Lean Thinking as a result for growth in SCM market

Filed in archive Point of view on August 26, 2006

I saw an interesting analysis by Brian Tinham of Manufacturing Computer Solutions on the influence of lean thinking on SCM market. Below you can read a summary of it:

Manufacturers facing increasing competition, cost and margin pressures are increasingly turning to supply chain management systems to support the next phase of their lean strategies - and that's throughout batch, process and discrete industries.

"Manufacturers are finding that their supply chains are becoming increasingly complex, and are having a greater impact on their overall business," observes Adam Jura, manufacturing technology analyst at Datamonitor.

And that's come at a time when the capabilities of modern SCM suites have improved significantly, while software vendors are increasingly offering solutions that fit the needs - and budgets - of smaller manufacturers.

"These factors are causing growth in the SCM market," says Jura. Indeed, he estimates that supply chain management software revenues will reach $2.5bn across manufacturing world-wide by 2010 - up from $1.6bn in 2005 - driven by business strategies like lean thinking and demand-driven supply chains.

"What makes for interesting reading is the high priority being given to products and really driving revenues," says Jura. "Product differentiation, time to market and post-sales support are major focuses for manufacturers. For many of the associated processes, these companies will be looking to their technology partners for support."