Supply Chain Planning

This Supply Chain Planning (SCP) market research study delivers current market analysis plus a five year market and technology forecast. The study is available in multiple editions including worldwide,all regions, and most major countries.

The Supply Chain Planning Market Continues to Grow by Double Digits 

New ARC Advisory Group research reveals that more and more companies are embracing the idea that digitally transforming their enterprise is key to competitiveness in the market. When it comes to digitally transforming the end-to-end supply chain, few solutions would be more important than Supply Chain Planning (SCP). Companies want to be customer-centric while reducing their costs. The key solutions in supply chain planning are demand forecasting/inventory optimization, supply planning, and network design. The supply chain planning software market grew at a double-digit rate over the last several years, even during the pandemic. It is unusual for a mature, multibillion dollar market to grow so fast. 

Supply Chain Planning Strategic Issues

In addition to providing a five-year market forecast, the Supply Chain Planning market research provides detailed quantitative current market data and addresses key strategic issues.

Beware the Digital Twin Hype

A digital twin is a virtual representation that serves as the real-time digital counterpart of a physical object or process. The term “virtual representation” in supply chain planning means a model. But no supply chain vendor can provide THE digital twin that represents a supply chain. We should not be speaking of a digital twin, singular, but digital twins, plural. Different types of models are good for solving different kinds of problems. The demand model is different than the supply model. In terms of supply modeling, many companies will find they need one model for supply chain design, another for tactical planning, and another for operational planning. Models are getting broader, and this is to be applauded. Where a supply network model used to consist of a model of multiple factories and warehouses, today we are seeing models that include a much broader set of constraints: purchase agreements, store replenishment, transportation, ESG, and others as well. These broader models are better models.

Don’t Customize that Software

Over the years, ARC has come across many companies that purchased supply chain software and then customized it so that it would better fit their processes and culture. The implementations take longer when customization is involved. Further, as the software was customized, the customers are reluctant to upgrade the software because of the large costs associated with upgrading software that has been customized. This reluctance to upgrade customized software can continue for several years and the buyers forego product enhancements. After some number of years, while falling further and further behind the current version of the software, the companies realize they have legacy software. If they want to use a modern solution, the costs will be so high that they may as well go through a new vendor selection process and a brand-new implementation.

There is a marked trend toward purchasing cloud-based solutions. This is not just because cloud solutions are sold in a Software-as-a-Service model that lowers upfront costs but also because public cloud solutions typically do not allow for customization and thus protect the upgrade path. In short, avoiding customization improves the total cost of ownership based on faster implementations, easier upgrades, and improved maintenance. However, there are still some companies that can plausibly argue that off-the-shelf software does not suit their needs. In supply chain planning, that often means they believe that the addition of a particular algorithm, or algorithms, will improve the optimization to such an extent that the extra costs don’t matter. A few providers of SCP have public cloud solutions that allow custom algorithms to be put in a library attached to the platform; this is done in such a way that the upgrade path is still protected. That is the best of both worlds.