Australian supply chains are lagging behind global standards and those of the regional neighbours, according to an analysis by consulting company KPMG.
“With insufficient investment in Australian supply chains, they remain highly manual and inefficient,” Peter Liddell, KPMG Global Head of Supply Chain said.
“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.”
Mr. Liddell said that Australian businesses must boost their investments in supply chains or risk being left behind.
According to KPMG’s survey, 94 percent of global businesses said they are optimistic that the use of digital twins will add value to supply chain planning. A digital twin is a digital model of a physical object to help in stimulations and testing.
A total of 37 percent claimed they are already using automation or robotics, while 39 percent said they are planning to invest in digital technology to strengthen data synthesis and analysis.
In addition, 63 percent said they believe that automation will replace many repetitive tasks humans do, while 87 percent think improved visibility of suppliers is of high importance.
Around 47 percent of global businesses consider themselves vulnerable to disruption with macro factors causing the largest disruption impacts.
“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,” Mr. Liddell said.
“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.”
Supply Disruptions in Australia Worsened
Earlier, the Australian Industry (Ai) Group stated in its CEO Survey for 2023 that supply disruptions in Australia worsened in 2022.According to the survey, 79 percent of Australian businesses reported supply chain disruptions in 2022, up from 65 percent in the previous year.
The manufacturing sector was the hardest hit, with 88 percent of manufacturing businesses reporting they were affected by supply disruptions. A total of 79 percent of services businesses also suffered disruptions.
The survey identified the five global drivers of supply chain disruptions since the pandemic namely interruptions to domestic connectivity; interruptions to international connectivity; rising protectionism; geopolitical shocks; and Beijing’s COVID-zero policies.
The survey said that 88 percent of Australian businesses will invest in supply chain resilience in 2023, while nearly 25 percent said they intend to change their product offerings due to persistent supply chain disruptions.
“Business leaders also contended with a new set of ’supply-side' challenges, as rampant inflation, chronic labour shortages and supply chain disruptions weighed heavily on performance. Business leaders report declining margins due to these supply-side pressures,” Ai Group CEO Innes Willox said.
Along with addressing supply chain disruptions, businesses will also prioritise addressing the tight labour force and continuing inflationary pressures.
“In an environment of skills and labour shortages, investment in broader workforce strategies, reaching beyond human resource strategies to operational changes is a necessary response,” Mr. Willox said.
“They will also help future-proof Australian business, and the national economy, for the major global economic uncertainty and challenges of the mid-2020s.”
