The supply chain management (SCM) software market will be worth more than $13 billion in the U.S. by the end of 2017, according to a recent Gartner report. This has certainly caught the attention of manufacturing and supply chain professionals; but in retrospect, this news isn’t that surprising. The SCM market has steadily grown over the years and the demand for the technology is higher than ever.
Here are just a few reasons why modern supply chain technology is so important:
Managing Workflow within the Cloud
Keeping a handle on supply chain operations goes hand-in-hand with success in manufacturing. It’s vital for manufacturers to oversee and optimize all aspects of the supply chain, from production, all the way through after-sales services. While workflow management used to be done manually, technology has evolved and cloud-based platforms have taken over this responsibility. Now, workflow and performance management have become both easier to handle, and increasingly sophisticated and efficient. 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.
An Evolving Marketplace
The ways companies make, market, and sell is changing. What used to be brick and mortar is now becoming ever-more digital and products that used to be ‘cut-and-paste’ are becoming increasingly customizable. Because of this, inventory management throughout the supply chain has become much more complex. More and more customers have an ‘on-demand’ mindset and thanks to brands like Amazon and Zappos, and they expect sales to be as easy as a click of a button, with almost immediate delivery.
In response, manufacturers are tasked with delivering the same, or better, service, but at higher demand and at a much larger scale. 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
Companies are continuing to look towards after-sales services to help optimize their revenue streams as much as possible—especially as orders for new durable goods fluctuate. Look at Boeing, for example. They recently stated that they plan to double sales in their service business, putting them in direct competition with current suppliers. Just like Boeing, more and more manufacturers will lean on after-sales service to help spike top and bottom-line performance. The choice to invest in after sales services is a no-brainer, as it delivers highly attractive financial value (up to 25 percent of revenue and 50 percent of gross profit margin). What modern SCM software offers here is unmatched, as it can improve these profit margins exponentially.
Supply chain management technology is the ‘bread and butter’ of manufacturing success in today’s world. What the future holds and how the space evolves in the coming months, as the durable goods market and after-sales service specifically take shape, will be especially interesting to both witness and be a part of.
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