How Technology Suppliers Can Seize the US$20 Billion Market Opportunity for Supply Chain Control Towers

Market Overview

Below is a compilation of some of ABI Research's most noteworthy forecasts for the supply chain control tower market.

• Growing at a Compound Annual Growth Rate (CAGR) of 13.2%, supply chain control tower revenue will increase from US$7.5 billion in 2022 to more than US$20 billion by 2030.
• Manufacturing, pharmaceutical, healthcare, retail, Fast Moving Consumer Goods (FMCG) companies, and Logistics Service Providers (LSPs) are currently the highest adopters of supply chain control tower solutions. Both manufacturers and LSPs were among the earliest adopters, initially looking to gain visibility and control over transport operations and continuing to expand as companies digitalized more areas of their operations. For retail and pharmaceutical companies, investment has largely been driven by track and trace regulations, limited lead times, and optimizing inbound transport to ensure stock availability and effective pricing.

North America: Accounting for roughly 40% of global supply chain control tower revenue in 2022, North America is expected to see high growth in the short term with organizations in the region maintaining the greatest appetite for supply chain digitalization and the highest spending. Toward the end of the forecast period, slower growth Year-over-Year (YoY) is expected as the market naturally saturates, but software updates and growing capabilities will keep investment flowing. By 2030, roughly 70% of the Total Addressable Market (TAM) in North America will have adopted some form of supply chain control tower.

Europe: At roughly 34% of global market share in 2022, Europe has the second largest spending on supply chain control towers. Short-term investment is expected to be largely driven by more stringent regulations present than in other parts of the world, particularly in the food and pharmaceutical industries. The European Union (EU) General Food Law and the EU Falsified Medicines Directive (FMD), among others, are pushing businesses to adopt solutions that can help consolidate tracking information and simplify reporting to authorities. By 2030, over 60% of the TAM in Europe will have adopted some form of supply chain control tower.

Asia-Pacific: Spending on supply chain control towers is currently lower across Asia-Pacific relative to North America and Europe, but the region is expected to see a higher growth rate of 21.7% through 2030. Asia-Pacific holds the highest market potential across all four regions, driven by the region’s sheer economic size, trade connections, and strong presence of industrial and manufacturing businesses. By 2030, over half of the region’s businesses are expected to have deployed a supply chain control tower, pushing revenue to the second highest globally.

Rest of World (RoW): The RoW holds the lowest spending on supply chain control towers, but also holds significant market potential. Particularly in Latin America, the dominant sectors of agriculture and mining are expected to invite strong investment in supply chain control towers, as multinational enterprises look to gain visibility into the End-to-End (E2E) supply chain. Economic growth across the Middle East & Africa will also drive increasing spending on digitalization tools, continuing the increase in revenue across the region to 2030 and beyond. Less of the TAM across the RoW is expected to have taken on a supply chain control tower by 2030 in comparison to the other regions, but the global market share of revenue is expected to grow from roughly 8% to over 15%.

“Organizations are looking beyond just visibility of their operations and are seeking tools that allow them to harness their data feeds and get ahead of inevitable supply chain disruption.” – Ryan Wiggin, Industry Analyst at ABI Research

Table 1: Supply Chain Control Tower Revenue by Industry

World Markets: 2022 to 2030

(Source: ABI Research)

Key Decision Items

Support End Users through Network Integration

Companies adopting supply chain control towers will often need to perform a degree of integration work with stakeholders and partners, and help onboard them to the new system. To smooth rollout and help clients achieve a faster Return on Investment (ROI), supply chain control tower providers should offer continued support after rollout and help simplify the process of adoption.

Consider Partnering with Supply Chain Visibility Providers

Given that supply chain control towers rely on effective data, partnering with global supply chain visibility companies and asset tracking solution providers can support supply chain control tower effectiveness. For example, o9 Solutions has partnered with both project44 and FourKites, two of the world’s largest supply chain visibility platforms. The partnerships allow customers to access out-of-the-box integrations between o9’s supply chain control tower and the visibility platforms, providing access to global data and o9’s supply chain control tower functionality.

Siemens has also partnered with project44 and companies such as HERE Technologies, which specializes in mapping technologies and location data. Not only do these partnerships enhance the supply chain control tower capabilities, but they also enhance go-to-market strategies by tapping into these existing customer bases.

Establish Secure Data Management and Make This a Key Selling Point

Data management and cybersecurity are top priorities among supply chain companies. According to Sonatype, supply chain cyberattacks increased 633% from 2021 to 2022. When rolling out any software package, particularly ones that look to share data as supply chain control towers do, end users will be hesitant. Ensuring that cybersecurity is a top priority, it is proven and end users are aware that they can moderate the data that are shared, which are key factors when attracting new customers.

Develop Low/No-Code Offerings for User Customization

Every end user of a supply chain control tower wants a solution that can mold to their individual operations’ needs. But if every change or upscaling of a system requires support from the solution provider, this can be incredibly costly and time-consuming, disincentivizing users from continuing to invest in their system. Difficulty in adapting and developing a solution is one of the primary reasons that companies change their system provider. Offering low/no-code customization is a defining feature of supply chain control towers that both attract and maintain customers.

What Should Users of Supply Chain Control Towers Be Wary of?

In this section, ABI Research identifies four key approaches for optimally adopting a supply chain control tower.

• Seek Contractual Relationships with Stakeholders and Prioritize Data Security: Adopting and leveraging supply chain control towers becomes easier when organizations can guarantee data security with their stakeholders. Establishing contracts that address initial concerns around data sharing can greatly smooth adoption and leverage the supply chain control tower to its full potential.
• Ensure Stakeholders Are Equipped and Ready to Leverage the Supply Chain Control Tower: Change management is key when it comes to maximizing the benefits of any newly adopted technology. As an enterprise-wide solution with reach into external providers, informing and training employees across every division of the supply chain will be critical for a swift ROI.
• Taking an Active Role in the Supply Chain Control Tower Deployment Is Key: Leading U.S. LSP Penske has deployed a supply chain control tower in its network, allowing customers to access a single portal, while Penske performs all of the necessary integration work itself.
• Deploy the Supply Chain Control Tower Where the Data Feeds Are: Supply chain control towers will only operate with the data it is being fed, meaning the quality of the data is critical. There may be a number of areas along the supply chain that do not currently have asset tracking solutions deployed, which will ultimately create holes in the data and limit the supply chain control tower’s capabilities. Start small, assess the type of supply chain control tower that is appropriate for your business now, and then scale up accordingly.

Key Market Players to Watch

• Azure
• Blue Yonder
• DHL
• DSV
• Google
• IBM Corp
• Infor
• Kinaxis
• Maersk
• Microsoft Corporation
• o9 Solutions
• Palantir
• SAP
• SEAT
• Siemens

Dig Deeper for the Full Picture

These market insights came from ABI Research’s Supply Chain Control Towers: Market Analysis report. For a more detailed overview, download the report today. This content is part of our Supply Chain Control Towers Research Spotlight.