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The six categories of software detailed so far provide the following functionality:
Additional functionality required for the supply chain – beginning to end - includes design and development. Integrating these functions is necessary to optimize and manage the supply chain from beginning to end. This market is potentially huge. MAR Research predicts a 48% compound annual growth rate for SCM software – growing to $18.6 billion by 2003. Not only do the various functions of the software systems need to be integrated, but there is also the need to create a framework to link downstream suppliers to the larger suppliers and to customers (buyers) in order to gain the most from the optimization of the entire supply chain. This is known as “visibility software” and allows any company in the supply chain to share data with other companies in the chain, so that inventory, orders, and the state of production are visible to everyone in the chain. U.S. Commerce Department reports in 1997 showed the retail value chain holding some $1 trillion in inventory, mostly to compensate for uncertainties in supply and demand. Despite the fervent discussion of supply-chain collaboration capabilities and evolving standards such as collaborative planning, forecasting and replenishment, or the creation of "frictionless" Internet markets in vertical industries, the root cause of these problems often isn't addressed. [x] |
This report was completed in October 2000 for the class B2B Electronic Commerce given by Prof. Carmel in the program of Management Of Global Information Technology at the Kogod School of Business at American University in Washington D.C.
