Risk management investment increases

10 January 2007
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10 January 2007 | Paul Snell

Almost half of US companies are planning to implement supply chain risk management (SCRM) technology in the next two years, according to a new study by AMR Research.

The report, Managing risk in the supply chain - a quantitative study, said that global events, such as hurricane Katrina, increased regulatory compliance, and responses to previous supply chain failures were behind the uptake. Yet, despite 80 per cent of companies expressing interest in systems, the introduction of SCRM technology is quite low

It also found that 33 per cent of firms had already introduced the technology. But 21 per cent said they had no plans to introduce a new programme, with most of these stating they were happy with their current processes.

Spending on SCRM technology is increasing. Around 10 per cent of firms interviewed said they spent more than $5 million (£2.58 million) in 2006 on supporting their SCRM systems. A further 26 per cent said they spent between $1 million and $5 million (£515,000 to £2.58 million). Nearly 55 per cent of companies were expecting to spend more on systems in 2007. An average increase of 17 per cent was predicted.

The report said that some firms were beginning to refine their SCRM process by taking calculated risks. It said: "Firms that successfully seize the opportunity will gain competitive advantage."

The study interviewed 89 US companies in manufacturing and retail.


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