Supply Chain Not Net-Ready In Europe, Says IDC

PARIS (04/06/2000) - Internet-based supply chain management (SCM) services are slow to take off in Europe because the market is not yet ready for them, according to a new study released yesterday by research group International Data Corp. (IDC).

A number of factors are causing companies to resist managing supplier relationships over the Internet, according to one of the authors of the report, Mirko Lukács, European services expertise center manager with IDC.

"Security issues dominate the underlying lack of enthusiasm," Lukács said.

Many smaller companies are reluctant to switch from closed EDI (electronic data interchange) systems to those running across the public Internet, he said. This acted as a brake on the larger companies buying from them, which are also unable to make the move.

Businesses will be forced to adopt such integrated ways of working, however, to respond to the increasingly customer-centric or demand-driven nature of commerce. Consumers, he said, are becoming the most powerful part of the supply chain, demanding increased product availability, delivery reliability, greater variety, and tailored solutions.

Service providers, on the other hand, are eager to develop Internet-based supply chain management systems, but have had to sell what businesses are asking for, he said. However, there will experience a significant surge in demand for SCM integration services as barriers to Internet connectivity in Europe disappear. This, he warned, could mean service providers experience staff shortages as demand takes off.

The full report, "Internet Impact on Supply Chain Management Services," is available from IDC.

IDC is owned by International Data Group Inc., the parent company of IDG News Service.

IDC, in Framingham, Massachusetts, can be reached at +1-508-872-8200, or via the Web at http://www.idc.com/.

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