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Supply Chain Management BPO: What’s Trending and What’s Coming

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Companies of today are deep believers in each other; they need each other. Their work processes are tangled together and there’s no separating them.

Forbes says, 90% of companies put their faith in outsourcing. Of that lot, almost 30% practically step into the field outsourcing over 40% of their manufacturing. This trend is even more pronounced when it happens at IT logistics levels. Almost 55% companies outsource 40% of their logistics as per volume.

Supply chain outsourcing, therefore, is a reality.

Business Process Outsourcing in Supply Chain Management has come of age very quickly. From a newborn aspect to a galvanising practice, the concept has speedily grown at over 25% compound annual growth since 2010. Today, it stands at a market rate of US $1.0-1.2 billion.

Technology is pushing SCM BPO toward maturity:

A role-playing aspect has been the digitisation of all the related activities, which has inspired companies to focus on improving customer value, efficiency of operations, quality of results, and of course, outsourcing of its work.

 “In the past, organisations tended to compartmentalise procurement, logistics and inventory management. But now, companies are seeking third-party providers who offer comprehensive Supply Chain Management BPO offerings,” says Swapnil Bhatnagar, Practice Director of Everest Group.

Flexibility of the concept is yet another major coaxing factor:

There’s huge flexibility in scaling in the supply chain concept – a must-have to fulfill sudden demands of unexpected customers in multiple ways. Every company is renovating and retooling its resources to keep in sync with tiding and ebbing demand and supply. According to the PwC, “Speed and adaptability is driving success in this volatile world.”

Not one size will fit all. The trend, hence, is also of customisation of different configurations according to the needs of customers. In other words, the big players have conjured up more than one way of surviving in the market and devised more than one winsome formula of meeting customer needs.

Who’s driving the market?

The section of buyers who has given the SCM BPO market its present direction, include:

  • 65% organisations in North America outsource their tasks to companies in the Asia Pacific. The latter region witnesses the highest growth.
  • Organisations with revenue over US $5 billion. This group stands for 69% of buyers.
  • Vertical manufacturing leads. They hold about 40% of market share.

A control tower-based concept is coming:

Because SCM BPO projects are fully dependent on inter-functional aspects, the concept of control tower is becoming more and more popular. The supply chain market seems to be thriving on such solutions to improve and enhance its operations. This concept is going to stay in the near future, too, and gain traction.

The analytics are getting intricate:

Big Data analytics shall heavily influence the SCM BPO market. The prime focus shall be on:

  • Market Overview.
  • Contractual Activity.
  • Global Adoption Trends.
  • Global Growth.
  • Service Provider Landscape.

The changing trends will demand that the service providers are quick in responding, and can ensure on-time delivery using state-of-the-art technology and clear analytics.

The potentials are huge. Where does your company stand?