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Supply-Chain App Market Taking Off

There's a flurry of activity in the market for supply-chainmanagement applications, used to coordinate the flow of material between businesses and their suppliers and distributors. The $3.9 billion market is poised to quadruple over the next five years, according to AMR Research.

Hewlett-Packard has struck a deal with i2 Technologies Inc., the leading supply-chain management vendor, to create a supply-chain Web portal for electronics companies. IBM and J.D. Edwards & Co. have plans for an integrated system that combines J.D. Edwards' Internet-based supply-chain software, called xtra@, with IBM's servers, E-business, messaging, and security software. And enterprise resource planning vendor Lawson Software Inc. is moving into the supply-chain market via a development and marketing pact with Prescient Systems.

Earlier this month, Logility Inc. added collaboration capabilities to its supply-chain package, making it possible for businesses to create online communities with partners. Logility also plans to offer its applications as a hosted service. And Manugistics Inc. plans to upgrade its business- planning and collaboration tools to help companies that do business on the Web personalize ordering, speed delivery, and build to order.

As more companies buy and sell online, they face increased pressure to compete on price and service because their customers have access to more information and choices. Analysts say that pressure is directly related to supply- chain efficiencies and will drive demand for technology that lets companies configure products to order, track orders, and respond rapidly to market changes.

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