the global economy is expected to boost Asia/Pacific's (excluding Japan) supply chain management (SCM) solutions sector into a US$2 billion industry by the end of 2002, according to a report released by research firm IDC Friday.

IDC said utilization of advanced planning instruments and improved logistics, warehousing and transportation mechanisms could allow the market to grow at a compounded annual growth rate (CAGR) of 20.2 percent, making it a $4.4 billion industry by 2006.

"In Asia/Pacific, the uptake of SCM solution has been largely attributed to the adoption of material resource planning (MRP) and enterprise resource management (ERM) systems," said Robin Giang, research manager, IT Solutions, IDC Asia/Pacific. "The enterprise-centric scope of SCM has made it easier for organizations to accept the idea that the entire supply chain from suppliers to trading partners to customers can be seamlessly integrated to bring forth cost savings and improved services to the end-user customer."

Asia/Pacific SCM solutions are currently a $1.8 billion market, according to IDC. The manufacturing sector is overwhelmingly the largest user of SCM solutions, making up 60.4 percent of the market. The second largest user is distribution, making up 10.3 percent of the market. Communications, the public sector and financial services make up 7.8 percent, 4.8 percent and 4.4 percent respectively.

IDC noted that as the economy becomes more globalized, SCM solutions are becoming a key factor in giving companies competitive advantage, allowing them to plan their businesses based on comprehensive analysis of information, and thereby controlling costs and creating efficiencies.