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Supply Chain Tech
Overview
Globalization has turned supply chains into complex, interconnected global networks, making them vulnerable to disruptions from fluctuating demand, interdependence, and regulatory pressures. Global disruptions like the Covid-19 pandemic and geopolitical conflicts have highlighted the limitations of traditional systems, emphasizing the need for more advanced and reliable solutions. Additionally, the increasing consumer demand for ethical sourcing and transparency drives the need to foster transparency across supply networks. In this context, supply chain tech emerges as a timely offering, providing innovative capabilities to enhance transparency and resilience across supply chains.
Supply chain tech, including RFID, IoT, and AI/ML, enhances visibility, traceability, and risk management while improving efficiency across supply networks. These tools optimize processes for suppliers, manufacturers, and logistics partners, reducing lead times and costs while safeguarding product quality.
While companies seek to invest in supply chain technologies, they also face significant challenges in adopting them. Cybersecurity threats that may result in security breaches pose severe threats to data privacy, exposing companies to business risks and reputational damage. Given that these technologies leverage AI, data limitation could also lead to potential disruptions within supply chain operations.
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 a Go-to-Market or Expansion 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
