The surge in supply chain management (SCM) technology adoption and investment in the past year signals a decisive shift driven by a confluence of factors that have exposed vulnerabilities and highlighted the critical need for resilience and agility. This increased investment reflects a proactive response to the persistent disruptions that have plagued global supply chains, including pandemic-induced shortages, geopolitical instability, and escalating customer expectations for transparency and speed. Companies are no longer viewing SCM technology as a mere operational enhancement but as a strategic imperative to navigate uncertainty and secure a competitive edge in an increasingly volatile market.
The percentage of IT organizations adopting SCM technology increased in 2024, as shown by the blue bars in Figure 2 from our full report, Supply Chain Management Adoption Trends and Customer Experience. The 57% adoption rate is an increase from 44% in 2023. The investment rate also grew from 33% in 2023 to 37% of IT organizations budgeting new money for SCM in 2024.
SCM systems manage the planning, movement, and storage of materials from the earliest stages of procurement through intermediate stages of production to final distribution to the end customer. While enterprise resource planning (ERP) systems focus primarily on the business’s internal operations processes, SCM looks outward to include the activities of suppliers, customers, and partners. SCM also addresses the movement and storage of materials within the organization’s scope of operations.
Companies are now aggressively investing in technologies such as AI-driven demand forecasting, blockchain for enhanced traceability, IoT-enabled real-time monitoring, and cloud-based collaborative platforms. This investment aims to build resilient and agile supply chains that can navigate unprecedented uncertainty and secure a competitive edge in a volatile market. The urgency is amplified by the need to mitigate rising lead times, manage price volatility, and address the growing demand for sustainable and ethically sourced products. However, companies must also contend with the challenges of integrating these advanced technologies with legacy systems, ensuring robust data security, and developing the skilled talent necessary for successful implementation.
“In an era defined by constant disruption, supply chain agility is no longer just a competitive advantage; it is a prerequisite for survival,” said Asif Cassim, principal analyst for Avasant Research, based in Los Angeles. “With the added uncertainty of tariffs, the imperative for supply chain resilience has dramatically intensified.”
Although SCM adoption is greatest in the retail/wholesale and manufacturing sectors, it is expanding to less traditional industries because of the use of planning software, AI, and machine learning. For example, healthcare providers often have complex logistics requirements in their shared services organizations where shelf-life considerations play an important part in managing and replenishing stocks of pharmaceuticals and medical supplies. Transportation companies, of course, have complex logistics requirements, which are fundamental issues that SCM systems address.
Furthermore, utility companies often maintain substantial inventories of equipment and maintenance and repair parts, which can significantly benefit from advanced warehouse management and logistics systems. The need to optimize asset utilization, minimize downtime, and ensure the timely availability of critical components is driving utilities to embrace sophisticated SCM solutions. However, it is important for business leaders to recognize the challenges in making SCM successful and to plan accordingly.
The full report quantifies the current adoption and investment trends for SCM technology and the benefits driving companies to expand their implementations. We assess these trends by organization size and sector and examine the ROI and TCO experiences of organizations that have adopted SCM. We conclude with practical advice for those planning new investments in SCM.
This Research Byte is a brief overview of our report, Supply Chain Management Adoption Trends and Customer Experience. The full report is available at no charge for subscribers, or it may be purchased by non-clients directly from our website. (Click for pricing.)