The global supply chain solutions industry size reached USD 20.45 billion in 2022 and will witness a healthy CAGR of 15.0% during the forecast period 2023-2030, according to the “Supply Chain Solutions Industry Data Book, 2023 – 2030,” published by Grand View Research. The rising adoption of the cloud for smart manufacturing operations and penetration of digital platforms have played a vital role in streamlining the supply chain. The advent of Industry 4.0, cloud computing, IoT connectivity, AI, and analytics has enhanced the operational efficiency of products and factories. Stakeholders are likely to seek an organic approach to tap the potential to boost the agility of the supply chains.
Innovators have exhibited traction for automation, AI, and analytics to overcome supply chain uncertainties, including inflation, geopolitical events, component shortages, unanticipated demand surges, and climate change. State-of-the-art technologies can call forth innovations and investments. AI has become sought-after to leverage predictability and to help track and monitor performance.
Harnessing Dynamics of Supply Chain Analytics
The rising footprint of predictive, descriptive, and prescriptive analytics has fueled the penetration of supply chain analytics. Organizations are likely to show an inclination for analytics to boost accuracy in planning, enhance margins, minimize costs, and attain a lean supply chain. Advanced analytics could be the game changer to ensure alerts arrive on time and reduce risk at less sustainability impact and little cost. The supply chain analytics market was valued at USD 6.13 billion in 2022 and will witness around 17.8% CAGR from 2023 to 2030. Businesses are expected to use software products (with the help of AI) and blockchain technologies to predict and forecast events. Companies will likely seek analytics to foster real-time decision-making, prompting stakeholders to bolster their portfolios.
Leveraging Vendor Risk Management Trends
Vendor risk management (VRM) has emerged as a promising portfolio to help enterprises monitor, assess, and manage risk exposure from third-party suppliers. Notably, fintech companies have banked on virtual risk management programs to bolster outsourced services and protect sensitive data processing. Amidst a surge in cyber threats, vigilance and transparency will provide the impetus to risk managers. Firms are poised to use bespoke solutions, including cognitive technologies, to minimize time-consuming tasks and assessments. Risk management programs that can reduce costs, enhance efficiency, identify risks, and augment return on equity will gain ground. The vendor risk management market size was pegged at USD 8.18 billion in 2022 and will observe a robust CAGR of 15.1% during the forecast period.
With shifting dynamics, risk managers are streamlining, fostering, and simplifying processes. Predominantly, outsourcing to third parties has become a promising proposition to reinforce efficiency and minimize costs. Automation of VRM has provided a fillip to organizations to manage risk exposure, deter data breaches, enhance vendor performance, and augment RoI. Despite surging regulatory requirements, VRM has become the go-to solution for real-time monitoring, increasing accuracy, agility, and efficiency.
Unfolding Growth Potentials
Businesses are cashing in on analytics to underpin customer expectations as a dynamic supply chain can help companies retain old customers and attract new ones. End-users can explore analytics to monitor real-time supply chain variations, forecast risk management, underscore product placement, and predict future purchase patterns. As such, incumbent players are likely to cash in on the trends and prevailing opportunities to stay ahead of the curve:
- The application of smart glasses is slated to receive an uptick to propel productivity and efficiency across the business vertical. Besides, smart sensors have come on the horizon to underscore asset efficiency, minimize operating costs, and offer insights into customer behavior,
- Procurement-as-a-service will be pronounced to foster business processes and use technology to automate mundane tasks. The service will help address risk management and enhance spending management.
- North America will account for a significant share of the global market in the wake of the growing penetration of IoT and advanced technologies across healthcare, BFSI, manufacturing, and retail sectors.
Investment Opportunities in Asia Pacific
Asia Pacific supply chain solutions industry share will witness an appreciable gain, partly due to the bullish penetration of solution vendors across China, Japan, Australia, and India. Additionally, an exponential use of data and the cloud to track and analyze supply chain activities will strengthen the position of Asia Pacific in the global market. Stakeholders anticipate fast-moving consumer goods and SMEs to inject funds into robust supply chain solutions. The need to streamline inventory and manage the flow of materials and goods, including deliveries, orders, and forecasts, will accentuate regional growth. To illustrate, logistics service providers can use analytics for faster delivery, shorter lead time, and cost savings.
At a time when supply chain disruptions have had a pressing impact on the global outlook, leaders are expected to count on cloud-based digital solutions for a resilient and agile supply chain. In doing so, organic and inorganic strategies, such as technology advancements, product offerings, innovations, mergers & acquisitions, and collaborations, could be noticeable. To illustrate, in November 2022, Amazon Web Services announced the launch of the AWS supply chain to foster supply chain visibility and provide actionable insights. The company expects the new cloud application to boost customer experience, reduce costs, and lower supply chain risks.