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.
