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The supply chain management (SCM) software market size is estimated to grow at a CAGR of 12.98% between 2022 and 2027. The market size is forecast to increase by USD 17,309.36 million. The growth of the market depends on several factors, including the emergence of supply chain visibility and event management, increasing investment in warehouses by e-commerce service providers, and a rise in the number of strategic partnerships.
This supply chain management software market report extensively covers market segmentation by application (SCP, procurement, WMS, and TMS), deployment (on-premise and cloud-based), and geography (North America, Europe, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increasing investment in warehouses by e-commerce service providers is notably driving the market growth, although the high initial cost and availability of open-source software may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Increasing investment in warehouses by e-commerce service providers is notably driving the supply chain management software market growth. E-commerce service providers have set up warehouses to manage inventory and shipping. The introduction of supply chain management(SCM) software, such as WMS software, helps end users save time and improve the process of checking inventory and new shipments on a daily and monthly basis. E-commerce service providers need inventory management software to improve the accuracy of incoming and outgoing inventory calculations.
Increased warehouse construction by e-commerce service providers will drive WMS adoption. Some examples related to investing in storage facilities include Walmart investing USD 1.2 billion in its Chinese supply chain to modernize its logistics. Growth in the global e-commerce market will increase investment in warehouses and drive the growth of the Supply Chain Management (SCM) Software Market during the forecast period.
The adoption of big data analytics and IoT is a key trend influencing the supply chain management software market growth. IoT and big data help end-user industries such as healthcare, retail, manufacturing, financial services, banking and insurance, education, transportation, SCM, logistics, and agriculture to analyze and improve operational efficiency. IoT devices and connected sensors are increasingly being implemented in the supply chain and logistics industries to enable operational efficiency and real-time tracking. Big data analytics can manage the large amount of information generated by IoT devices in the SCM system. Massive amounts of data collected by sensors can be analyzed in real-time to make informed decisions and derive solutions that help in improving operations. IoT, in conjunction with big data analytics, can help companies improve operational efficiency.
Several logistics service providers have implemented big data and IoT in their SCM systems. Integrating digital twins and supply chain solutions minimizes human interaction with systems through machine-to-machine communication, enabling efficient monitoring and management of warehouse operations. Increasing integration of IoT and big data will have a positive impact on the growth of the market during the forecast period.
The high initial cost and availability of open-source software are challenging the supply chain management software market growth. The rising costs of SCM software solutions can be attributed to software licensing, installation, maintenance, hardware, customization, and training costs. Controlling and monitoring ongoing transportation and logistics activities outweighs the high cost of installing data collection devices in transportation vehicles and IT infrastructure. Because of this, problems are faced by various stakeholders. For example, implementing SCM software requires IT staff to be trained with skills related to administration and staff dedicated to operations. Once implemented, the SCM solution needs to be updated regularly to keep up with current market trends and integrate with advanced technologies such as big data and blockchain. These factors increase the cost of implementing and maintaining SCM solutions. The availability of open-source software solutions such as Odoo, OpenBoxes, xTuple, OpenLMIS, and Sellsy pose challenges to the various vendors operating in the global SCM software market.
The majority of end users use SCM software solution which is open source as it does not require a large investment. However, such solutions have only basic functions and cannot cope with complex tasks, so they are suitable for small and medium-sized enterprises that do not have a heavy task load. Such factors will limit the growth of the market during the forecast period.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Supply Chain Management Software Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
American Software Inc: The company provides demand-driven supply chain management and enterprise software solutions built on over 40 years of industry experience to drive business value regardless of market conditions. It also develops, markets, and supports a portfolio of software that provide enterprise management and collaborative supply chain solutions to the global market.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the SCP segment will be significant during the forecast period. SCP includes processes such as sales and operations planning, demand planning, demand gathering, strategic supply network design, and long-term and strategic planning. SCP is an integrated business management process and the software helps senior management and leadership teams keep all functions in the organization in sync. SCP software manages and provides data on sales plans, production plans, inventory plans, and financial plans.
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The SCP segment was valued at USD 5,907.93 million in 2017 and continued to grow until 2021. Companies around the world are implementing SCP software solutions to balance supply and demand by effectively managing inventory using sales data and demand forecasts. SCP software solutions provide insight to supply chain managers by analyzing trends in sales and operational plans. Vendors in the market offer SCP software solutions to effectively manage sales and demand forecasts. To achieve operational efficiencies, manage sales data, and effectively forecast demand for products and services, the end-user implements SCP software into the operational processes of its supply chain.
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North America is estimated to contribute 34% to the growth of the global supply chain management software market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
North America offers the greatest growth opportunity for SCM providers due to the increasing implementation of automation technologies in logistics and supply chains. The availability of advanced network communication infrastructure and a well-developed ecosystem of connected devices facilitates the implementation of automation technologies in this region. Some end-users in the logistics and supply chain industry in the region have already adopted advanced technologies such as IoT, machine learning, predictive analytics, and artificial intelligence that enable the effective implementation of intelligent solutions. The region has seen large vehicle movements across a variety of industries, including retail, oil and gas, and construction. In addition, growth in cross-border trade between the United States and Canada and between the United States and Mexico has also increased fleet movements. For this reason, fleet managers and owners can focus on implementing a fleet management system to optimize their operational cycles. As fleet management system adoption grows, buyers will integrate their IoT devices, wireless connectivity solutions, and SCM software to efficiently manage operations.
In 2020, COVID-19 adversely affected the economies of various countries in the region. Sales declined due to the implementation of lockdowns and the closure of local operations by companies. Supply chains were disrupted, and manufacturers from across the world also faced raw material shortages. This situation created a need for SCM software as it can make it easier for companies to manage their supply chains. Hence, the demand for SCM software increased in 2020. In 2021, measures to reduce the risk of outbreaks and vaccination campaigns have reduced the impact and curbed the spread of COVID-19. The pandemic accelerated technology adoption, and supply chain software vendors capitalized on this trend, including developing new solutions leveraging emerging technologies such as blockchain, artificial intelligence, and IoT. The pandemic also highlighted the importance of collaboration and partnerships. Supply chain software companies worked with partners to develop solutions to meet the challenges of the pandemic and help restore global supply chains. Therefore, the market is expected to grow during the forecast period.
The supply chain management software market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the global supply chain management software market as part of the global application software market within the global IT software market. The parent global application software market includes companies involved in the development and manufacture of application and system software. This includes companies that provide database management software. The global application software market includes companies involved in developing and manufacturing software designed for specialized applications for the business or consumer markets. This includes enterprise and technical software as well as cloud-based software. It excludes companies classified in the interactive home entertainment sub-industry and companies that manufacture system or database management software classified in the systems software sub-industry.
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Supply Chain Management Software Market Scope |
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Report Coverage |
Details |
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Page number |
176 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 12.98% |
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Market growth 2023-2027 |
USD 17309.36 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
10.61 |
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Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
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Performing market contribution |
North America at 34% |
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Key countries |
US, China, Japan, Germany, and UK |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
3M Co., American Software Inc., Coupa Software Inc., Cybozu Inc., Descartes Systems Group Inc., E2open Parent Holdings Inc., Epicor Software Corp., Infor Inc., International Business Machines Corp., Kinaxis Inc., Magaya Corp., Manhattan Associates Inc., Microsoft Corp., Oracle Corp., Panasonic Holdings Corp., SAP SE, Sonata Software Ltd., Solvoyo, StockIQ Technologies Inc., and Webgility Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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