The State of Supply Chain Management

Overview

The State of Supply Chain Management report measures the current status of Australian enterprise supply chains. It provides an analysis of the situation within the supply chain industry in Australia and New Zealand, as a result of the quantitative analysis carried out on the basis of survey responses. Year on year, this report aims to demonstrate the role of supply chain within the organisational structure and the overall business operations across these countries. While data is acquired locally, the results are part of a global conversation.

In the 21st century, it is not companies that compete but their global supply chains. The report provides an understanding of the maturity across eight components of supply chain management (SCM):

1. Collaboration
2. Technology and Automation
3. Integration
4. Compliance and Regulation
5. Logistics and Distribution
6. Risk Management
7. Sustainability
8. Procurement.
   

Findings highlights

1.    Collaboration

• 67% respondents effective collaboration with different departments within the organisation  which plays a key role in reducing costs, improving customer service, and increasing supply chain performance
• 40% respondents share knowledge and expertise with other businesses
• 63% of respondents collaborate with consumers.
  

2.    Technology and Automation

• greatest impact from technology will be on improving productivity 69%
• 38% of respondents have a full digitisation strategy in place
• cloud based technologies are top of technology list, 37% respondents have already implemented them, with 12% in progress
• one of biggest concerns for organisations is cyber security and risk of hacking 45%.
  

3.    Integration

• 28% respondents report a seamless flow of information from suppliers to customers
• organisations use analytics 42% of the time to maximise the value of information
• increase in customer expectations and tougher competition is also leading to a higher overall quality of products and services 41%
• key barriers to achieving supply chain integration include running multiple independent information systems 38%, lack of willingness to invest in improvements 38%, lack of information sharing 33%.
  

4.    Compliance and Regulation

• a little over half of the respondents understand that their organisations fully adhere to compliance and regulations, health and safety regulations 54% main concern
• ensuring goods are delivered to customers expectations 33%, are second
• environmental regulations 30%, are third
• collecting information from suppliers is paramount to minimise risk, only half of respondents have a requirement to collect information from suppliers regarding materials content 56%, materials origin 47%.
  

5.    Logistics and Distribution

• outsourcing logistics and distribution continue, to find best 3PL/4PL match for their needs 75% respondents indicated good customer service as top priority
• guaranteed delivery date and time 50%, low costs 50%, product tracking and visibility 44% are also important factors
• 3PL/4PL providers should assist in transforming supply chains in sharing their experience 44%, providing real-time data and analytics 41% and improving communication and collaboration 39%.
  

6.    Risk Management

• 46% of organisations have a risk management plan in place
• poor decision-making has greatest potential to create outsourcing risks 47%, and may affect network planning and optimisation 37%
• 50% respondents stated change in market is the main supply chain disruption factors
• tools to map and mitigate risks, 36% across business continuity plans, industry bench marketing and implementation of risk management programs.
  

7.    Sustainability

• 62% respondents perform sustainability audits and about half have a sustainability strategy for supply chain
• 30% consider sustainability to be extremely important
• sustainability effort is driven mainly by corporate policy 67
• most important aspects of a sustainable supply chain, health and safety in workplace 63%, ethics 46%, environmental impacts 38%, and financial management 33%, highlighting people are at the forefront, followed by planet then profit.
  

8.    Procurement

• more organisation reported relying considerably on international markets for sourcing goods and services 74%
• 28% outsource procurement processes, 50% of that go to the domestic market
• working with domestic markets will typically result in faster delivery times 29% and reduced costs
• opportunities arose with COVID from other markets to expand supply chain, other than China and is now behind other countries.

Conclusion

COVID-19 accelerated structural changes in most supply chains. Where disruption was king, organisations in collaborative ecosystems thrived, defining new ways to carry on with procurement.  Technology and automation transformed how we work, as distance ceased to be an obstacle for remote control centres and home offices. Integration enabled flexibility and quick responses to a fluid environment, an important ally to risk management. Compliance and regulation increased as organisations adapted their logistics and distribution to ever-shifting restrictions, often reviewing processes on a weekly basis. And while sustainability was initially eclipsed by the pandemic, it emerges as the next big thing.


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Research investigators:
A/Prof Flavio Macau RegPracOps
Dr Reza Mavi
Dawoon Joo
Nayda Cerjov

For further information about this research study, please contact: enquiries@asci.org.au