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Friday, October 13, 2023

Australian SMEs urged to boost supply chain investment

A new report by KPMG underscores the imperative for Australian businesses to increase their investments in the supply chain workforce, environmental, social, and governance (ESG) commitments, and advanced technologies like AI to stay competitive in the global market.

While Australian supply chains have focused on resilience after years of disruption, global counterparts have surged ahead in adopting automation and AI across their supply chains.

Vulnerability to Disruption Persists: Nearly half of businesses worldwide, accounting for 47 percent, continue to express concerns about their susceptibility to disruption. Notably, disruptions stemming from macro-level factors have had the most significant impacts.

Emphasis on Enhanced Supplier Visibility: An overwhelming majority of global businesses, specifically 87 percent, consider improved visibility of their suppliers as a vital priority. Surprisingly, 43 percent admit to having uncertainties regarding their supplier performance, underscoring the need for greater transparency and insight.

Positive Outlook for Technology Investments: The survey reflects an optimistic outlook on technology investments in supply chain management. A remarkable 94 percent of respondents anticipate that digital twins will bring added value to their supply chain planning efforts. As of now, 37 percent have already incorporated automation or robotics into their supply chain operations. Furthermore, 39 percent have intentions to invest in digital technology to fortify data synthesis and analysis capabilities, showcasing a commitment to modernization and technological advancement.

Peter Liddell, KPMG Global Head of Supply Chain, emphasizes that Australian businesses must keep pace with global advancements, particularly in technology and ESG priorities. Liddell notes that while the adoption of advanced automation and AI is still in its early stages in Australia, these technologies offer substantial efficiency gains and will shape future supply chain roles. Automation is already replacing manual labor in warehousing for 37% of survey respondents, and over half of the companies surveyed plan to invest in advanced robotics for their supply chains, with 59% anticipating automation for high-risk manual tasks.

Australian Supply Chains – risk and opportunities

Despite a skilled workforce and reasonably good infrastructure in the domestic transportation and logistics sector, Australian supply chains lag behind global and regional standards. Liddell emphasizes that insufficient investment has left Australian supply chains manual and less efficient compared to global leaders, resulting in slower and less agile processes that are more costly than those of international competitors.

Liddell also highlights the growing significance of ESG considerations in supply chains. ESG is no longer a “nice to have” but a “must-have,” and it is integral to the corporate ESG strategy. The report calls on Australian businesses to analyze, prioritize, and invest in their supply chains to remain competitive and suggests keeping a close eye on product innovation and emerging supply chain technologies.

In the years to come, the collaboration between humans and automation will be a key focus, redirecting human efforts toward creative and innovative tasks that enhance the potential of the supply chain. Liddell concludes by emphasizing the urgency for businesses to invest and become “future-ready,” as the greatest risk to Australian supply chains is inaction.

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Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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