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SaaS Solutions Growing in Supply Chain Management

High productivity and efficiency waste less resources - and SaaS can optimize transportation for manufacturing and distribution.

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The ARC Advisory Group predicts that Software-as-a-Service (SaaS) solutions will grow significantly faster than traditional software and services.

According to ARC, the supply chain management market grew 7% in the last five years. That growth would have been more if it had not been for the recession.

In comparison, the SaaS market grew at a compound annual growth rate of 20% during those same five years.

According to ARC, the overall Supply Chain Management (SCM) market includes "execution, production, warehouse, and transportation management -- as well as Supply Chain Planning -- strategic, manufacturing, and inventory planning."

Software-as-a-Service (SaaS) can encompass either multi-tenant solutions or hosted solutions particular to an individual customer.

The Transportation Management Systems (TMS) market is the only SCE market where SaaS is well entrenched. In TMS, SaaS solutions win not just because of lower price points, but also because they leverage the power of the network.

Transportation optimization has little value if companies can’t successfully tender the optimized loads.

Networked SaaS TMS solutions have a key advantage in on-boarding new carriers and in the data quality of the messaging with those carriers.

But in 2008, the industry saw SaaS emerge in the production management and supply chain planning markets. In 2009, SaaS made significant progress in the warehouse management systems market.

Ten years ago ARC began referring to production management systems as “Collaborative Production Management.” This reflected their belief that production management was not just about better processes at an individual factory.

For factories to operate well they need to collaborate with suppliers and customers, the network of factories need to synchronize their work, and that increasingly that network will be composed of not just company owned factories but factories run contract manufacturing partners.

Network centric solutions are emerging and that potential exists in production management as well.

Edited by Carolyn Allen
| supply chain | manufacturing sector | green management |

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