Making Sense of the $13B SCM Software Space

Gartner’s recent report that the supply chain management (SCM) software market will be worth more than $13 billion in the U.S. by the end of 2017 has likely turned many heads – both within the manufacturing and supply chain spaces, as well as with external audiences. In reality, this news that expenditures in this space are hitting record highs has been a long-time coming.

Here are a few reasons investment in modern supply chain technology is more prevalent than ever.

The Cloud and the Modern Supply Chain Workflow

Having keen oversight of supply chain operations – from the production line all the way through after-sales service – has always been synonymous with success in the manufacturing space. And as manufacturing has shifted from manual processes to cloud-based platforms – welcoming in a new age of efficiency – managing the workflow and performance of supply chain systems has only become easier and more sophisticated. Through the cloud, workers, regardless of location, can get updates on everything from distribution to production throughout any part of their supply chain network, allowing them to quickly make any necessary decisions and tweaks. This enhanced, more fluid workflow from cloud computing – which is set to be worth almost $250 billion worldwide by the end of the year – has been pivotal in underpinning the growth of SCM software.

New Inventory and Pricing Demands

Inventory management throughout the supply chain has become much more complex as companies are evolving how they make, market, sell, and service their products. As more customers have an ‘on-demand’ mindset thanks to brands like Amazon and Zappos, they expect sales to be as easy as a click of a button, with almost immediate delivery.

As a result, manufacturers are tasked with delivering the same, or better, service. Modern supply chain technology allows them to do just this, particularly for post-sales service. This technology ensures service parts are available when and where they are needed, ultimately maximizing product uptime and providing an awesome customer experience.

After-Sales Service Demands

With orders for new durable goods fluctuating, more companies – such as Boeing – are turning to after-sales service as a way to expand often sub-optimized revenue streams. More and more manufacturers will enhance and optimize their after-sales service organizations as they look to increase both top and bottom line performance. This segment of business delivers very attractive financial value – think up to 25 percent of revenue and 50 percent of gross profit margin – and these can be improved even further with investment in modern technologies.

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