The Supply Chain Management (SCM) market is seeing significant development, with an estimated global growth of $13.4 billion by 2017. North America and Western Europe remain as prime consumers of SCM software with 77% market revenue. However, Latin America and Asia also present with strong economic growth, which is coupled with modernization of construction and manufacturing industries.
Small to large businesses continue to have strong global supply chain and complex offshoring relationships, making SCM adoption more important. Many factors are driving the market, including the developments in cloud-based service and advanced analytics, which opened up opportunities for companies to integrate ERP, SCM and other software into their operations. The following market trends have also driven the SCM market:
- Omni-channel retailing. Leading to the rise of Warehouse Management System adoption, omni-channel retailing also increased the number of physical stores moving towards e-commerce.
- Low-cost manufacturing hubs. Their emergence in the Asia Pacific is expected to be the main driver of Manufacturing Execution System’s growth.
- New sourcing markets and selling destinations. With globalized supply chains, this calls for simulation and scenario-based modeling and boosts analytics-based procurement solutions.
- Reduced transport costs. As an important agenda for companies involved in the fuel/energy market, decrease in transportation costs boosts Team Management Systems adoption.
- Reduced time to market and shortening of product lifespans. The need for reduced time to market new products and services as well as the shortening of their lifecycles has driven the SCM market. Cloud computing will also accelerate this trend and fuel SCM software adoption. Through cloud-based technologies, it becomes easier to penetrate vast markets of emerging economies.
Companies need to appreciate the need for strategic SCM to achieve success. As the competition among BoB companies grows, it also becomes more important for ERP vendors to extend their ERP systems to more competitive subscription-based models. On the other hand, large ERP vendors focus on creating analytics-based solutions inorganically to respond to the growing need of clients for real-time purchase information.