Supply Chain Management BPO Grows 25 Percent, Offers Immense Opportunity to Buyers, Providers—New Everest Group Report

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Rapid growth of SCM BPO—25 percent CAGR since 2010—spurred by large, North American organizations and manufacturing sector.

Supply chain management: Out of the shadows

Supply chain management: Out of the shadows

In the past, organizations tended to compartmentalize procurement, logistics and inventory management, but now companies are seeking third-party providers who offer comprehensive SCM BPO offerings.

BPO in Supply Chain Management (SCM) has grown from a nascent practice to an emerging one in a very short span of time. This practice grew at over 25 percent compound annual growth rate from 2010 to 2014, and the market size currently stands at US$1.0-1.2 billion.

In terms of adoption trends for SCM BPO, the following buyer categories are the primary drivers:

  • Adoption is led by North American organizations (65 percent)with Asia Pacific being the region with the highest growth;
  • Large-sized organizations (revenue exceeding US$5 billion) represent 69 percent of buyers; and
  • The manufacturing vertical leads in adoption (40 percent market share).

Currently, core SCM BPO processes focusing on delivery are the most frequently included in SCM BPO agreements. In the future, control tower based solutions are likely to continue to gain traction. Also, as supply chain analytics become more complex, big data analytics is likely to impact the market significantly.

These results and other findings are explored in a recently published Everest Group report: “Supply Chain Management (SCM) BPO—Annual Report 2015: SCM BPO: An Idea Whose Time Has Come.”

***Download a complimentary 14-page preview of the report*** (Registration required.) This preview summarizes report methodology, contents and key findings and offers additional resources.

The full report analyzes the global SCM BPO market, focusing on:

  • Market overview and contractual activity
  • Global growth and adoption trends
  • Solution characteristics and emerging trends
  • Service provider landscape

“In the past, organizations tended to compartmentalize procurement, logistics and inventory management, but now companies are seeking third-party providers who offer comprehensive SCM BPO offerings,” said Swapnil Bhatnagar, Everest Group practice director. “The potential is huge, so service providers are responding quickly, developing offerings that blend technology augmentation, reporting/compliance capabilities and analytics to transform the supply chain operations of their clients.”

*** Download Publication-Quality Graphics ***
High-resolution graphics illustrating key takeaways from these reports can be included in news coverage, with attribution to Everest Group. Graphics include:

  • Supply chain management: Out of the shadows
  • Supply chain management BPO contracts often paired with other functions
  • The supply chain market shows increasing interest in control tower solutions to enhance supply chain operations.
  • Analytics: A potentially disruptive force in supply chain management

***Additional Resources***

  • Procurement Outsourcing (PO) – PO Service Provider Landscape for Europe with PEAK Matrix™ Assessment (2014)
  • Supply Chain Management (SCM) BPO – Service Provider Landscape with PEAK Matrix™ Assessment 2014

About Everest Group
Everest Group, an advisor to business leaders on the next generation of global services, has a worldwide reputation for helping Global 1000 firms improve performance by optimizing back- and middle-office business services. Through practical consulting, original research and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies and management approaches. Visit http://www.everestgrp.com and research.everestgrp.com.

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Andrea M. Riffle

Robert Cathey
Cathey Communications
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