Published: March 2017
Report Code: IM10833
Category : Software & Services
Cloud supply chain management (SCM) provides business organizations a comprehensive view of their operations, enhancing supply-chain visibility and ensuring effective collaboration. Cloud SCM creates a transformational impact on business enterprises and their supply chain operating model by enabling data & analytics, mobility and social media functions. The use of cloud in the supply chain helps the business organizations in redefining traditional supply chain networks, industrial grade digital technologies and the arrival of end-to end visibility.
The logistic management among business organizations is growing and organizations are continuously optimizing and evolving their processes in order to remain competitive. Business organizations require a flexible system that is swift in deployment compared to traditional linear on-premise enterprise resource planning (ERP) implementations. Cloud-based services provide business enterprises with the organizational flexibility to re-configure certain capabilities based on their evolving needs. With the increasing adoption of cloud, business enterprises would probably never require an additional infrastructure to manage temporary peaks and changes in the organization. The cloud SCM facilitates a faster return on investment (ROI) for business organizations and allows for any upgrades to be implemented in a timely and effective manner, with limited manpower.
Business enterprises have multiple systems for shipping logistics, which causes huge delays while doing business. Multiple systems require more manpower to run each system. With the use of cloud, business organizations can consolidate and coordinate information with a specific solution to prevent miscommunication and excessive expenditure. The SaaS architectures provides businesses with global visibility across entire operations in a single system by minimizing the overall cost of the company.
GLOBAL CLOUD SUPPLY CHAIN MANAGEMENT MARKET BY SOLUTION $M (2013–2023)
The global cloud SCM market is expected to witness a CAGR of 19.2%, during the forecast period, to reach $11,047.2 million by 2023. With a complex infrastructure and escalating maintenance costs for traditional supply chain management (SCM) applications, many organizations are looking forward to cloud for developing efficient supply chain processes. According to a recent survey, in 2015, approximately 70% of manufacturing companies used cloud applications in their supply chains. Cloud solutions deliver greater flexibility and scalability, expanding the horizon of technical capabilities, while dramatically simplifying the IT environment. Cloud computing is considered one of the most disruptive and important technologies in the present scenario, which is continuously evolving. Cloud-based applications and computing power are widely established and proven. In terms of total cost of ownership, cloud offers significant advantages over on-premises software systems.
IoT, cloud, digital supply chain and machine learning are considered as the evolving technologies for business enterprises and the increasing adoption of these technologies is the key trend in the global cloud supply chain management market. These technologies provide different benefits such as cloud offers cost advantages, IoT benefits in terms of precision in operations and digital supply chain offers agility. Some of the market players such as Verizon, Microsoft, Tesla and Google are increasingly connecting these four technologies to promptly serve customers with personalized content or software capabilities on devices they already have.
The key trends observed in the global cloud SCM market are the demand-driven and dynamically synchronized supply chains. Demand is the most crucial component for determining the use of working capital, operational capacity and resources, and thus, drives the supply chain planning. A key element of top performing organizations is customer segmentation and delivery of value proposition for those segments. The organizations are also required to manage the demand of the customers in a way that it best serves their organizational goals. The business planners can use supply chain management software to set forecasting and fulfillment strategies by the method of product grouping. The cloud SCM enables the planners to forecast demand, simulate buying patterns and perform various analysis to align the supply chain efficiently, according to the market conditions and organization’s goals.
The supply chain strategies for various business organizations are developed with the help of software simulation, analysis and planning. The cloud SCM helps to monitor changes in a product's demand type and dynamically allows for changes in SCM strategies, with minimal interruptions. The commonly used supply chain management strategies include responsive supply chain strategy, agile supply chain strategy, lean supply chain strategy and replenishment supply chain strategy.
As the world’s transportation networks and supply chains become increasingly intertwisted and complex, the systems that support them are advancing and improving at a rapid pace. Increasing adoption of cloud-based supply chain management in transportation management is one of the major factors driving the growth of the cloud SCM market, globally. Software vendors have been integrating more transportation optimization capabilities into their solutions, making it easier for shippers to streamline their supply chains, while also making them more cost- and time-efficient.
According to a recent survey, an increasing number of enterprise resource planning (ERP) vendors have entered into the transportation management system. Led by companies such as Oracle, this trend has opened doors of opportunity for an increased number of shippers to use transportation management system (TMS) as a part of their overall enterprise solution, rather than purchasing software applications, separately from different vendors.
The global cloud SCM market reported a consolidated structure in 2016, where the top three competitors accounted for the major share of the market. Some of the key players in the global market include SAP SE, Infor Inc., Oracle Corporation, The Descartes Systems Group Inc., JDA Software Group Inc., Manhattan Associates Inc., Logility Inc., Kinaxis Inc., Highjump Inc., Kewill Inc., Tecsys Inc. and Cloudlogix Inc.
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