Since our inception as both a supply chain management industry analyst research firm and a Supply Chain Matters global-wide blog presence, we have produced and made available our annual predictions for industry and global supply chains.

The purpose of these predictions is to advise our clients and global-wide supply chain management teams as to what to anticipate in the coming year as well as areas to focus on in strategy and tactical direction, business process improvements and technology investments. These predictions and their implications become the basis of our continued research and consulting agenda in the coming year.  Feedback we have received indicates that this report often serves as a reference for many of our clients and readers.

This year’s predictions feature a new format in what we are designating the year 2021 as a Year of Renewal. Our individual predictions are formatted in the context of our prediction of New Thinking, New Definitions and New Directions for each area.

Prior published bogs detailing our individual 2021 predictions have included:

2021 Prediction One-The Need for Enhanced End-to-End Supply Chain Visibility.

2021 Prediction Two- Discernable Acceleration of Supply Chain Digital Transformation Initiatives but in the Context of Business-Driven Objectives

2021 Prediction Four: Omni-Channel Focused Processes and Customer Fulfillment Capabilities Now Essential to Business Growth

2021 Prediction Six: Fostering Connected Manufacturing and Supply Chain Operational Synchronization

2021 Prediction Nine: Significantly Increasing Global-Wide Transportation Costs and Eroded Service levels Will Foster New Thinking in Supply Network Sourcing, Customer Fulfillment Strategies and Last-Mile Delivery.

In this Supply Chain Matters posting we share our prediction related to the supply chain management technology focused landscape this year.

2021 Prediction Eight: More Active Investment, IPO or M&A Activities Among Sectors of the Supply Chain Technology Landscape

2021 Predictions

Prediction Summary

During 2021 supply chain management and respective technology strategy teams should anticipate more active investment, IPO, M&A, and key strategic partnership activities among certain sectors of the supply chain technology landscape.

Much of this investment and activity is going to be fueled by the increased market need for supply chain digital transformation and more real-time end-to-end visibility in inventory and material movements which are addressed in our predictions. It will further involve inter-enterprise Cloud based B2B supply chain platforms that support the synchronization of connected planning and customer fulfillment execution processes as well as analyze, synthesize, and simulate differentiating decision-making capabilities.

The past year provided substantial evidence of such activity and coming year will likely provide even further developments. Throughout most of 2020 we highlighted increased equity investment in specific supply chain technology areas despite a notable economic recession. Some noteworthy higher profile examples, among others were:

  • Supply chain Cloud platform technology provider E2open entering into a business combination agreement with CC Neuberger Principal Holdings 1, as a publicly traded special purpose acquisition company (SPAC) listing on the New York Stock Exchange which raised $1.4 billion in the truncation. Prior to the move, E2open had acquired multiple other tech providers.
  • Transportation and logistics real-time visibility platform provider Project44 completing a $100 million Series D financing round, bringing total raised investment to $241 million.
  • Business spend management technology provider Coupa Software’s announced acquisition of supply chain design and analytics technology provider Llamasoft for a reported purchase price of approximately $1.5 billion. The acquisition was aimed to strengthen Coupa’s capabilities in direct procurement spend management and among broader supply chain business process support capabilities in the area of procurement, supply network design, simulation and artificial intelligence enabled decision-making.

A further catalyst to our prediction was that in December 2020, a groundbreaking announced ruling from the Securities and Exchange Commission (SEC) approved a New York Stock Exchange plan to allow for direct initial public offering (IPO) of stock without having to pay expensive underwriting fees. This announcement is being billed as the ability of rapidly growing companies, including tech providers, to sell shares directly on the exchange to raise additional capital or provide exit strategies for existing founding or equity investors.

New Thinking and Directions Implications

Multi-industry supply chain managements teams need to continue to monitor such developments especially if they involve existing or deemed attractive technology providers. This year has already featured increased activities as profiled in our Supply Chain Matters February 5th Edition of This Week in Supply Chain Tech which included completion of a $60 million Series B funding round for logistics process orchestration tech provider Slync.io.

As supply chain management teams increase their investments in specific needed technologies, most initiatives will be managed scope efforts designed to address specific business process automation or transformation needs. Some of these investments will represent relationships and partnerships with specific technology providers that will likely span multi-year incremental phases of technology adoption. Much more important with increased attractiveness of Cloud based technology platforms are the multi-year contracts that will make-up usage of the technology.

Motivations from equity investors in spurring M&A, IPO and strategic partnerships are to ensure longer-term or more accelerated revenue and profitability growth by targeting multi-year subscription-based revenue flows. Thus, a key target will be product demand, customer fulfillment or B2B supply network technology platforms with attractive value propositions. This is the key area to be watchful of in the coming year.

A New Thinking consideration is that existing and future multi-year technology contract relationships should migrate toward the direct stewardship and responsibility of supply chain management operations, planning or executive leadership.

A further consideration in the technology market dimension is the ability of growing small and medium enterprises to be able to continue to leverage advanced technology at reasonable subscription price points. Such organizations have their own unique challenges in digital transformation, enhanced end-to-end visibility and added online selling and fulfillment needs.  As noted in Prediction Four, increased regulatory scrutiny by various global regulators focused on specific deemed anti-competitive, abusive, or dominant platform providers may likely expand to factor affordable or wider market offerings for smaller businesses.

For our part Supply Chain Matters will continue to highlight noteworthy investments in the supply chain management technology area in the coming weeks, along with our assessments of the implications of such moves for existing or prospective users of such technology.  We would not be surprised by the potential of highlighting a couple more blockbuster tech announcements this year, particularly in the online customer fulfillment or B2B supply chain network market segments.

 

Obtaining a Copy

Our Ferrari Consulting and Research Group Advisory Report– 2021 Predictions for Industry and Global Supply Chains is now available for complimentary downloading with our Research Center. Readers can obtain a complete copy by providing some basic registration information.

Stay tuned to Supply Chain Matters for our sharing of additional predictions by bookmarking this site.

 

Bob Ferrari

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