SDCExec.com |

Dedham, MA — September 4, 2007 — It is difficult for large multi-billion dollar markets to grow rapidly, but the supply chain execution (SCE) market will achieve that feat, according to a new study from analyst firm ARC Advisory Group.

The worldwide market for SCE is expected to grow at a compounded annual growth rate (CAGR) of 9.9 percent over the next five years. The market was $4.6 billion in 2006 and is forecasted to be over $7.4 billion in 2011, according ARC.

Supply chain execution includes collaborative production management for process (CPM-P) and discrete (CPM-D) industries, transportation management systems (TMS), and warehouse management systems (WMS).

"It is surprising how fragmented this market remains," according to Steve Banker, Ph.D., service director for Supply Chain Management at ARC Advisory Group. "There are over 250 suppliers. In 2006, the top 10 suppliers' shares of the total market had barely changed from 2003, despite the fact that virtually all of the top 10 suppliers had made SCE acquisitions."

Dr. Banker is one of the principal authors of ARC's "Supply Chain Execution Worldwide Outlook: Market Analysis and Forecast Through 2011."

A Diverse Market

SCE is a diverse market composed of enterprise resource planning (ERP), best-of-breed, and automation suppliers. Automation suppliers mainly offer production management applications. An analysis of market share gains and losses among the top 10 vendors by type of supplier shows that ERP and automation companies have gained market share at the expense of best-of-breed suppliers.

Historically, ERP suppliers' SCE applications were not as functionally rich as those offered by best-of-breed suppliers. However, because they were integrated to the rest of their applications, they could argue that they better supported holistic process flows and could provide better visibility to key executives who used their SCE applications. Further, their solutions often have a lower total cost of ownership (TCO).