AMR Research Study Finds Adoption and Spending on Supply Chain Risk Management Will Increase Substantially in 2007


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Sarbanes Oxley : Technology : Survey

AMR Research Study Finds Adoption and Spending on Supply Chain Risk Management Will Increase Substantially in 2007

46% of Firms Surveyed Plan to Implement or Evaluate SCRM Technology in Next 12 to 24 Months

Mark Hillman
Research Director
AMR Research

AMR Research released the results of an in-depth field study on the state of the supply chain risk management (SCRM) market that found 46% of firms plan to implement or evaluate SCRM technology in the next 12 to 24 months. SCRM has emerged as a critical supply chain management discipline due to the business need for global sourcing strategies, increasingly complex contract manufacturing relationships, and the greater number of natural and political events that can disrupt the supply chain.

?As firms move to leaner operating models and leverage global sourcing models, uncertainty in both supply and demand is growing along with supply chain complexity,? said Mark Hillman, research director, AMR Research. ?As a result, the need to manage risk in the supply chain is on the rise.?

For firms in many industries, external events are largely responsible for the greater corporate focus on managing risk. The survey results reveal that supplier failure and continuity of supply is the number one risk factor for 28% of firms. The Enron scandal and the emergence of Sarbanes-Oxley compliance, the 9/11 terrorist attack, SARS and avian flu threats, the Asian tsunami and Hurricanes Katrina and Rita, and high-profile business failures have forced companies to evaluate how well-prepared their organizations are to handle catastrophe. For other firms, strategic and execution risks are front of mind, such as hitting a launch window for a short lifecycle product.

Additional survey results include:

• 33% of firms say they have dedicated budget line items for SCRM activities.

• 54% of firms plan to increase their budgets for SCRM over the next 12 months. Of those firms, the average spending increase will be 17% year over year.

• The top areas of application spending to support SCRM are sales and operations planning, inventory optimization, business intelligence and supply chain analytics, and supply chain visibility and event management applications.

Research and Advice that Matters: AMR Research is the No. 1 advisory firm focused on supply chain, enterprise applications, and infrastructure. Founded in 1986, AMR Research provides advisory services and peer networking opportunities to supply chain and technology professionals in the manufacturing and retail sectors.

To learn more about our research and services, visit www.amrresearch.com.

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