Digital Supply Chain Market - Forecast(2024 - 2030)

Digital Supply Chain Market Overview

The Digital Supply Chain Market is estimated at $4.1 billion in 2021 and is expected to reach $13.5 billion by 2027 growing at a CAGR of 12.8% during the forecast period 2022-2027. The increasing use of analytics to derive critical insights from vast volumes of data and the rapid integration of advanced technologies such as Artificial Intelligence, the Internet of Things, and cloud-based supply chain management systems are going to drive the expansion of this market. The exponential increase in the number of supply chain disruptions due to the pandemic-induced lockdowns, rising demands for transparency regarding the supply chain movements, and digitization of various processes such as procurement, warehouse management systems and others are some of the key developments that are driving the growth of this market. The rising incidences of cargo congestion at major ports, terminals and other logistical nodes have resulted in the widespread adoption of radio frequency identification tags and autonomous vehicles to ease the congestion and ensure the smooth flow of the supply chain. Remote work, improving warehouse efficiency, reduced delivery time, and improved inventory visibility has resulted in the widespread adoption of augmented reality and other related technologies which are revolutionizing and disrupting the supply chain industry in unprecedented ways. 

The report: “Digital Supply Chain Market – Forecast (2023-2028)” by IndustryARC, covers an in-depth analysis of the following segments in the Digital Supply Chain Market. 

Key Takeaways

• Small and Medium Enterprises will be the fastest-growing segment by Organization in this market with a CAGR of about 13.1% due to increasing supply chain shocks, rising demand for transparency in the processes of the supply chain, and rapid automation.

• Manufacturing is the fastest-growing segment by Industry in this market with a CAGR of 13.6% due to the adoption of advanced technologies such as Cloud Computing, AI, and IoT, rising demand for in-time deliveries, and reduced costs.

• APAC region holds the largest market share at 30% due to rapid industrialization, exponential increase in cargo traffic, and increased governmental and private investments in this sector.

Digital Supply Chain Market Segment Analysis - by End-user

The Digital Supply Chain Market can be classified into multiple segments according to End-Users such as Retail, Healthcare, Manufacturing, Logistics, Automotive, Electronics, Defence and Others. Among them, Small and Medium Enterprises are projected to have the fastest growth at a CAGR of 13.6% in the forecast period of 2022-2027. The advent of the pandemic brought with it a plethora of challenges such as weak demand, liquidity crunch, and single source supply which has led to significant loss of sales during the pandemic period. The uncertainty regarding future business environments has resulted in firms adopting an “asset-light” strategy which would not only enhance their agility to respond to sudden shocks but also optimize their operational capability and reduce their financial costs. The adoption of advanced technologies such as GPS, RFI, and AI has been widely deployed to track the shipment, get information regarding the status of the shipment, and knowhow of vehicle and driving conditions. Apart from this, the deployment of stockpots has drastically reduced the vagaries of inventory management due to manual interventions since it uses RFID systems and autonomous machines to get information regarding the stock which are later utilized by businesses to break down their stock. Such advantages will rapidly drive the growth of this market.

Digital Supply Chain Market Segment Analysis - by Organization

The Digital Supply Chain Market is segmented into two categories: Large Organizations and Small and Medium Enterprises. Between them, the Small and Medium Enterprises segment will exhibit the fastest growth at a CAGR of 13.1% in the forecast period 2022-2027. The advent of the pandemic led to many MSMEs across the world facing a basket of challenges ranging from broken supply chains, delayed and fragmented payments and loss of customers. According to a survey by LocalCircle, a community social media platform, 28 percent of MSMEs and startups witnessed a growth between 100-500 percent in their sales through online channels in the last 12 months. The lockdowns imposed by various governments have radically impacted customer behavior and digitizing the optimal points of the supply chain will help business owners assess sales trends, understand customer spending patterns and customize their supply chains according to the specific conditions under which they are operating. Digitizing the supply chain partially or entirely will help improve operational efficiency, reduce costs and remove human bias in decision-making. Such developments will accelerate the rapid expansion of this market.

Digital Supply Chain Market Segment Analysis - by Geography

The Digital Supply Chain Market in the APAC region will account for the highest share at 30% in 2021. The exponential growth in cargo at the major logistical nodes, government legislations and supply chain shocks arising from the pandemic-induced lockdowns are some of the major factors that are driving the growth of this market. Rising demands for transparency regarding the status of the shipment increased operational efficiency, and the enhanced agility of the supply chain itself are the main reasons that are resulting in the widespread adoption of these systems. Apart from this, reduced costs for the retailer's enhanced resilience and integration of advanced technologies such as IoT, RFI tags, GPS and others will drive the growth of the market in this region. In June 2022, the Government of India announced that it will develop the ONDC (Open Network for Digital Commerce) which will allow all commercial entities to operate and design online stores, reach customers, enable lightning-fast payments and provide a level playing ground for all in the digital space. Such developments will attract a large number of players which will propel the expansion of the market in the forecast period.

Digital Supply Chain Market Drivers

Unprecedented supply-chain shocks due to COVID, changing customer pattern and increased agility to respond to unforeseen events is driving the growth of the Digital Supply Chain Market:

The advent of the COVID-19 pandemic has exposed the vulnerabilities of hyper-efficient supply chains resulting in delays in shipments and leading to shortages of essential items for consumers and industry alike. Changing consumer behavior, increasing demand for transparency regarding the supply of shipments, easy financing options and optimization of existing resources are some of the key factors that are driving the growth of the Digital Supply Chain Market. The delay in unloading and dispersal of cargo from the ports, lack of labor, opacity regarding the status of the shipment delivery, and rising health hazards have resulted in firms across industries going for digitization of partial or entire supply chains. In June 2022, Scotland’s Rural College and the University of the West of Scotland along with partners across Southwest Scotland and Cumbria currently working on a project to develop a zero-carbon, fully integrated and traceable digital dairy chain. Such developments will positively impact the growth of the market in the coming years.

Rapid Adoption of Digital Supply Chain due to the incorporation of advanced technologies such as IoT, RFI, and GPS will lead to cross-industry adoption that will rapidly expand the market:

The rapid technological advancements in the fields of Artificial Intelligence, the Internet of Things, and automation have revolutionized global supply chains. The deployment of robotics in warehouses, increased adoption of IoT-enabled devices and demand forecasting have resulted in the resolution of some very long-standing problems by reducing human intervention, enhanced connectivity, and in-time production which has drastically increased operational efficiency, and reduced costs. The rapid deployment of RFID tags in both the supply chain processes as well as the manufacturing plants has resulted in increased resilience since it was verified at every step of the process from the manufacturer to the consumer. Apart from this, the reduced costs of IoT chips has enabled companies to use them to track their shipments via encrypted communication channels. Such advances will rapidly accelerate the growth of the market.

Digital Supply Chain Market Challenges

Lack of understanding among businesses, lack of skills among employees to salvage the technological tools and increasing inequality:

The rapidly changing business environment and lack of know-how among business owners and employees alike are the main impediments that are holding back the market. The lack of technical skills among the non-technical employees, lack of data regarding the chokepoints, and changing operating conditions greatly diminish the ability of firms to adapt their supply chains. Apart from this, the advent of the pandemic has resulted in many small businesses losing customers which will greatly hamper their abilities to indulge in capital-intensive expenditures. This digital divide will further exacerbate inequality which will stagnate their abilities to adapt to change. Such developments will negatively impact the growth of the market.

Digital Supply Chain Industry Outlook 

Product launches, collaborations, and R&D activities are key strategies adopted by players in the Digital Supply Chain Market. The top 10 companies in the Digital Supply Chain Market are:

1. Cloudera
2. IBM
3. Infor
4. Microstrategy Incorporated
5. Oracle Corporation
6. SAP SE
7. Software AG
8. Epicor
9. TIBCO Software Inc.
10. SAS Institute Inc.

Recent Developments. 

• In June 2022, Epicor and Microstrategy Incorporated announced an agreement to deploy the new Epicor Predictive Maintenance Assistant (PMA) solution via MicroStrategy’s Hyperintelligence technology. The agreement enables both players to attain zero-click insights within users’ existing business tools, offering convenient, pervasive access to data at virtually any point of decision.
• In June 2022, Infor announced its partnership with Everstream Analytics. Through the partnership, Infor will integrate Everstream's end-to-end supply chain risk assessment and monitoring data with its Infor Nexus multi-enterprise business network platform which will enable organizations to better anticipate and navigate supply chain risks and disruptions. 
• In November 2021, Infor acquired Lighthouse Systems thereby adding manufacturing execution systems to its ERP arsenal which will enable manufacturers to connect, run and monitor manufacturing machinery. 

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