News and Trends From Across the Food Supply Chain

For the second consecutive year, the cost of unsaleables has gone down for consumer products manufacturers.


After several slow years, the market grew by more than 5 percent in 2004. The market was $1.07 billion in 2004 and is forecasted to reach more than $1.34 billion in 2009, according to a new ARC Advisory Group study, "Warehouse Management Systems Worldwide Outlook Through 2009."

"Based on the number of acquisitions and mergers in this market-there were more than 20 acquisitions or mergers of companies with WMS solutions-the market's growth has been surprisingly strong," says Steve Banker, service director for supply chain management at ARC. "While some acquired companies with WMS solutions can expect to continue to grow their revenues, historically mergers and acquisitions have more often served as a drag on growth."

Companies that were active in 2004 and 2005 included:
- Oracle, which acquired PeopleSoft in December 2004. Previous to this, PeopleSoft acquired JD Edwards;
- Infor, which acquired Lilly Software Associates, NxTrend and daly.commerce between March and September 2004;
- Retalix, which acquired OMI International in January 2004, and IDS earlier this year;
- RedPrairie, which acquired LIS, a prominent European supplier, in February 2004, and, in turn, was acquired by Francisco Partners, a private venture fund, in May;
- HighJump Software, which was acquired by 3M in January 2004;
- Catalyst International, which was acquired by ComVest Investment Partners in September 2004; and
- Yantra, which was acquired by Sterling Commerce in January 2004.

According to the report, though, depending on the research cited, 50 percent to 80 percent of acquisitions never produce the anticipated benefits. The WMS market withstood the surge in acquisitions this year; the true test will be to see how well the acquired companies' revenues hold up in coming years, it concluded.

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