Nearly three-quarters of supply chain executives (73%) are planning to transform their operating model within the next 1-3 years. This is driven by a need to enhance agility and flexibility and increase resilience due to a fast-changing environment and persistent global disruptions, according to a new KPMG survey.
“Today, building a resilient, agile, and digitally-enabled supply chain is a business imperative essential for survival and growth. Leaders are no longer only asking, ‘How can we make it cheaper?’ They’re asking, ‘How can we make it stronger, smarter, and safer?” says Chris McCarney, principal, supply chain and operations at KPMG. “Today’s environment requires the right balance across all three to ensure a high-performing supply chain.”
Key takeaways:
· Executives cited "managing and mitigating risks" as the most important transformation objective (51%) and top area for investment (39%) in the near future. This commitment is further evidenced by rising budgets, with most companies now spending 11-15% of their revenue on supply chain, up from 5-10% in 2024.
· 77% of leaders agree there is a significant talent shortage in their procurement and supply chain functions. This deficit is seen as a major impediment to operational excellence, with logistics and transportation costs as the greatest source of value leakage (38%). The talent shortage impacts everything from supply chain visibility (38%) to demand planning (36%). To combat this, 50% of organizations plan to invest in automation and AI.
· Even as organizations invest in digitalization and AI, many report persistent barriers to implementation including technological compatibility, data security, and organizational resistance. However, leaders are proactively addressing these challenges. According to the survey, their top strategies to overcome these hurdles include upgrading or replacing enterprise resource planning systems for better integration (30%), investing in employee training and development (28%), and enhancing data management capabilities (28%).
