Research Summary. As the backbone of modern enterprises, supply chains play a crucial role in operational efficiency and business success. In 2026, ongoing challenges related to visibility and disruptions continue to impact the industry. What are the current dynamics affecting supply chains? Our comprehensive analysis reveals:
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Only 6% of companies report full visibility of their supply chain. A staggering 69% lack total visibility.
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38.8% of U.S. small businesses have reported experiencing supply chain delays.
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The global supply chain market is currently valued at $15.85 billion.
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The global supply chain market is projected to grow at a CAGR of 11.2% from 2020 to 2027.
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90% of global merchandise is transported by sea.
For a deeper dive into the data, explore the sections below:
Trends and Predictions | Inventory Management | Disruption
Benefits of Effective Supply Chain Management
Understanding the ramifications of effective versus ineffective supply chain management is essential for any organization. Streamlined supply chains can lead to significant cost savings, time efficiency, and minimized disruptions. Here are key insights:
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Reducing supply chain costs from 9% to 4% can potentially double profits.
Supply chains significantly influence company profits. This is particularly true for industrial suppliers, where average supply chain costs hover around 13.2%, while top-performing companies have optimized this to 7.9%, achieving a remarkable 40% savings.
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57% of companies believe supply chain management offers a competitive advantage.
Furthermore, 70% recognize supply chains as a vital driver of quality customer service. This indicates a strong awareness of the importance of efficient supply chains.
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Supply chains contribute to company growth by offering a wider array of customized, reliable, sustainable, and rapidly delivered products.
Demand for these factors has surged, with increases noted in: wider selection (71%), customization (76%), reliability (73%), sustainability (69%), and rapid delivery (76%).
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The most utilized Key Performance Indicator (KPI) for supply chain monitoring is daily performance, at 40%.
While daily performance leads, other KPIs critical for supply chain optimization include cost reduction (35%), production service rate (29%), inventory turnover (28%), and production time (27%).
Current Trends and Predictions in the Supply Chain Industry
Despite ongoing challenges, the supply chain market is steadily expanding, fueled by advancements in technology and globalization. Here are some insights from our research:
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The global supply chain market is projected to maintain a CAGR of 11.2% from 2020 to 2027.
This indicates growth from $15.85 billion in 2019 to an anticipated $37.41 billion by 2027, reflecting resilience even in challenging times.
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The Transportation Management System (TMS) market is expected to experience a CAGR of 11.7% from 2021 to 2028.
It’s anticipated to grow from a market value of $120.70 billion in 2021 to $261.89 billion by 2028.
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The Global Logistics Automation Market boasts the highest CAGR among supply chain markets, at 12.4%.
With a market size of $50.9 billion in 2020, it is projected to reach $82.3 billion by 2026.
Inventory Management Insights
Effective inventory management is pivotal in achieving an optimal supply chain. However, there is a notable difference between inventory management in small businesses and large corporations. Here’s what our findings revealed:
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Only 22% of companies have a proactive supply chain network.
Proactive management enables companies to respond to shifts in supply or demand before they escalate into serious issues. The limited percentage of companies operating this way reveals vulnerabilities that can be detrimental to business.
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43% of small businesses do not track their inventory.
Additionally, 21% report that they “don’t have inventory.” Among those tracking inventory, the most common method is through accounting software like QuickBooks, utilized by 24% of small business owners.
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67.4% of supply chain managers rely on Excel spreadsheets as a management tool.
This reliance increases with experience: around half of new managers use it, while over 75% of late majority managers do.
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On average, U.S. retail operations maintain a supply chain accuracy of only 63%.
This lack of accuracy can lead to significant delays, with 34% of businesses reporting late shipments due to selling products that were out of stock.
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In 2020, the estimated value of out-of-stock items reached $1.14 trillion.
In stark contrast, overstock items were valued at $626 billion, highlighting a significant disparity. This issue was particularly prominent in grocery stores, where the value of out-of-stock items far exceeded that of overstock items.
Statistics on Supply Chain Disruptions
Supply chain disruptions can severely affect businesses of all sizes. Here’s what our research uncovered about the impact of these disruptions:
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Globally, 12% of retailers reported significant supply chain disruptions.
Interestingly, 32% of retailers indicated experiencing minimal disruption. However, maintaining stock proved to be a critical issue, with 28% facing shortages and seeking alternative sourcing options.
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From 2019 to 2020, overall supply chain disruptions increased by 14%.
In 2019, there were an average of 3,700 supply chain disruptors, which rose to 4,200 in 2020.
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Supply chain disruptions can lead to a staggering 62% financial loss.
Other business aspects affected by these disruptions, such as logistics and reputation, can experience an average 54% decline.
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The primary cause of global supply chain disruptions is mergers and acquisitions, accounting for 66%.
Other notable causes include extreme weather (41%), factory fires (37%), and business sales (33%).
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In the U.S., the leading cause of supply chain disruptions is unplanned IT outages, affecting 68% of businesses.
Other common causes include adverse weather (62%), talent loss (51%), cyber-attacks (50%), and fires (44%).
Supply Chain Statistics FAQ
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A supply chain is a comprehensive network linking a company to its suppliers. This interconnection allows businesses to produce their products effectively. Supply chains encompass various elements, including individuals, organizations, information, and resources. The term “chain” signifies the process of creating a product purchased by a consumer.
As demonstrated by these statistics, supply chains are vital for effective business management. Disruptions in supply chains can lead to a financial impact of 62%, and reducing supply chain costs from 9% to 4% can double profits.
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What are the supply chain steps?
The general steps in a supply chain include:
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Original sourcing or extraction of raw materials
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Refining raw materials into basic parts or resources
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Assembling parts and resources into finished products
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Consumers purchasing the products
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Shipping finished products to customers (for online businesses)
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How can I improve my supply chain?
Improving your supply chain is achievable through several strategies. Notably, 43% of small businesses do not track their inventory. To enhance your supply chain, consider the following steps:
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Track your inventory using digital tools like QuickBooks or Excel.
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Establish a supply chain council dedicated to communication, goal-setting, and management.
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Foster positive relationships with your suppliers.
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Identify potential risks and disruptions to proactively prepare.
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Enhance logistics and mitigate carbon emissions through sustainability initiatives.
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What is the current worth of the supply chain industry?
The supply chain industry is currently valued at $15.85 billion. It is projected to grow at a CAGR of 11.2% from 2020 to 2027, indicating resilience despite previous challenges. By 2027, its value is expected to exceed $37.41 billion.
Additionally, the Transportation Management System (TMS) industry is valued at $120.7 billion, with a projected CAGR of 11.7%, reaching $261.89 billion by 2028. While TMS encompasses broader logistics, it plays a significant role in supply chain efficiency.
Moreover, the Global Logistics Automation market is expected to thrive, with a CAGR of 12.4%, likely growing from $50.9 billion in 2020 to $82.3 billion by 2026.
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What are the four key elements of supply chain management?
The four main components of supply chain management include procurement, operations, distribution, and integration. These elements collaborate to ensure smooth operations throughout the supply chain.
Procurement involves acquiring the necessary tools, equipment, and materials for production. Operations focus on optimizing processes for efficiency. Distribution ensures timely delivery of products to their destinations, whether to retail locations or directly to consumers. Lastly, integration guarantees seamless collaboration among these elements, enhancing overall performance.
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What are the primary issues in supply chains today?
Key supply chain challenges include transportation costs, accurate inventory management, and timely pickup and delivery.
Since the pandemic, transportation costs have escalated due to backlogs, labor shortages, and rising fuel prices, straining many businesses. Furthermore, maintaining balanced inventory levels is crucial; however, only 22% of companies have a proactive supply chain, leading to difficulties in meeting customer demands.
Additionally, 43% of small businesses lack inventory tracking, complicating effective customer service. Timeliness in delivery remains a critical issue, especially for companies relying on third-party logistics, which can lead to significant disruptions.
Conclusion
With a market size of $15.85 billion, supply chains are instrumental to the operation of businesses, regardless of size. Approximately 57% of companies recognize that effective supply chain management provides a competitive edge, and optimizing costs from 9% to 4% can double profits.
However, the state of supply chain management remains concerning, particularly among small businesses. Only 6% of companies report comprehensive visibility into their supply chains, and 43% of small businesses do not track inventory, leading to increased disruptions and potential financial losses of up to 62%.
In light of these challenges, prioritizing effective supply chain management is essential for organizational success and customer satisfaction. Companies must take actionable steps to enhance their supply chains for the benefit of both their operations and their bottom line.
Sources:
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GEODIS. “Supply Chain Worldwide Survey.” Accessed on September 7th, 2021.
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United States Census Bureau. “Census Bureau’s Small Business Pulse Survey Reveals Delays From Domestic, Foreign Suppliers.” Accessed on September 7th, 2021.
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Allied Market Research. “Supply Chain Management Market Statistics: 2027.” Accessed on September 7th, 2021.
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Logistics Bureau. “Reducing Supply Chain Costs.” Accessed on September 7th, 2021.
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Supply Chain Management Review. “Five Ways to Drive Growth Through Your Supply Chain.” Accessed on September 7th, 2021.
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Grand View Research. “Transportation Management Systems Market Report, 2021-2028.” Accessed on September 7th, 2021.
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Research and Markets. “Outlook on the Logistics Automation Global Market to 2026 – Industry Analysis and Forecasts.” Accessed on September 7th, 2021.
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Wasp Barcode Technologies. “State of Small Business Report.” Accessed on September 8th, 2021.
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SupplyChainDive. “Two-thirds of companies consider Excel a supply chain system.” Accessed on September 8th, 2021.
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IHL Group. “Disrupted Retail – How the Pandemic Exposed Retail’s Hidden Inventory Distortion.” Accessed on September 8th, 2021.
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RetailNext. “CEO Retailer Pulse #2.” Accessed on September 8th, 2021.
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ISM. “A Historic Year for Supply Chain Threats, Even Without COVID-19” Accessed on September 8th, 2021.
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BCI. “BCI Supply Chain Resilience Report 2017.” Accessed on September 8th, 2021.
Author
Chris Kolmar is a co-founder of Zippia and the editor-in-chief of the Zippia career advice blog. He has hired over 50 people in his career, been hired five times, and wants to help you land your next job. His research has been featured on the New York Times, Thrillist, VOX, The Atlantic, and a host of local news. More recently, he's been quoted on USA Today, BusinessInsider, and CNBC.
