Hidden in plain sight: a keystone of the global market.

25 Sep 2023

Supply Chain Management and Logistics Technologies: An Overlooked Investment Opportunity for Family Offices

Prof. Matt Waller, Respada CoE for Supply Chain and Dean Emeritus at Sam Walton College of Business
Author: Prof. Matt Waller, Respada CoE for Supply Chain and Dean Emeritus at Sam Walton College of Business
10:00 min read

In a world that never stops moving, where the pace of commerce and technology surges forward like a relentless tide, there lies a hidden frontier. A frontier not of land or space, but of logistics and technology. A frontier where the greatest commercial opportunities are not just on the horizon, but already underfoot. Beneath the surface of every purchase, every delivery, every tick of the clock, there is an intricate dance of supply chain management and logistics technologies. And while some look to the stars or the screens for their next investment, savvy family offices see the overlooked goldmine that lies in the machinery of our global economy.

Logistics and supply chain management serve as the vital gears in the clockwork of contemporary business practices. Corporations lean on proficient logistics and resilient supply chains to transport their products to consumers spanning the globe. Nonetheless, escalating customer expectations for expedited deliveries, the expansion of global commerce, and interruptions in the supply chain have amplified the complexity of logistics and supply chain management. Emerging technologies are the beacon in this labyrinth of challenges.

Logistics, a ballet of coordinating the transit and storage of commodities whilst optimizing expenses and meeting customer requirements, intertwines with supply chain management, which orchestrates all parties involved in satisfying customer demands, from vendors to retailers. Innovations like transportation management systems, warehouse management systems, inventory management software, and artificial intelligence are the catalysts propelling companies to reinvent their logistics operations and supply chains.

The current renaissance in supply chain management and logistics technologies equip businesses with comprehensive visibility across global operations, automation of logistics procedures, sophisticated supply chain analytics, and real-time tracking of goods. Pioneering technologies like blockchain, the Internet of Things, drones, autonomous vehicles, and demand signal repositories are also joining the dance.

Merging supply chain management and logistics solutions can offer a more panoramic view of operations and unearth invaluable insights to enhance efficiency, slash expenses, and boost customer satisfaction. Embedding technologies like artificial intelligence and fintech can further metamorphose supply chain management, birthing more unified and intelligent systems.

The sector of supply chain management and logistics technologies represents an underestimated goldmine of investment opportunities due to the colossal market it caters to and the potential for efficiency enhancements. By strategically investing early in promising SCML enterprises, family offices can secure the lucrative upside as the adoption of these technologies gains momentum.

Understanding Logistics and Supply Chain Management

Logistics, in essence, is a grand orchestration and meticulous management of the transit and holding of inventories, with an objective to pare down overall expenses whilst fulfilling customer service expectations. This encompasses transportation, inventory, warehousing, material handling, and other associated costs. The ultimate aim is to craft a streamlined and low cost supply chain that ensures timely and pristine delivery of products to customers, like an unwavering rhythm in the symphony of global commerce.

In logistics, inventory management is a critical aspect, as it involves ensuring the right quantities of products are stored in the right places, and that they are distributed to customers in a timely manner. This requires careful planning and coordination with transportation providers, warehouses, and other stakeholders.

To minimize costs, logistics managers must analyze data and trends to identify areas for improvement. They must also consider factors such as demand forecasting, production schedules, and distribution networks to optimize the flow of goods.

Supply chain management (SCM) involves coordinating the flow of goods, services, information and finances between suppliers, manufacturers, wholesalers, distributors and retailers in order to meet customer demands. It aims to improve efficiency, reduce costs and enhance collaboration across the entire supply chain network.

Several factors have driven the demand for faster delivery times in the logistics industry. The explosive growth of global trade, e-commerce sales, and rising consumer expectations for ever faster deliveries have been major drivers. Additionally, geopolitical tensions, supply chain disruptions, and increased natural disasters have made just-in-time delivery and contingency planning essential. The need for faster delivery times has created a high demand for technologies that provide end-to-end visibility across global supply chains, automation of logistics processes, advanced business analytics capabilities, and integration of data and systems across logistics networks. Technologies that offer real-time tracking, optimized routing, predictive analytics, and the ability to integrate data from multiple logistics partners have become critical tools to meet the challenges of speed and resilience facing the logistics industry.

Here are some examples of SCML technologies:

  • Transportation Management Systems (TMS): These systems are used to manage the movement of goods from one location to another. They help to optimize routes, manage schedules, and track shipments. They are also referred to as transportation procurement solutions.
  • Warehouse Management Systems (WMS): These systems are used to manage the storage and handling of goods within a warehouse. They help to optimize warehouse layouts, manage inventory, and track shipments.
  • Supply Chain Visibility Software: These systems provide real-time visibility into the supply chain, allowing businesses to track shipments, manage inventory, and identify potential disruptions.
  • Predictive Analytics: These systems use data and statistical models to forecast future demand and optimize supply chain operations.
  • Robotic Process Automation (RPA): These systems use software bots to automate repetitive tasks, such as data entry, invoice processing, and order management. Examples of RPA software include Automation Anywhere, Blue Prism, and UiPath.
  • Blockchain: This technology is used to securely and transparently track goods throughout the supply chain.
  • Internet of Things (IoT) devices: These devices, such as sensors and RFID tags, are used to track and monitor goods throughout the supply chain.
  • Drones and autonomous vehicles: These technologies are being used to transport goods and supplies in a more efficient and cost-effective way.
  • Demand signal repository (DSR): This is a database or data storage system that collects, stores, and manages demand signals from various sources across a business or organization. It serves as a centralized platform for capturing, processing, and analyzing demand data to help businesses make better-informed decisions about production, inventory management, and supply chain optimization. A DSR typically contains data on customer orders, sales forecasts, production schedules, inventory levels, and other relevant demand-related information. The repository may also integrate data from various systems, such as enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM) systems, to provide a comprehensive view of demand across the organization.
  • Inventory Management System: These solutions help companies know how much safety stock to hold, when to reorder, and how much to reorder.
  • Supplier discovery and evaluation: Sourcing software that helps businesses to identify and evaluate potential suppliers. This can be done by providing access to supplier databases, allowing businesses to search for suppliers by criteria such as product or service, location, and price.
  • RFP management: This software can help businesses to create and manage RFPs. This can include features such as templates, workflow management, and supplier collaboration.
  • Supplier performance tracking: This software can help businesses to track supplier performance. This can include features such as supplier ratings, performance metrics, and alerts.
  • Contract management: This software can help businesses to manage contracts. This can include features such as contract creation, negotiation, and storage.
  • Collaborative forecasting software: This is a type of software that helps businesses to collaborate with their suppliers and other stakeholders to create more accurate forecasts. It can help to improve visibility into demand, identify risks, and make better decisions about inventory levels and production schedules.
  • Planogram software: This is a type of software that helps businesses to create and manage planograms. Planograms are schematic diagrams that show the layout of products on a shelf or in a store. They are used to optimize the placement of products to maximize sales and customer satisfaction.
  • Yard management software (YMS): This is a type of software that helps businesses to manage their yard operations. It can be used to track the movement of trucks, trailers, and other vehicles in the yard, as well as to manage yard resources such as space and equipment.
  • Returns management software: Returns management software can be used to automate the returns process, from the initial customer request to the final disposition of the returned item. This software can help to reduce the amount of manual work required, improve customer satisfaction, and save money.
  • Customs and Compliance Management Software: For importing and exporting, it's important to comply with various customs regulations. This software can help in ensuring compliance with these rules, managing customs documentation, duties, and taxes, and providing reports for auditing purposes.
  • Tariff Classification Software: These systems can help you correctly classify your products under the Harmonized System (HS) codes, which are used by customs authorities worldwide to identify products and apply the appropriate tariffs.
  • Free Trade Agreement Utilization Software: The software can identify opportunities to reduce or eliminate duties through the use of Free Trade Agreements (FTAs) and other special programs.
  • Customs Documentation Software: The creation, management, and submission of all necessary customs documents can be streamlined and automated using this type of software.

There are even more different types of SCML solutions and within each of the above, there are many different kinds of these solutions.

The Arbitrage Potential in SCML

The supply chain management and logistics (SCML) sector plays a vital role in the modern economy, yet it remains an under-invested area. This presents a prime arbitrage opportunity for family offices and private investors to take advantage of the high upside potential as adoption of these technologies accelerates.

One of the main reasons for the lack of investment in SCML is that many family offices and investors are unfamiliar with the market opportunity. Additionally, venture capital and private equity firms have only recently started exploring this space, leaving a significant gap in funding for early-stage SCML companies.

Another investment opportunity in SCML is the combination of supply chain management and logistics software solutions. By integrating different point solutions, businesses can create a more comprehensive view of their operations and gain insights that would not be possible with a single solution.

Point solutions, in the context of SCML software, refer to software applications that address specific aspects of the supply chain. These solutions are designed to solve particular problems or meet specific needs within the supply chain, but they may not provide a comprehensive solution that integrates all aspects of the supply chain.

However, combining supply chain management and logistics software solutions can create a more holistic view of operations and provide valuable insights. This integrated approach can lead to improved efficiency, reduced costs, and increased customer satisfaction.

In conclusion, the under-investment in the SCML sector presents a significant opportunity for family offices and private investors to take advantage of the high upside potential. By investing in promising SCML companies and combining point solutions, businesses can create a more comprehensive and integrated system that can improve their operations and increase their competitiveness in the market.

Merging Fintech into SCML Technologies

Fintech, short for financial technology, is a burgeoning industry that leverages cutting-edge technology to enhance and streamline financial services. Fintech applications range from digital payment platforms to cryptocurrency exchanges, and they are fundamentally altering the landscape of the financial industry.

In the context of Supply Chain Management and Logistics (SCML), fintech can be integrated in a number of innovative ways to optimize operations and investment. For instance, fintech solutions can be employed to automate and streamline financial transactions within the supply chain, easing processes such as invoicing, payment processing, and financial tracking. This could result in significant cost savings, increased efficiency, and improved transparency.

Merging Artificial Intelligence into SCML Technologies

Artificial Intelligence (AI) refers to the development of computer systems that can perform tasks typically requiring human intelligence. This includes learning and adapting to new information, understanding complex concepts, recognizing patterns, and making decisions. AI has a broad range of applications, spanning numerous industries and sectors.

In the context of Supply Chain Management and Logistics (SCML), AI can be integrated in several innovative ways to enhance operations and investment opportunities. AI can be used to automate various processes within the supply chain, such as inventory management, demand forecasting, and logistics planning. This could lead to significant improvements in efficiency and cost reduction, making SCML companies more attractive to family offices and private investors.

AI can also be used to analyze vast amounts of data to identify patterns and trends, providing early-stage SCML companies with valuable insights into market dynamics. This can help these companies make more informed decisions and better position themselves to attract funding from investors.

Moreover, the integration of AI can transform the way SCML companies approach their operations. By combining traditional SCML point solutions with AI, businesses can create a more comprehensive and cohesive system that not only addresses specific supply chain needs but also incorporates intelligent decision-making into the mix.

For example, AI could be used to optimize route planning for logistics, taking into account factors such as traffic, weather, and fuel costs. It could also be used to predict demand for products, allowing companies to better manage their inventory and reduce wastage.


The sector of supply chain management and logistics technologies stands as an underappreciated and undervalued trove of investment opportunities for family offices. As global supply chains weave into more elaborate labyrinths and the demand for swifter, more transparent delivery surges, technology will emerge as the indispensable compass guiding efficiency and resilience.

By strategically planting early investments in promising SCML enterprises, family offices can reap the rewards from the colossal addressable market as the adoption of these technologies gains momentum. Furthermore, there is immense potential in merging point solutions to fabricate more integrated systems that offer panoramic operational insights.

The seamless blend of emerging technologies such as AI and fintech with traditional SCML solutions also unfurls promising opportunities to revolutionize supply chain management. Family offices that spot these trends in their infancy can gain a foothold in highly scalable business models in a crucial and rapidly expanding sector of the economy.

Armed with specialized industry knowledge and patient capital, family offices are uniquely situated to harvest outsized returns by investing in the forthcoming wave of supply chain management and logistics technologies. While many investors overlook this sector, those who discern the arbitrage can profit from the upside in this critical pillar of the global economy.

Topics: Supply Chain, Logistics

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