Tag: supply chain management

Talent Shortages, Supply Chain Challenges Will Fuel 16-18% Growth of Supply Chain Management Outsourcing Market | Press Release

Third-party providers such as Accenture, Genpact and TCS are playing pivotal roles in reimagining supply chain operations.

 

DALLAS, June 28, 2022 — As supply chain issues hamper global economies, Everest Group predicts that the market for supply chain management (SCM) business process services (BPS) will expand at a 16-18% compound annual growth rate between 2021 and 2023, after achieving a sharp post-pandemic recovery in 2021 to reach US $2.4-2.6 billion.

“In the Everest Group 2022 Key Issues Survey, enterprises identified their top two business constraints going into 2022 as, No. 1, ‘cannot find enough talent to run the business’ and, No. 2, ‘logistics are bottlenecked,’” said Shirley Hung, partner at Everest Group. “Both of these corporate issues are contributing to rapid growth in the outsourcing market for SCM business process services.”

Although the overall market for SCM BPS is expected to grow rapidly through 2023, after-sales services will grow the fastest (16-20%) as compared with other subfunctions—namely, make/manufacture (8-12%) and deliver (10-12%)—because of its direct impact on customer satisfaction, brand-image, and the top-line revenue of the organization. After-sales services FTEs have already grown significantly (9-12% between 2019 and 2021), as buyers increased outsourcing of the management of field services, warranties, and claims. This trend is expected to continue as enterprises remain focused on improving customer experience through personalization and customized offerings.

The talent shortage will be another one of the key drivers for organizations looking to increase their SCM BPS outsourcing. According to enterprise buyers surveyed for the Everest Group 2022 Key Issues Study, 32% of buyers said they intended to move an average of 19% of their work outside of their organization to address talent shortage issues.

“We are certainly seeing shifts in buyers’ priorities as enterprises are more open today than ever before to outsourcing strategic, judgment-intensive supply chain processes such as supply/demand planning,” said Hung. “Also, enterprises are increasingly seeking third-party providers to support the adoption of digital technology solutions such as control towers and planning platforms to enable supply chain visibility and inventory planning. Service providers are playing a pivotal role in catering to this new demand by expanding their capabilities through in-house investments in technology and talent as well as through inorganic routes.”

The Everest Group SCM BPS PEAK Matrix® Assessment 2022 lists the top service providers in the market as Accenture, Genpact and TCS. These Leaders consistently stand out as the top providers across geographies and major industries.

These findings and more are detailed in Everest Group’s recently published report, “Supply Chain Management (SCM) BPS State of the Market Report 2022 – Increasing Role of Third-party Providers in Reimagining Supply Chain Operations.” This research provides comprehensive coverage of the SCM BPS market and analyzes it across dimensions such as adoption trends, buyer objectives, provider landscape, and the evolving market situation.

 

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About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our research also covers the technologies that power those processes and functions and the related talent trends and strategies. Our clients include leading global companies, service and technology providers, and investors. Clients use our services to guide their journeys to maximize operational and financial performance, transform experiences, and realize high-impact business outcomes. Details and in-depth content are available at www.everestgrp.com.

COVID-19 Highlights Life Sciences’ Need for an Adaptable Supply Chain | Blog

With cases topping one million globally, governments and health care agencies across the world are working to contain the spread of COVID-19 through several safety measures including the complete lockdown of high-risk countries. While this might prove effective in controlling the pandemic, enterprises across multiple industries are struggling to mitigate its growing impact on the supply chain.

Forced quarantine in manufacturing countries like China has significantly affected major industries including automotive, electronics, pharmaceuticals, and medical devices and supplies, highlighting the limitations in their existing supply chain models. The impact on the overarching life sciences industry is particularly acute, because it cuts across the entire ecosystem, and could potentially enable the spread of COVID-19 due to the diminishing supply of active pharmaceutical ingredients and medical supplies such as masks and hand sanitizers from the key supplier, China.

Despite acknowledging the risks of a single sourcing strategy, many organizations in the life sciences industry continue to work with a single supplier in low-cost regions like China and India to capitalize on their lower costs for labor and materials. This is risky in and of itself. And it also results in sub-contracting situations that lack transparency into the tier-2 and tier-3 suppliers, which further complicates risk management.

Here are our suggestions for how organizations in the life sciences industry can combat the global supply chain crisis:

  • Move beyond traditional and short-term remedial measures and devise a long-term proactive strategy with risk mitigation measures in place, at least for tier-1 and tier-2 suppliers. For tier-3 suppliers and beyond, at the minimum understand the potential risks involved
  • Establish a robust supplier monitoring system that maps sub-tier dependencies to ensure effective and efficient execution of risk mitigation strategies
  • Invest in infrastructure and technology that ensures transparency across the global supply chain, and next-generation supply chain management software that leverages technologies such as machine learning, artificial intelligence, and data analytics to gain real-time visibility into the supply chain
  • Develop predictive models that account for uncertainties and risk factors to realistically assess supply and demand and modify sourcing strategy as needed. These models can also help in running simulations to better define the associated impact, which in turn can serve as input for building comprehensive risk management programs

Despite the extra costs associated with building a proactive supply chain and qualifying multiple suppliers, doing so allows organizations to rapidly respond in pandemic-like situations, thereby reducing reliance on inventory management. Building an adaptable supply chain model that remains operational under any critical situation is the key to managing sourcing risk and avoiding global supply chain disruptions.

Please share your views on the impact of COVID-19 on the global supply chain with us at [email protected], [email protected], and [email protected].

 

Digitalization Levers Take Center Stage in Addressing Supply Chain Issues — Everest Group | Press Release

Enterprises must leverage analytics, cloud computing, control tower technology, IoT and MDM solutions to control cost, remove process inefficiencies, manage risk, and address uncertain customer demands.

Enterprises drove 15 percent growth of Supply Chain Management (SCM) Business Process Outsourcing (BPO) in 2017 as they sought to reduce high operating costs, address evolving customer demands, and manage risk and compliance. The solution to much of these problems, according to Everest Group, is digitalization.

“Enterprises can struggle with broken supply chains for many different reasons, not the least of which are siloed operations, inefficient processes and lack of visibility” said Vikas Gujral, practice director at Everest Group. “Enterprises that adopt digital solutions to combat these challenges are achieving better supply chain efficiency at lower cost. We have identified analytics, cloud computing, control tower, Internet of Things (IoT) and master data management (MDM) solutions as the emerging drivers for success in the SCM BPO market.”

  • Analytics: Analytics capabilities will help streamline supply chain operations through actionable insights to enhance visibility and control. However, despite the growing adoption, analytics penetration within supply chain remains low when compared to procurement.
  • Cloud: Cloud is becoming a major disruptive force for seamless supply chain operations, because it enables agile operations, cost containment and increased collaboration. Cloud ties all underlying pieces and technologies together, forming the basis for the supply chain of the future.
  • Control tower: Control tower—a central platform which tracks, monitors and directs activities across the supply chain—provides better visibility, cost benefits through accurate demand forecasting and inventory management, and reduced cycle time. Organizations have started realizing the benefits of control tower solutions, leading to cases of increased implementation.
  • IoT: IoT, coupled with other technologies, forms another key building block of efficient supply chain operations. IoT is valuable in numerous applications for alleviating supply chain woes and preparing enterprises for the future.
  • MDM: Demand for visibility, efficiency and smarter organization is increasingly creating the need for better data management. Consistent increase in MDM FTEs indicates greater focus on data management services

These results and other findings are explored in a recently published Everest Group report:  “Supply Chain Management (SCM) BPO—Annual Report 2018: Moving Toward a Digital Supply Chain Ecosystem.” In the report, Everest Group analyzes the global SCM BPO market in 2017, focusing on the state of the market, market size and adoption trends, and the service provider landscape.

Key Adoption Trends:

  • Market size and growth: The SCM BPO market is now estimated at US $1.5 billion and is expected to grow at a similar pace in the future.
  • Geography distribution: North America is the key geography in terms of SCM market share, followed by Europe. Asia Pacific registered the highest revenue growth in the market.
  • Industry adoption: While manufacturing still leads the adoption in SCM outsourcing, newer industries such as travel & logistics have seen an uptick in adoption.
  • Buyer size: Although large buyers still form the majority, SMBs and midmarket buyers have awakened to the benefits of outsourcing.
  • Pricing: FTE-based pricing witnessed the maximum inclusion, very closely followed by hybrid pricing.
  • Sourcing dynamics: Although onshoring has seen an uptick from past years, offshore/nearshore delivery still forms the major chunk of the SCM BPO market.

***Download a complimentary 10-page abstract of the report*** (Registration required.)

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