Giving companies the ability to accurately project a surplus of inventory or lack of supplies is the objective of an Ann Arbor company's latest software release.

The software release comes as Llamasoft - already ready to grow by 10 employees within a year - is positioning itself for a high-stakes competition with IBM for control over the lucrative supply chain management software market.

Llamasoft has  revamped its primary product to capitalize on demand for "inventory optimization" technology. The firm has added product management capability to its Supply Chain Guru software and redesigned the software's look and feel. 

CEO Don Hicks called it the “biggest release of our software ever.” The new product management element is “a whole new segment for us,” he said.

Llamasoft is also poised for an office move in downtown Ann Arbor. The firm is hopping about three blocks from its 2,000-square-foot office on South Fifth Avenue to 6,500 square feet in the First National Bank building on South Main Street. The company also recently established a small sales office in Germany.

Llamasoft, which has about 25 employees, “could easily be at 35” within a year, Hicks said.

That’s because demand for supply chain management software has temporarily ebbed as large corporations push major budget decisions off a few months or until the next fiscal year, said Toby Brzoznowski, Llamasoft’s executive vice president of sales and marketing.

Brzoznowski said Llamasoft is positioning itself to capitalize on a resurgence in demand as customers approve new spending for the next fiscal year. The company expects growth of 25 percent to 50 percent within a few months.

“Those capital purchases are starting to come back,” he said. “We’re positioned with two or three of the top 20 companies in the world that are about ready to buy our software.”

Overall, though, the supply chain management software industry has been relatively resilient in the face of the global economic crisis.

Boston-based research firm AMR estimates that annualized growth in the industry has slowed from 7 percent to between 2 percent and 3 percent. The firm projects that the industry will grow to $8 billion by 2010, a 25 percent increase from $6.4 billion in 2007.

Llamasoft’s supply chain management software is finding a welcome audience ranging from major corporations, especially food and beverage companies, to Third World food-distribution efforts. The firm identifies its top competitor as IBM, which in January acquired one of Llamasoft’s chief rivals, ILOG, a $68 million company.

It “sounds like a big task,” Hicks said. But “what we’ve seen from our competitor is a slowdown in innovation. This is really our time. We are shooting to be No. 1 in the world. We already have the best technology, we have the momentum. Now we just have to be No. 1 by sales volume. That’s what we’re shooting for.”

Contact AnnArbor.com’s Nathan Bomey at nathanbomey@annarbor.com or (734) 623-2587 or follow him on Twitter.