Supply Chain Management Software Market Size, Share & Trends Analysis Report By Component (Solution, Services), By Solution Type (Transportation Management System, Warehouse Management System, Sourcing & Procurement, Supply Chain Planning, Manufacturing Execution System), By Deployment Model (On-premise, On-demand/Cloud-based), By End-User (Small & Medium-sized Enterprises (SMEs), Large Enterprises), By Industry Vertical (Retail & Consumer Goods, Healthcare & Pharmaceuticals, Manufacturing, Food & Beverages, Transportation & Logistics, Automotive, Other) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global supply chain management software market size had a revenue holding of USD 19,979 million in 2021. It is expected to reach USD 52,661 million by 2030, growing at a CAGR of 11.37% during the forecast period (2022-2030).

Software for supply chain management (SCM) facilitates activities throughout the supply chain. The software is utilized in supply chain transactions and aids in the management of supplier relationships and corporate operations. Additionally, it offers reliable data and a complete picture of supply chain operations. It lets end users manage areas like warehousing, purchasing, marketing, sales, shipping, and others, enabling businesses to make effective business decisions by integrating the organization and supply chain into one system.

The rise in demand for better supply chain visibility, the development of industrial-grade digital technology, and the trend toward cloud-based supply chain management software are fueling the growth of the worldwide supply chain management market. Additionally, the need for demand management solutions among businesses and the use of SCM software in pharmaceutical and healthcare organizations contribute to the market's expansion. However, high implementation and maintenance costs for SCM solutions and increased security and privacy worries among businesses are anticipated to restrain market expansion.

Market Dynamics

Global Supply Chain Management Software Market Drivers

The Advancements of Industrial-Grade Digital Technologies

By efficiently integrating data gathered from connected devices and networking equipment for enhanced real-time material movement across the supply chain, organizations worldwide have concentrated on increasing efficiency and reducing maintenance of manufacturing and material handling solutions. Businesses across various industries are investing significantly in digitalizing their business models and supply chain management (SCM). Advanced planning procedures, such as analytical demand planning or integrated sales & operations planning (S&OP), which are now commonplace business practices in many organizations, are the focus of the supply chain management role. The supply chain role ensures integrated operations between customers and suppliers. The sector is forecasted to develop significantly during the projected period due to the surge in demand for real-time monitoring and supply-demand forecasting.

It is also projected that introducing trends like Industry 4.0 and Logistics 4.0 would offer lucrative opportunities for market expansion. Industry 4.0 is a current movement in industrial technology that emphasizes automation and data sharing. It combines conventional manufacturing and industrial procedures with cutting-edge technologies, including cloud computing, cognitive computing, cyber-physical systems, and the Internet of Things (IoT). Due to digital transformation, a much stronger granularization of orders has also increased customer service expectations. The use of SCM software results from factors such as supply chain competition being driven by online-enabled transparency, simple access to a wide range of options, and the growth of customization and personalization.

Global Supply Chain Management Software Market Restraints

High Cost of Implementation

SCM solutions require large expenditures from end users to be used effectively. Due to their limited budgets and inability to explain lengthy payback periods, small and medium-sized businesses and other sectors of the economy, including the healthcare sector (hospitals and pharmacies), find it difficult to purchase such systems.

Additionally, implementing these products might take several months, a massive worry because some firms are not comfortable running for such extended periods without their ongoing modest IT support. Additionally, the expense of these solutions' support, maintenance, and software updates prevent SCM software from being widely used because these expenditures often exceed the program's cost.

Global Supply Chain Management Software Market Opportunities

The Growing TMS Software

Freight movement is planned using a transportation management system, which assists clients in effectively planning and carrying out transportation-related tasks throughout the supply chain. The market is experiencing a wide range of opportunities due to the rising demand for TMS software. Intelligent wireless connectivity and smart sensor technology solutions are increasingly used to provide enterprises with real-time information about transportation vehicles.

Additionally, to boost operational efficiency by lowering human inputs and broadcasting signal information, TMS software manufacturers are working with RFID providers to create integrated solutions that support the TMS software market. The next generation of transport systems is projected to benefit from continuous investments in cutting-edge computing technologies, which could lead to expansion prospects for the TMS software market.

Regional Analysis

The region-wise segmentation of the global supply chain management software market includes North America, Europe, Asia-Pacific, and LAMEA.

North America and the Asia Pacific will lead the supply chain management software market. 

North America is forecasted to hold the predominant share in the regional market while expanding at a CAGR of 8.7%. North America is likely to maintain its leadership over the projected period due to increased spending on transportation and logistics, which is boosting the adoption of automation technology in logistics and supply chains. This region's large and intensely competitive transportation and logistics sector includes a wide range of different businesses, including the shipping, train, and air services sectors. Due to reasons including the digital revolution in the transportation industry, rising urbanization, and increased traffic congestion, there is anticipated to be an increase in the adoption of SCM solutions in transportation management.

Furthermore, the area is home to significant firms that provide cutting-edge supply chain management software. In North America, there is a strong presence of the major rivals in the supply chain management software industry, including Oracle Corporation, SAP SE, and JDA Software Group, Inc. Vendors in this market have created cutting-edge SCM software to meet the increasing demand for sophisticated supply chain management services across industry verticals, including transportation, automotive, and food & beverage. This is thought to offer lucrative opportunities for market expansion. Additionally, SCM software is being more widely used in the North American pharmaceutical and healthcare sectors, which is advantageous for the industry.

The Asia Pacific will likely hold the second-largest share of USD 16,773 million, expanding at a CAGR of 15.11%. Business businesses have been compelled to make significant investments in supply chain management software to sustain their growth and increase productivity due to the solid economic expansion and ongoing development in the services sector. Factors like the expansion of mobile usage, the rise in SMB cloud adoption, and the ongoing modernization of the industrial and construction industries all contribute to the high investment in SCM software in emerging markets. Rapid growth in the number of small and medium-sized organizations and increased spending on the latest technology to expand businesses are predicted to enhance the market growth.

Segmental Analysis

The global supply chain management software market is classified across components, solution types, deployment models, end-users, industry verticals, and regions.

Per the component, the categories include solutions and services.

The solution section will likely have the highest shareholding, expanding at a CAGR of 10.4%. The software tool or module known as a supply chain management system is used to carry out supply chain transactions, manage supplier and vendor relationships, and regulate the related business processes. SCM software is increasingly being used to control the movement of goods and various types of information across the supply chain network across several industrial verticals as it boosts an organization's supply chain operations.

The service section will have the second-largest shareholding. The market for supply chain management services consists of managed services, support & maintenance, and training & consulting. Organizations increasingly use consulting services to develop and maintain highly effective and robust supply chains tailored to their unique needs. This fosters the market's expansion through sustainable and profitable growth.

Per the solution type, the categories include transportation management, warehouse management, supply chain planning, procurement & sourcing, manufacturing execution system, and others.

The procurement & sourcing section will likely have the highest revenue holding, expanding at a CAGR of 8.13%. The increasing demand for better procurement functions and the expanding adoption of cutting-edge technology across various business verticals are anticipated to fuel market expansion. Global supply chains are updating SCM procedures to assure productivity and improve corporate operations due to the intense competition in the marketplace.

The supply chain planning section will hold the second-largest share. The process of coordinating resources to maximize the distribution of goods, services, and information from supplier to consumer while balancing supply and demand is known as supply chain planning. Many firms still rely on antiquated supply chain planning techniques, which hurts their financial performance and operational effectiveness. As a result, manufacturing firms are using cutting-edge SCP systems adaptable enough to handle the complexity brought on by changes in global conditions and ongoing digitization.

Per the deployment mode, the categories include on-premise and cloud.

The on-premise section will likely advance at a CAGR of 9.5% and hold the largest market share. The use of on-premise supply chain management software is widespread in highly regulated businesses where it is prohibited to store sensitive data in a public cloud environment. Companies that must adhere to these restrictions choose on-premise solutions because most cloud-based SCM systems operate in a public cloud environment. Due to SaaS's limited customization options, many firms still prefer on-premise supply chain management software.

The cloud section will hold the second-largest share. The cost of the goods is significantly reduced using cloud-based supply chain management software, which tracks the cargo at every stage of transit. The advantages of cloud computing over conventional on-premise SCM systems are growing due to changes in the supply chain environment.

Per the end-user, the categories include small & medium-sized enterprises and large enterprises.

The segment of large enterprises is predicted to have the highest revenue holding and advance at a CAGR of 10.8%. The demand for software in significant industry verticals to help collect essential business data from numerous and diverse sources, such as inventory levels, expected sales figures, supplier information, and others, is driving the market's expansion. To meet customer expectations, businesses must plan, develop time-to-market and inventory postponement strategies, and control replenishment. As a result, large companies increasingly use SCM software to run a lean supply chain.

The small & medium-sized enterprise section will hold the second-largest share. The category of SMEs is anticipated to grow at the fastest rate in the future due to the rise in SMEs in emerging economies like China, Japan, and India. More SCM solutions will likely be adopted to improve the operational efficiency of small and medium-sized businesses.

Per the industry vertical, the categories include retail & consumer goods, healthcare & pharmaceuticals, manufacturing, food & beverages, transportation & logistics, IT & telecommunication, automotive, and others.

The retail & consumer goods section will likely advance at a CAGR of 7.78% and have the largest revenue share. The industry is fueled by retail supply chain networks that have become increasingly complicated over time due to the abundance of suppliers, logistics providers, channels, products, and value-added services. Due to increased competition between e-commerce and omnichannel businesses, many merchants are deploying supply chain management software to obtain competitive advantages over other players.

The manufacturing section will have the second-largest share. Due to the significant move toward digitalization and the increased use of planning software, artificial intelligence, and machine learning, SCM adoption is currently high in manufacturing. The manufacturing segment is seeing a rise in the adoption of supply chain management software as businesses prioritize speed throughout their operations to satisfy client demands.

Impact of covid-19

The automotive industry is critical to the economy's growth. However, during the second and third quarters of 2020, the COVID-19 outbreak impacted the whole automotive supply chain, affecting new car sales in FY 2020.

South America is most affected by COVID-19, with Brazil leading the way, followed by Ecuador, Chile, Peru, and Argentina. South America's government (SAM) has taken a number of steps to protect its citizens and stem the spread of COVID-19. South America is expected to have fewer export revenues as commodity prices fall and export volumes fall, particularly to China, Europe, and the United States, which are all significant trading partners. The manufacturing industry, especially automotive manufacturing, has been damaged by containment measures in various South American countries. Due to the pandemic, major automotive manufacturers have also temporarily halted manufacturing in the region as a cost-cutting move. Furthermore, the automobile disc brake industry has been significantly affected in 2020 due to a lack of raw materials and supply chain disruption.

The Automotive Brake System control module of a vehicle is meant to alert the driver with a warning light if the system fails. The module itself is rarely defective; instead, the sensors or the wiring to the sensors are frequently defective. The most typical cause of dysfunction is when the Automotive Brake System is contaminated with particles or metal shavings. There is no signal continuity when sensor wiring is destroyed. Brake fluid becomes contaminated in corrosive situations, and the hydraulic unit fails to function.

Recent Developments

• In 2022, following its contract with the Defense Microelectronics Activity (DMEA), IBM Corporation announced the creation of a new 33-month work order to provide security services to enhance the Department of Defense's (DoD) microelectronics supply chain for mission-critical platforms.