ARC Study: Material handling control systems crucial to supply chain visibility

Dedham, MA  December 14, 2001  The North American market for material handling control systems (MHCS) software and services hit nearly $494 million in 2001 and will grow at a compound annual growth rate of 13 percent over the next five years, according to a new study from research consultancy ARC Advisory Group.

In the study, "Material Handling Control Systems for North America Outlook," ARC says that while North America currently lags behind Europe and Asia in MHCS adoption, leading European material handling suppliers are moving into the New World through acquisitions, positioning the market for high growth ahead.

Sal Spada, ARC director of discrete industries, explained that companies are looking to improve their bottom lines by optimizing the sourcing, manufacture and delivery of goods. This requires greater coordination with customers and suppliers, which in turn demands greater supply chain visibility. "To be effective, extending the supply chain visibility depends upon greater reach of information on inventory in transit, work in process and inventory in warehouses and distribution centers," Spada said. "As a result of this increased supply chain focus, MHCS solutions have taken on greater importance."

ARC noted that MHCS solutions are able to provide the real-time and historical data that companies need to implement improvements in service or manufacturing processes and to make decisions that will have impacts across departmental boundaries within their enterprises.

MHCS solutions can also automate business processes, thereby eliminating manual errors, and these solutions can be used to provide information directly to other units within a company and even suppliers, according ARC. "Overall, the importance of MHCS solutions is to provide a greater degree of collaboration in the extended business enterprise," the consultants concluded.