KPMG’s recent Future of Supply Chain report has revealed that local Australian supply chains are falling behind advanced global peers, with investment needed in supply chain workforce, ESG commitments and technology such as AI, in order to be competitive.
Peter Liddell, KPMG Global Head of Supply Chain, explained that Australian businesses are focused on building resilience after surviving multiple years of disruption and crises but they need to stay abreast of change, especially in the areas of advanced technology and ESG imperatives.
“Supply chains were required to develop resilience post COVID and are now faced with a new set of issues. Supply chain challenges are expected to continue and therefore being ‘future ready’ is key,” Liddell said.
“Our report shows that increased adoption and maturity of technology is being used to ensure the business is future ready. It’s significant that 63 percent of global businesses believe many repetitive tasks humans do will be replaced by automation”.
The results reveal that Australian supply chains perform below the level of global standards and those of their regional neighbours, despite the domestic transportation and logistics industry having access to a highly skilled workforce and a reasonable quality of infrastructure assets.
“For Australia, while the adoption of advanced robotics and automation is in its infancy, the agility and efficiencies these bring will shape the skills and roles required in future supply chains,” Liddell said.
“Already, automation is in action, with 37 percent of survey respondents using it to replace warehouse labour. Over half the companies surveyed are preparing to heavily invest in technologies and implement advanced robotics into their supply chains. What’s more, 59 percent expect manual activities that have a high risk of injury will become automated.”
The findings reveal that 47 percent of global businesses still feel vulnerable to disruption with the largest impacts from disruptions coming from macro factors, while 87 percent of global businesses see improved visibility of suppliers as vitally important – yet 43 percent are unclear about their performance.
Elsewhere, 94 percent of respondents are optimistic that digital twins will add value in supply chain planning, while 39 percent plan to invest in digital technology to bolster data synthesis and analysis.
Liddell said, “With insufficient investment in Australian supply chains, they remain highly manual and inefficient. Compared to global leaders, we can see there’s a lack of automation applied to key supply chain tasks, less data and analytics used to support strategies and decision making, and so the Australian transport and logistics process is slower, less agile and not as responsive to customer needs. In addition, it is still more expensive than global competitors.”
The trend continues with ESG, with data revealing there is still “much more to do in Australia” despite the supply chain becoming one of the most powerful sources of ESG progress.
According to Liddell, Australian businesses need to act now to keep up with global developments. “You need to analyse and understand your supply chain, prioritise its management and invest in it.”
He says that many of the industries that supply chains support are on the brink of innovative change themselves: “Companies that hope to maintain a competitive advantage should keep a very close eye on how product innovation and advanced supply chain technologies are progressing, and which modernisations they can embrace.”
Liddell said a key shift over the coming years will be how humans and automation work together, and redirecting human focus towards creative, innovative and collaborative tasks that elevate the supply chain’s potential.
“Businesses must ‘seize the day’ by investing to become ‘future ready’. The biggest risk to supply chains in Australia right now is to do nothing.”
The report is based on the KPMG Future of Supply Chain survey, which took place in November 2022 and saw 300 global supply chain executives quizzed about future trends in supply chain operations, and the key opportunities and issues that they are prioritising in the short and long term.
It sets out to support supply chain leaders in recognising and tackling three essential short-term focuses, while also preparing for three significant sector themes emerging in the next three to five years.
