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Supply Chain Tech
Overview
Globalization has transformed organizations' supply chains from localized operations into multifaceted, interconnected global networks. While this has opened up new avenues of growth for companies, the increased complexity resulting from fluctuations in demand and supply, high levels of interdependence, and strict regulatory and compliance requirements have exposed their supply chains to greater vulnerabilities. The Covid-19 pandemic further exposed the limitations of traditional supply chains, exacerbated by geopolitical turmoil, underscoring the need for digitally enabled solutions.
Supply chain technology includes digital tools, software, and systems that leverage technologies such as RFID, IoT, and AI/ML to improve supply chain visibility, traceability, risk management, planning, and collaboration among supply chain partners. It plays a key role in optimizing the diverse processes involved in the production, distribution, and delivery of goods and services. These technologies are used in a wide range of industries serving stakeholders such as suppliers, manufacturers, logistics companies, and retailers and help organizations minimize lead times, reduce costs, and enhance the efficiency and quality of the end product.
Industry Updates
Market Sizing
The US Supply Chain Tech market could reach USD 28.2 billion–47.8 billion by 2028
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Use cases
Supply chain technologies contribute to increased efficiency, reduced costs, and improved overall performance, with use cases evident across multiple industries such as consumer staples, household products, automobiles, healthcare, pharmaceuticals, and transportation.
Companies are increasingly adopting supply chain technologies for demand forecasting using AI for automation, disruption modeling, and inventory replenishment. Third-party risk assessments are another common use case, aiding in supplier vetting across various industries. Another emerging use case is quality compliance, as product tracking solutions help food companies monitor and maintain required quality standards.
We have identified key supply chain technology use cases below:
Market Mapping
The supply chain tech space comprises players that help enterprises enhance visibility and improve control over their supply chains with services that enable real-time product tracking, collaboration between stakeholders of the supply chain, traceability and verification, third-party risk management, and supply chain planning.
The real-time tracking and monitoring segment accounted for the most funding as of December 2023, with over USD 4 billion raised—over half of the industry’s funding. The supply integration and collaboration segment was a close second, with USD 3.5 billion raised as of the same date.
Big Techs such as Alphabet and Amazon and ERP vendors like SAP and Oracle are among the active incumbents in this space, with the latter offering solutions that cater to a wide range of supply chain management needs.
Real-time product tracking and monitoring
Supplier integration and collaboration
Traceability and verification
Third-party risk management
Supply chain planning
The Disruptors
Disruptors in the supply chain tech space are predominantly at an early or growth stage, with over 80% of them being established after 2010. Most players offer standalone products that focus on managing a specific aspect of a supply chain operation and have managed to gain significant traction in the market.
Supply chain tech startups are also generally well-funded, with real-time product tracking and monitoring startup Flexport having raised over USD 2.4 billion as of December 2023. The company also had a valuation in excess of USD 8 billion as of its most recent funding round, also topping the list of unicorns in this space, which included companies such as Relex, Project 44, and BitSight.
Funding History
Competitive Analysis
Incumbents
Global tech giants such as SAP, Oracle, Alphabet, and IBM are among the active incumbents in the supply chain tech space, with the most common growth strategy being in-house developments that complement their existing software and cloud service offerings. Many of these incumbents offer a wide range of solutions, which, when combined, can deliver a holistic solution for managing supply chain operations.
Acquisitions and partnerships for product collaborations with startups are also actively evident in this space as a means to fast-track the addition of advanced features to their overall suite of supply chain solutions.
Panasonic’s acquisition of Blue Yonder in September 2017 for ~USD 6.5 billion remains the largest acquisition to date, with SAP’s acquisition of Ariba in May 2012 for USD 4.3 billion being the only other multi-billion-dollar deal in this space.
Notable Investors
