Reinventing Supply Chains 2030

Towards an adaptable, sustainable, cognitive ecosystem

63%

of companies say they are adapting supply chains to manage disruption.
93%

of Champions say they are taking a holistic transformation approach.
63%

of Champions are prepared to comply with ESG regulations, compared to 12% of all respondents.
40%

of companies have initiatives underway to regionalise supply chains.

Your expert for questions

Oliver Sargent
Partner, PwC Australia
Email

Supply Chain Champions are reinventing supply chains

Supply chains are undergoing their biggest metamorphosis in decades, according to PwC’s global study of more than 1,000 supply chain leaders. Geopolitical crises, technological advances and climate change, among other disruptors, are forcing leaders to reinvent supply chains to be more adaptable, sustainable, and cognitive, i. e., building thinking systems that grow smarter and evolve. Executives say they are boosting transparency, embedding technologies like AI and robotics to increase efficiencies, and connecting all stakeholders to spot and solve problems.

Executives shared aggressive plans but only a minority are achieving their aims. These industry leaders – PwC’s Champions – say wholesale transformation is complex. It requires sophisticated capabilities and technologies, and new ways of working – along with a clear vision and roadmap, resource capacity and staff buy-in. Report insights into best practices, and our Supply Chain Compass matching disruptive trends with solutions, can help you on your way.

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The study at a glance

Six Disruptive Trends

Supply chain executives face severe disruption on all fronts. Geopolitical crises, climate impacts, rising costs and inflation. Increasing government demands for ESG compliance. Consumers want companies to step up environmental and social efforts too, while also delivering high-quality, low-priced products to their doors. Disruptive trends like these are giving rise to new supply chain models and competitive ecosystems. A complicated picture is further destabilised by major worldwide talent shortages and fast technological advances. PwC has distilled major disruptions into six key trends:

Supply chains are getting battered by geopolitical, trade and energy crises, extreme weather, price hikes, inflation, and infrastructure downtimes (think the bridge in Baltimore). These disruptions are severely impacting labour, transport and raw material costs, among others.

A significant wave of ESG requirements is forcing companies to behave more sustainably and transparently. Regulatory requirements are growing in scope and complexity, with increasingly smaller companies and their entire supply chains, required to comply or face serious financial penalties, exclusion from public contracts and reputational damage.

Regulatory demands to track and trace materials and goods across value chains, as well the need for resilience and efficiency, is spurring competition to join fully-integrated ecosystems and also between them. Ecosystems help stakeholders – from raw material producers to customers – collaborate in a seamless, transparent and efficient way to share data, react faster to problems and improve customer experiences.

More and more, customers demand sustainable, climate-neutral products and services. They want transparency and ethical behaviour, as well as convenience, fast delivery and value for money. Supply chain models are evolving to be more service-oriented, sustainable and circular to meet these demands.

Massive global talent shortages – with millions of jobs going unfilled – are disrupting daily operations, and leading to bottlenecks and delays. At the same time, technological advances are changing the nature of jobs and the skills required. Worker shortages undermine productivity and efficiency, and impede a company’s ability to grow and compete.

Technologies are dramatically changing how supply chains operate. This disruptive threat also represents a solution to other disruptions as technologies enhance data visibility, automate manual work, processes and decision-making, and improve communication and collaboration across entire value chains.

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Reinventing Supply Chains – Towards an adaptable, sustainable and cognitive ecosystem

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What sets Champions apart?

Supply chain executives are making aggressive plans but only a small group of Champions are fully executing on them. These industry leaders are taking a holistic, integrated approach – working transparently, productively and collaboratively with stakeholders to address shared challenges and promote economic growth. Champions are three times more likely to be part of an ecosystem than other companies, and are more likely to be adapting business models to respond to changing customer and regulatory requirements. Champions with implemented priority capabilities and technologies anticipate supply chain cost reductions of 19% and revenue gains of 16%.

Supply Chain Compass: A guiding framework to respond to disruptive trends

Increasing frequency of severe supply chain disruptions
Rising competition of fully-integrated ecosystems
Growing talent and workforce scarcity
Evolving technological advances
Increasing need to support new business models
Expanding ESG compliance

Increasing frequency of severe supply chain disruptions

Market turbulence and disruption will continue to impact supply chain performance, requiring serious interventions to avoid downtime, higher costs and loss of revenue.
To better respond to challenges, companies should invest in visibility, integrated partner collaboration and planning, and flexible transport management, alongside exploring alternative sourcing strategies.
To combat disruption while enabling sustainable growth, companies should establish a continuous resilience improvement cycle to monitor risks, with robust metrics and an assessment system to cope with short-term, medium-term and long-term turbulence.

Rising competition of fully-integrated ecosystems

Value chain ecosystems are growing in number and complexity. There is fierce competition to join or establish them.
Leading value chain ecosystems are characterised by end-to-end process thinking and visibility, open data, and seamless collaboration with partners through integrated planning and execution.
Companies must understand the purpose and benefits of various ecosystems, as well as the effort involved in joining or establishing one.

Growing talent and workforce scarcity

Driven by demographic shifts, changing worker expectations and new technological demands, talent shortages are creating supply chain bottlenecks, which undermine productivity and efficiency.
Amid workforce shortages, productivity and efficiency can be maintained by automating physical tasks (e.g. using robotics) and decision-making, and then retraining workers to take on high-tech and problem-solving roles.
As supply chains and technologies evolve, it is hard to predict which skills will be needed. Companies should therefore cultivate learning cultures, and train and empower employees to take on new roles.

Evolving technological advances

Embracing rapidly changing technologies tops most agendas, as executives appreciate the benefits and the technologies’ disruptive potential.
The most commonly mentioned disruptive technologies in supply chains are digital twins, AI, decision intelligence systems and advanced robotic systems.
Instead of using technology to incrementally improve ways of working, companies should encourage cultures of experimentation to unleash the power of technology to innovate and master disruptive trends.

Increasing need to support new business models

Companies need to transform to more service-oriented, sustainable and circular supply chain models to be competitive.
New business models require investments in circular-enabled networks, segmented supply chain flows, technologies such as warehouse automation, and financial planning integration.
Transforming business models requires courage. It is a significant step that may undermine earnings and sustainability targets in the short term, but yields long-term benefits such as increased market share and revenue.

Expanding ESG compliance

Companies must comply with ESG regulations, which are growing in scope and complexity, or risk serious financial penalties, exclusion from public contracts and reputational damage.
ESG improvements can be achieved by enhancing upstream transparency, introducing circular network design and incorporating ESG goals into demand and supply planning.
Making a supply chain sustainable from product design to last-mile delivery improves sourcing decisions, conserves energy, cuts waste, boosts sales and creates a positive brand image.

“Continuous disruption is the new normal. Steps must be taken to reinvent entire value chains with adaptability, sustainability and cognition in mind. There are no shortcuts to staying competitive.”

Stefan Schrauf,EMEA Operations Lead at PwC Germany, Global Study Lead

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About the survey

We did quantitative research consisting of interviews conducted between December 2023 and February 2024 with over 1,000 senior executives from companies in 28 countries across EMEA, the Americas and APAC. The majority of survey participants in this quantitative study were senior executives with top-level responsibility in their company for operations and supply chain. Companies were surveyed across six key industry sectors including automotive, electronics, industrial manufacturing and equipment, pharma, medtech, process industries, retail and consumer goods.