Supply Chain Management Market Size, Trends, Share, Growth | Report 2023-2032
The global supply chain management market was surpassed at USD 18.5 billion in 2021 and is expected to hit around USD 46.61 billion by 2030, growing at a CAGR of 10.81% from 2022 to 2030.
The growth of the market can be attributed to advancements in digital technologies, increasing demand for improved supply chain processes visibility by end-users, shipment information transparency, and bolstering the growth of the retail & e-commerce sector. SCM enables supply chain managers to track precisely where their existing operations are performing or underperforming. SCM also generates reliable, data-driven solutions and improves businesses' insight through cross-functional access. As a result, end customers are more likely to embrace supply chain management software.
The increasing concerns among enterprises regarding the privacy and security of confidential data are major factors restraining market growth. Data from businesses may leak via the internet and be accessed by unauthorized users, a rising concern among companies. However, the adoption of advanced technologies such as the internet of things (IoT), blockchain, cloud computing, artificial intelligence (AI), and robotics automation, among others, are enabling the secured digital supply network in the near future.
The COVID-19 pandemic illustrated long-standing vulnerabilities in global supply networks. Lockdowns hindered or delayed the movement of raw materials and interrupted manufacturing across multiple industries, putting supply chains under tremendous strain. This disruption has increased supply chain management (SCM) demand. The COVID-19 epidemic has hit every sector, and due to social distancing norms, organizations are shifting toward digitization to assure safety. Companies focus on supply chain optimization to reduce costs, reduce inventories, and increase asset utilization.
Key players such as Infor, Microsoft, IFS, HighJump, and Coupa Software, operating in the supply chain management market, are adopting various growth strategies such as partnerships & collaborations, and mergers & acquisitions to capture maximum market share globally. For instance, in November 2020, Coupa Software announced the acquisition LLamasoft, an artificial intelligence (AI)-powered supply chain design and planning company. The acquisition expands Coupa's supply chain operations, allowing its clients to achieve significant value through business spend management (BSM). Coupa's spend management implementation core and broad market reach, combined with LLamasoft's artificial intelligence (AI) supply chain analytics and digital supply chain, provide an opportunity to incorporate digital transformation solutions.
| Report Coverage | Details |
| Market Size in 2021 | USD 18.5 billion |
| Revenue Forecast by 2030 | USD 46.61 billion |
| Growth rate from 2022 to 2033 | CAGR of 10.81% |
| Base Year | 2021 |
| Forecast Period | 2022 to 2030 |
| Segmentation | Component, Deployment, Enterprise Size, Vertical, Region |
| Companies Covered | SAP SE; Oracle; Blue Yonder Group Inc.; Infor; Manhattan Associates; Coupa Software Inc.; IBMl; Logility, Inc.; Korber AG; Epicor Software Corporation |
Component Insights
Based on component, the global market is bifurcated into solutions and services. The solution segment is further classified into the transportation management system (TMS), planning & analytics, warehouse & inventory management system, procurement & sourcing, and manufacturing execution system. The solution segment accounted for the largest share in 2021 and is expected to dominate the market during the forecast period. SCM solutions are used for quality assurance, supplier management, and logistics management. SCM solutions provide benefits such as higher visibility, increased efficiency, analytics, lower costs, greater agility, and increased compliance over the complex supply chain. It assists in automating major procedures like processing orders, billing, and order tracking resulting in reducing time and administration expenses. SCM systems also identify excess materials and costs connected with shipping, warehousing, and manufacturing, which helps reduce excess inventory.
The transportation management system segment held the largest share in 2021. A transportation management system is used to plan freight movement and assist clients in efficiently planning and executing transportation activities across the supply chain. The demand for TMS has been rising rapidly because transportation management systems play a major role in supply chains, impacting every phase of the process, from planning and procurement to logistics and lifecycle management. The usage of intelligent wireless connectivity and smart sensor technology solutions to provide accurate data about vehicles to companies is expanding. With the help of this technology, the companies can provide real-time tracking data such as delivery route, current location, and the estimated time of arrival to the consumers, thus enhancing the supply chain process.
The service segment is further bifurcated into professional services and managed services. The service segment is expected to experience significant growth at CAGR during the forecast period. SCM services provide data-driven insights to companies and improve their supply chain operations. The services offer real-time predictive production cost assessment services to identify process inefficiencies and opportunities. It effectively executes data-driven sales and operations planning and inventory management to assist in cost reduction. SCM services enable the monitoring of manufacturing activities to optimize performance and reduce risk.
Deployment Insights
The on-premises segment accounted for the largest market share in 2021. The cloud-based segment is expected to experience significant growth at CAGR during the forecast period. Companies are adopting cloud-based solutions for greater adaptability and flexibility in the supply chain process. It also offers various benefits, such as increased processing capabilities, storage, cost-effective pricing structures, and a reduction in operational overhead. These benefits are fueling market growth.
In February 2019, Blue Yonder partnered with Microsoft to deploy its SCM software on Microsoft Azure Cloud. Blue Yonder offered enhanced flexibility and security to commercial customers. By integrating Machine Learning (ML) and Artificial Intelligence (AI) technology into the company’s SCM platform, Blue Yonder focused on developing cutting-edge applications for customers and partners on the SCM platform. Blue Yonder enterprise customers can enhance and analyze datasets across their supply chain by connecting their digital assets. This enables them to make smarter, more effective AI and ML-based decisions.
Enterprise Size Insights
The large enterprise segment accounted for the highest market share in 2021 and is expected to dominate the target market during the forecast period. The growth can be attributed to increased demand for constant monitoring systems and automation features such as advanced shipment notification management, customizable notifications, in-transit status updates, user-configurable dashboards, and visual supply chain maps in numerous large-sized industries. SCM also provides access to precise real-time freight analytics and the flexibility to generate reports enabling large enterprises to make better business decisions such as supply planning, inventory planning, and distribution planning, among others. The market is growing due to a considerable increase in the requirement for software in large enterprises to collect essential business data such as inventory volumes, expected sales data, supplier details, and others. For instance, in November 2022, Microsoft announced the Microsoft supply chain platform launch and offered a demonstration of the platform via Microsoft Supply Chain Center. Microsoft's supply chain center is designed to be compatible with an organization's supply chain applications and data. Supply chain agility and stability are closely related to how well enterprises integrate and coordinate their data across all key platforms. The Microsoft supply chain platform lays the groundwork for major organizations to design or independently adopt solutions for specific supply chain needs spanning Azure, Microsoft Teams, Power Platform, and Dynamics 365.
The small and medium-sized enterprise (SMEs) segment is expected to experience the highest CAGR of 11.5% during the forecast.t period. SCM offers flexibility, scalability, and cost savings in supply chain operations. Implementing SCM solutions and services would increase SMEs' profitability and intended outcomes and improve operational efficiencies. Startups and SMEs were in a precarious situation as they struggled to control fluctuating demand, resource efficiency, and growing costs in the supply chain due to the COVID-19 pandemic. For instance, in April 2019, Locus, a global B2B SaaS company, announced the launch of QuickStart for small-scale enterprises (SMEs). QuickStart is a self-service version of the product suite designed to assist SMEs in enhancing their supply chain efficiency in the wake of the COVID-19 pandemic. With QuickStart, the company aims to provide customers with tools to improve and evaluate the situation.
Vertical Insights
The manufacturing segment accounted for 23.4% of the market share in 2021 and is expected to dominate the target market during the forecast period owing to increase demand for automation in the supply chain process in the manufacturing industry. Manufacturers can improve their product manufacturing processes and lower operating costs by implementing a dependable SCM system. For instance, in March 2022, Logility, Inc. announced software advancements to enhance planning capabilities across the product lifecycle. Manufacturing clients of Logility's digital platform can analyze the global relationships of their integrated supply chain via supply chain network maps.
The retail and e-commerce segment is expected to experience the highest CAGR during the forecast period. E-commerce SCM focuses on purchasing raw materials, manufacturing, and distributing the product at the right moment. It includes managing supply and demand, warehousing, inventory monitoring, order processing, and client delivery. SCM increases network transparency and helps monitor the performance of all activities in production, warehousing, and distribution. This enables even more comprehensive control and tracking of all operations, from procurement to final goods shipment to the end user. Furthermore, effective SCM assures on-time deliveries, which has a direct impact on customer interactions. E-commerce-based SCM can drastically cut manufacturing, and distribution costs, resulting in increased profitability.
Regional Insights
North America accounted for the major market revenue share in 2021 and is estimated to dominate the market during the forecast period. The presence of a huge number of adopters of such software in the region and the fact that the region is advancing technologically contribute to the market growth. The presence of major key players such as IBM, Microsoft, Telus International, and Infor, among others operating in the region, is another key factor contributing to market growth. Therefore, due to the factors mentioned above, the usage of SCM software in North America is high and contributes more to revenue generation.
Asia Pacific is anticipated to register the highest growth during the forecast period. The growth of the market in the region is attributed to growing opportunities in the region along with various investments made in SCM.
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