Supply chain risk management market is estimated to witness significant growth, owing to growing complexities in supply chain operations and increasing need for visibility across supply networks
Supply chain risk management market is estimated to be valued at US$ 3.15 Bn in 2024, exhibiting a CAGR of 10.2% over the forecast period 2024-2031. Growing complexities in supply chain operations due to factors such as global sourcing of materials, geopolitical uncertainties, fluctuating commodity and fuel prices have increased the risks across supply chains. There has been growing need for companies to have visibility across multi-tier supplier networks and identify potential disruptions in real-time to ensure business continuity.
Market Dynamics:
Global supply chain risk management market growth is driven by increasing complexities in supply chain operations and rising need for end-to-end visibility across supply networks. Widespread global sourcing of raw materials and components has exposed supply chains to macroeconomic and political uncertainties in different countries. Supply chain managers are investing in risk management tools to proactively address potential disruptions. Fluctuating commodity and fuel prices pose pricing pressures. Technology solutions are helping organizations simulate various supply chain scenarios and become more resilient to external risks and disruptions. Advanced analytics is being leveraged to identify risks early on and take corrective actions, thus, minimizing their impact on business operations.
Growing Adoption of Emerging Technologies to Enhance Supply Chain Visibility
Increasing adoption of emerging technologies like internet of things (IoT), artificial intelligence (AI) and big data analytics by companies across industries can drive the global supply chain risk management market growth. These technologies provide real-time monitoring of products and assets throughout the supply chain, which helps in identifying and mitigating risks more effectively. IoT enabled sensors installed in products, vehicles and equipment collect data on location, temperature, humidity and other parameters, which helps track the items and detect any issues. AI and analytics applied on this big data helps predict problems, calculate risks and enable prompt corrective actions. This enhanced visibility and predictive capabilities provided by technologies encourages more organizations to invest in supply chain risk management solutions to minimize disruptions.
Growing Focus on Building Resilient and Agile Supply Chains
The COVID-19 pandemic had severely impacted global supply chains and highlighted the need for companies to build resilience. It exposed vulnerabilities in overreliance on single markets or suppliers. This has increased the focus of businesses on diversifying supplier networks, nearshoring production and creating agile supply chains that can quickly respond and adapt to disruptions. Supply chain risk management solutions help identify weaknesses, assess risks from multiple sources and simulate 'what-if' scenarios to build contingency plans. These also enable tracking alternative suppliers and routes in real-time. There has been rising focus on resilience as it prompts more companies to evaluate and invest in such software platforms to future-proof their supply chains from unexpected shocks.
Lack of Desired Skills and Expertise
While supply chain risk management solutions offer a lot of benefits, limited expertise in this specialized domain hamper its broader adoption. Effectively implementing risk management involves understanding complex global supply chain operations, identifying all potential risk factors, mapping interdependencies, assessing impacts and devising mitigation tactics. Many companies does not have dedicated professionals with the right mix of supply chain and risk assessment skills. This results in under-utilization of software or incorrectly identifying risks. The lack of desired talent availability is a major challenge, especially for smaller businesses. It discourages investments as organizations fear not being able to leverage solutions optimally due to skill gaps.
Cybersecurity Concerns and Data Privacy Issues Constraint Market Growth
Supply chain risk management platforms collect, aggregate and analyze voluminous real-time data from across supply chain networks. While this data sharing enhances visibility, it also increases cybersecurity vulnerabilities and risks of privacy breaches. Hackers targeting supply chain systems or supplier networks can severely disrupt operations. Strict data privacy regulations further complicate cross-border data transfers. Ensuring end-to-end security and compliance across extended supply chains involves significant effort and costs. Increasing threat of cyberattacks and challenges of maintaining privacy erode trust in these solutions. Many companies, especially in regulated industries, are hesitant to adopt new platforms due to these information security challenges and instead prefer legacy system upgrades.
Opportunity to Expand Offerings with Integrated Analytics and Automation
While current risk management solutions offer assessment and tracking capabilities, there is a growing demand for more advanced predictive and prescriptive analytics functionalities. Customers want solutions that can proactively detect anomalies, accurately forecast future risks and immediately provide recommended automated actions for remediation. Vendors have the opportunity to enhance their platforms by integrating more advanced AI/ML techniques, real-time big data processing, simulation modeling and embedded controls for automated responses based on defined rules. This could transform solutions from reactive monitoring to proactive management, further automating decision making. By adding predictive and prescriptive analytics coupled with automation, vendors can gain an edge over competitors and accelerate supply chain risk management market expansion.
Growing Demand for Cloud-Based and Mobile Offerings
Although most solutions currently focus on desktop or on-premise deployment, companies prefer cloud-based SaaS models and mobile access for remote monitoring. The disruption caused by the pandemic highlighted the importance of supporting a distributed workforce. There is a growing need for supply chain visibility and risk tracking on-the-go through mobile and tablet apps. Cloud platforms also offer easier collaboration, multi-tenant sharing of best practices, flexible scalability and lower upfront infrastructure investments. Vendors have an opportunity to capitalize on these emerging trends by developing comprehensive cloud-native solutions accessible across devices.
Link: https://www.coherentmarketinsights.com/market-insight/supply-chain-risk-management-market-2589
Key Developments:
- In August 2022, Exiger, a leading SaaS supply chain risk management, third-party risk management and compliance company, announced the acquisition of Supply Dynamics, the industry's most sophisticated supply chain collaboration platform. The integration of Supply Dynamics' SDX, PAC, and ExplorerRX products with Exiger's Insight3PM, DDIQ, and Supply Chain Explorer will create an end-to-end supply chain visibility and holistic risk management solution via a single, secure, cloud-based enterprise platform. This acquisition positions Exiger at the forefront of the SaaS Supply Chain Management market, which is expected to grow to $19.8 billion by 2025. The combined solution enables customers to gain real-time visibility and control over their extended supply chains, reduce costs, mitigate risks, and enhance compliance across public and private sectors.
- In December 2021, LogicManager launched an updated version of its enterprise risk management (ERM) software, integrating advanced risk management technologies and incorporating artificial intelligence capabilities. The enhanced platform includes new features that support the development and maintenance of a comprehensive, end-to-end ERM program. LogicManager's ERM software serves as a centralized hub for identifying, assessing, mitigating, monitoring, and reporting on risks across the enterprise. The solution's risk-based approach, automated workflows, and interactive dashboards enable risk managers to focus on strategic priorities, streamline processes, and make data-driven decisions to protect their organization's reputation and improve overall performance.
Key Players:
Avetta, LLC, CURA Software Solutions, DHL International GmbH, Emerson, Exiger, IBM, JAGGAER, Kinaxis, Logicmanager, Inc., Marsh LLC, MetricStream, NXP Semiconductors, Oracle, SAP Ariba, Software AG
