Role of supply chain management for the global economy
Today we live in a highly interconnected world economy that organizes millions of businesses operating across different regions or countries. Given smooth economic coordination is a pre-condition for the successful functioning of the global economy, supply chain management offers the most needed service to ensure a strong network between a company and its suppliers to manufacture or produce, then to distribute goods to customers. As a commercial system of organizations, resources, information and people, the supply chain network forms a complex and dynamic supply and demand network between a multitude of economic agents. The expansion of international trade triggered the importance of supply chain management further. For instance, the global supply chain management market was worth roughly 16 billion U.S. dollars in 2019. Over the last decade, supply chain management software and procurement market expanded more than twice. These networks of supply chains form the so-called global value chains (GVCs), which is the prevailing method of interaction in international trade relations.
Every single node, like a firm or an organization, on a supply chain network, has the potential to shape and affect the entire system. Aggregation of firm dynamics to provide supply chain services exhibited across the world determine the direction, potential, and growth path of the global market for supply chain management. In 2019, SAP and Oracle were the main supply chain management software suppliers worldwide based on revenue. During that period, the German company, SAP generated from its software support segment over 11.5 billion euros in revenue. After a new innovation is introduced to the market, idea dissemination takes place at a rapid rate. More than one-third of surveyed supply chain professionals stated that their company already adopted cutting-edge inventory and network optimization tools to sustain competitive advantage in the marketplace. In addition to profit-maximization, the need to mitigate climate change catastrophe also urges supply chain firms to react. For example, roughly 28 percent of surveyed supply chain firms revealed that they currently implement circular economy design approaches in innovation strategy to reduce environmental footprint and optimize sustainability.
Despite the long-lasting coronavirus (COVID-19) pandemic, which hit global value chains immensely, supply chain management will remain and become a more integral part of a growing global economy in years to come. During the upcoming decade, the global supply chain management market is expected to more than double in size, reaching over 37 billion U.S. dollars economic worth by 2027. The supply chain management software market is expected to follow a similar tendency over the next couple of years. Although there is a possibility that the entire production mechanisms will change as a result of the fourth industrial revolution, it is still unsure to definitively tell how the supply chain management will be affected. As long as the overall industrial production and economic interaction across regions or countries will increase, so will follow the supply chain management market.
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In the following 5 chapters, you will quickly find the 27 most important statistics relating to "Global supply chain management".