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The global supply chain management market size was valued at USD 21.26 billion in 2022 and is projected to reach USD 47.29 billion by 2029, exhibiting a CAGR of 12.1% during the forecast 2022-2029.
North America accounted for a market value of USD 6.39 billion in 2021. Based on our analysis, the global market exhibited an average growth of 9.6% in 2020 as compared to 2019. In the scope, we have considered supply chain management provided by key players such as IBM Corporation, Kinaxis, SAP SE, Oracle Corporation, and Blue Yonder.
SCM is the process of implementing, planning, and controlling a supply chain's operations to fulfill customer requirements. SCM includes the process that transforms raw materials into final products and encompasses a trading partner community engaged in satisfying end customers.
Moreover, industries are focusing on the implementation of advanced technologies in SCM.
Increase in Adoption of Digital Technology Platforms and Initiatives by Government amid Pandemic to Boost Market
Pandemic-related lockdowns, labor shortages, geopolitics, and even weather significantly impacted the global supply chain, leading to supply chain bottlenecks, increasing costs, and disruption. In response, the organization started adopting different strategies such as shoring vendors and vertically integrated supply chains. Due to this, the market witnessed growth among organizations.
However, the COVID-19 pandemic has prompted companies around the world to implement IT software based on digital technologies to streamline their operations. The increasing digitization of enterprises and increasing government policies favoring the implementation of digital technology software drive the market's growth. For example, according to an IDC report, investment in global digital transformation in 2020 reached USD 1.5 trillion, with investments from small businesses and large corporations surging.
Furthermore, in May 2020, the Chinese government introduced the digital transformation plan with funding of USD 1.4 trillion to promote digitalization. The digitalization plan stimulates the adoption of advanced technologies such as cloud computing, 5G, IoT, AI, and various AI-driven IT software to automate local businesses in China. Such increases in government funding for digitalization and the surge in the adoption of digital platforms among SMEs and large-scale organizations around the globe have propelled the market growth.
Such an upsurge in the government's implementation of digital technology platforms and initiatives for digitalization during the COVID-19 pandemic slightly increases the demand for supply chain management solutions.
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Rising Advent of E-commerce to Aid Supply Chain Management Market Growth
With the advent of e-commerce, firms have started selling their products online, which has helped reach a larger audience than ever before. This trend also increased competition among companies trying to win customers’ cores by providing them with better products and services at affordable prices.
Ecommerce made shopping more convenient and accessible for shoppers by offering multiple payment options such as debit cards, credit cards, and easy return policies to ensure customers are satisfied with their purchases.
These technologies help businesses track sales performance hourly, understand what their customers want, and how they can improve their business strategy to meet those needs. From sourcing raw materials to delivering products to customers, B2B Supply Chain Management (SCM) encompasses all levels of transactions.
Further, the growth of e-commerce is impacting SCM in many ways. First, the growing demand for just-in-time delivery sets pressure on suppliers to deliver products faster and more efficiently. Second, e-commerce will impact supply chain management by allowing shipping companies to exchange documents electronically during the fulfillment process.
Thus, the above factors in e-commerce are considered trending factors in the SCM market.
Inclination toward Technological Advancements and Investments to Drive the Growth of the Market
AI-driven supply chains are used to drive operational efficiency and increase businesses' revenue.
These technologies are majorly leading in processes such as manufacturing, maintenance, and sales. They enable uninterrupted supply chain flow by predicting failures before they occur.
These technologies are increasingly being used to improve transparency, supply chain visibility, connectivity, and the use of SCM. Companies have taken advantage of automation to accomplish efficiencies across their supply chains for decades. This pace of change is accelerating due to technological advancements such as intelligent automation (IA). IA combines artificial intelligence and robotics to automate complex processes for machines.
Further, major players in this market are investing and integrating advanced software technologies such as cloud computing, AI, machine learning, and others in SCM. For instance,
Such an increase in the adoption and integration of AI-based and cloud based SCM software among the key players drives the market growth.
Outsourcing the Manufacturing Operations and Procurement Processes to Different Geographic Locations Creates SCM Challenges
To minimize costs throughout the supply chain, enterprises move manufacturing operations to countries with lower labor taxes and transport costs for raw materials. For some organizations, outsourcing production involves multiple countries for different parts of their products.
However, outsourcing and the company’s procurement network extend the production process globally.
Choosing suppliers in different geographical locations complicates the supply chain. Businesses need to coordinate, communicate, and collaborate with cross-border parties about manufacturing, warehousing, and logistics.
In addition, despite the increasing complexity of the manufacturer's supply chain, these parties extend or maintain fast delivery times for customers who want to receive their products on time.
Thus, there is an inherent risk of losing visibility, control, and proper management over inventory, particularly if enterprise applications are not integrated.
This requires managing diverse data structures across geographies, a major challenge for outsourcing manufacturing operations and procurement processes.
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Increasing Need for Environmental Protection and Time Reduction to Augment Segmental Demand
Based on module, the global SCM market is segmented into transportation management system, warehouse management system, sourcing and procurement, manufacturing, inventory management software, and others (order management).
Manufacturing dominated the global market, with the highest supply chain management market share in 2021. Further, the transportation management system is estimated to grow with a high CAGR of 14.2% during the forecast period. Factors, such as the need for efficient transportation due to regulations and environmental protection, cost efficiency, and time reduction, are accelerating the adoption of transportation management systems in the region. According to recent studies, about 35.0% of businesses are adopting the transportation management system for managing their transportation network.
Rising Inclination toward Cloud Computing Among SMEs and Enterprises Boost Cloud Adoption
By deployment, the market is categorized into on-premise and cloud.
The cloud segment held a major market share in 2021 and is expected to grow with the highest CAGR from 2022 to 2029. According to a survey by Accenture, around 21% of supply chain executives deployed cloud-enabled capabilities across their entire supply chains.
The rising adoption of cloud computing among enterprises around the globe aids market growth. According to the EU, around 42.0% of European enterprises have adopted cloud computing for their businesses.
Rising Adoption of Supply Chain Management Software Among Small & Medium Scale to Boost Market
In this report, the market is analyzed across large enterprises and SMEs.
Among the both, large enterprises hold the major market share in 2021 of around 51.8 % and small & medium-sized enterprises (SMEs) are predicted to be the fastest growing during the forecast period. This is primarily attributed to rising adoption of the supply chain management software among the small and medium scale manufacturing companies around the globe.
Also, according to the World Bank Organization, SMEs accounted for the majority of the business around the globe and contributed around 50.0% of the employment.
Rising Adoption of SCM Software Among Discrete Industries to Boost the Market
Based on industry, the market is divided into discrete, process, and others.
Discrete industry dominated the global market with a market share of 52.6% in 2021 and estimated to grow with a CAGR of 12.8% during the forecast period.
The demand for discrete industry is increasing due to rising adoption of SCM solutions in manufacturing. For instance,
Thus, the above facts contribute to the growth of the discrete industry in SCM.
North America Supply Chain Management Market Size, 2021 (USD Billion)
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Geographically, the market is divided into five key regions, North America, South America, Europe, the Middle East & Africa, and Asia Pacific. They are further categorized into countries.
The North America Supply Chain Management Market size was valued at USD 6.39 Billion in 2021 and is growing at a CAGR of 10.7% from 2022 to 2029. North America dominated the global market with a share of 33.22% in 2021. The market growth is driven by the growing adoption of SCM solutions across this region. According to recent research, SCM solution usage in the region grew by 9.0% Y-o-Y in 2021. The logistics industry in the U.S. accounts for about 10.0% of the total GDP and is expected to reach around 175.0 trillion in 2022. As the logistics industry is witnessing growth, the demand for SCM will also increase in the coming years. According to the Bureau of Labor Statistics (BLS), there are over 5.0 million transportation and warehouse workers in the U.S. alone. Multinational corporations are investing in the U.S. logistics industry to facilitate the flow of goods in the world's largest consumer market.
Key players in the region are focusing on offering customers advanced solutions to improve efficiency and customer experience. For instance, Oracle announced a cloud analytics solution that offers oracle fusion cloud supply chain & manufacturing customers the information needed to understand, detect, and resolve problems faster throughout the supply chain.
Asia Pacific is estimated to hold the highest CAGR in the forecast period. The region's growth is mainly due to evolving industry verticals, including BFSI, manufacturing, and logistics & transportation. Several key regional vendors are focusing on developing and introducing advanced SCM solutions to cater to the rising demand for resilient supply chain operations among these verticals.
Further, players in the region are investing in developing logistics facilities among various countries. For instance, Singapore-based global warehouse operator GLP invested around USD 5.60 billion to develop logistics facilities in Japan. Development in logistics facilities is boosting the demand for supply chain solutions for better management and improved efficiency.
The Europe SCM market is driven by the substantial rise of industry 4.0 and IoT. According to the Federal Statistical Office of Germany, the increasing need for effective production process management and the early adoption of automation resulted in 82.0% of large organizations utilizing supply chain management solutions.
As e-commerce activity peaked during COVID-19, the importance of building a more consumer-centric and purpose-driven supply chain became apparent. Nearly 80.0% of customers in the United Arab Emirates and Saudi Arabia have switched to online shopping, according to Accenture’s research. As a result, European organizations are investing more in supply chains to serve their customers better.
The South American market is estimated to grow with a considerable CAGR during the forecast period. Before the COVID-19 pandemic, 37.0% of organizations used web-accessible solutions in their South American supply chain. However, during the pandemic, there was an increase in demand for SCM solutions among regional organizations.
Strategic Acquisitions and Partnerships to Boost Market Expansion of Key Players
Key players operating in the market are entering into strategic partnerships and collaborations with technology providers. The key players adopt this strategy to integrate SCM with emerging technologies such as cloud, AI, and others. For instance,
In September 2022, Accenture acquired MacGregor Partners, a supply chain technology and consultancy provider specializing in warehouse management and intelligent logistics. The acquisition developed Accenture’s supply chain network and transformation capabilities powered by Blue Yonder technology.
In August 2022, Kinaxis acquired MPO to merge supply chain planning with real-time execution for perfect orders. Acquisition of MPO's multi-party orchestration execution and Kinaxis rapid response planning provides a real-time picture of each order throughout its lifecycle from planned commitment to final delivery.
List of the Key Companies Profiled in Supply Chain Management Market:
An Infographic Representation of Supply Chain Management Market
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The supply chain management market report highlights leading regions across the world to offer a better understanding of the user and provides in detail market analysis. Furthermore, the report provides insights into the latest industry and market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.
Value (USD Billion)
By Module, Deployment, Enterprise Size, Industry, and Region
By Enterprise Size
The market is projected to reach USD 47.29 billion by 2029.
In 2021, the market stood at USD 19.23 billion.
The market is projected to grow at a CAGR of 12.1% in the forecast period (2022-2029).
Manufacturing holds the largest share of the market
Inclination toward technological advancements and investments will drive the growth of the market.
IBM Corporation, Oracle Corporation, SAP SE, Kinaxis, Wolters Kluwers N.V., and Infor are the top players in the market.
North America is expected to hold the highest market share.
Asia Pacific is expected to grow with the highest CAGR.
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