Supply chains are undergoing their biggest metamorphosis in decades. This is according to more than 1,000 supply chain leaders, as part of a PwC global study.
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. Leaders say they are boosting transparency, embedding technologies like artificial intelligence (AI) and robotics to increase efficiencies, and connecting all stakeholders to spot and solve problems.
Let's dive into the major trends reshaping supply chains, look at the top technologies being used to transform them and explore what sets supply chain ‘champions’ apart.
Six disruptive trends
- Increasing frequency of disruptions: Geopolitical, trade and energy crises, extreme weather, price hikes, inflation and infrastructure failures are severely impacting labour, transport and raw material costs, among others.
- Expanding ESG compliance: A significant wave of ESG requirements is forcing companies to behave more sustainably and transparently. Even smaller companies and their entire supply chains are required to comply or face serious financial penalties, exclusion from public contracts and reputational damage. Australia just passed legislation for mandatory sustainability reporting, effective from 2025.
- Evolving technological advances: Rapid technological changes are both a disruption and a solution. Technologies are enhancing data visibility, automating manual work, processes and decision-making, and improving communication and collaboration across entire value chains.
- Rising competition of integrated ecosystems: 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.
- Increasing need to support new business models: Supply chain models are evolving to be more service-oriented, sustainable and circular to meet shifting consumer demands.
- Growing talent shortages and workforce scarcity: With millions of jobs unfilled and technological advances altering job requirements, companies are facing productivity and efficiency issues that impact their growth and competitive edge.
Top technologies being used to transform supply chains
The rapid pace of technological change is significantly disrupting supply chains, while at the same time offering new opportunities. Organisations are embedding technologies to boost data visibility, automate processes and decision-making, improve communications and collaboration, and ultimately make value chains more sustainable and resilient. Four technologies top participants’ list as the most transformative:
Digital twins
These interactive virtual replicas of physical objects, systems and processes, monitor supply chains and logistics and can optimise entire supply chain networks. 56% of companies say digital twin solutions will have an immediate impact on their supply chains; 37% of companies that have fully adapted their supply chains technologically use digital twins in supply chain planning.
Artificial intelligence
AI identifies patterns in disconnected data across complex global supply chains to make decisions using real-time data and simulate future outcomes. Champions are using AI in supply chain planning and inventory optimisation, logistics planning and execution, order management and risk identification/ simulation to foresee and react quickly to disruption. 80% of companies think AI will have a positive long-term impact on their supply chains.
Decision intelligence systems
Harnessing the power of AI and machine learning, visualised data and collaboration technologies, decision intelligence systems provide insights and recommendations to improve, and potentially automate, decision-making. This technology is essential to efficiently participating in ecosystems, identifying trade-offs between costs and sustainability goals, and simulating how different supply chain configurations might impact carbon emissions.
- Advanced robotic systems
To improve efficiency – and combat worker shortages – companies are automating repetitive and physically-demanding activities associated with shopfloors, warehousing and delivery. Automating processes reduces human intervention and manual errors, increases efficiency and streamlines processes, while freeing up staff for more complex tasks.
What sets Supply Chain 'champions' apart?
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%.
Get in touch if you would like to find out how we can help you ensure long-term success in the evolving supply chain landscape: Oliver.Sargent@au.pwc.com , Gynam.Sadananda@au.pwc.com or Ben.Cleary@au.pwc.com
Read the full global report
