Digital supply chains in consumer markets: PwC

Supply chain upheavals are among the top three disruptors cited by CEOs at consumer-facing companies — along with changing customer preferences and a talent deficit.

Little surprise then that efficient, cost-effective supply chains rank among the top three priorities for consumer markets (CM) executives: 69% cite improving efficiency (vs 58% for all sectors) and 65% cite managing costs (vs 54%).

1. High expectations for digital supply chains

More than 40% of consumers said they plan to increase online shopping in 2023. And they are increasingly demanding that their overall shopping experiences — whether physical or digital — be enhanced by technology. They would like to browse, shop and return products using a combination of digital and physical channels.

In response, CM executives are investing in digitizing their supply chains to deliver for their customers. Far more than their counterparts in other sectors, they are seeking to drive growth (63% vs 53%), optimize costs (59% vs 51%), improve customer service (51% vs 40%) and gain competitive advantage (45% vs 38%).

Why digitize your supply chain?

CM

All industries

Drive growth

%

Optimize costs

%

Improve customer service

%

Gain competitive advantage

%

Note: Highest ranked choices from a list of 9 options.
Q: Which of the following are among your top 3 objectives when investing in technology for your supply chain?
Source: PwC’s 2023 Digital Trends in Supply Chain Survey; base of 903, CM base of 151

2. Supply chain digitization gains traction

Supply chain management now requires advanced planning processes such as analytical demand planning or integrated sales and operations planning. Technologies deployed at the point-of-sale, in warehouses, production facilities and logistics hubs should integrate with each other and with financial and reporting systems. It’s a tall order.

Impressively, the share of CM companies that report implementing specific supply chain technologies has doubled or nearly doubled in just the past year. Having caught up, CM companies now more closely mirror other sectors in planned tech investments over the coming year.

Bridging the tech gap since 2022

CM 2022

CM 2023

All industries

IoT

%

Cloud-based common data platform

%

Scan and intelligent data capture

%

Third-party spend analytics tool

%

AI and machine learning

%

Blockchain

%

RFID

%

Robotic process automation

%

Augmented reality

%

Drones

%

Q: To what extent have the following technologies been adopted by and/or applied within your supply chain operations?
Source: PwC’s 2023 Digital Trends in Supply Chain Survey; base of 1,768, CM base of 281 (2023), CM base of 60 (2022)

3. A digitally skilled workforce is essential

Investing in technology is one part of the equation for digitizing a company’s supply chain; attracting and managing a workforce with digital skills is also essential. In fact, talent management has taken on increased importance, particularly in CM companies, given the high level of turnover they continue to experience.

Only 25% of CM executives, for example, strongly agree that their workforce has the skills to ensure supply chain resiliency and only 22% strongly agree that they possess the skills to identify risk. In response, 76% of companies expect that some degree of staff training or upskilling in digital technologies may be needed.

Upskilling employees to meet the moment

CM

All industries

We anticipate some level of upskilling

%

We anticipate the need for significant training and upskilling on digital skills

%

We anticipate the need for minor to moderate training and upskilling of employees

%

Note: Highest ranked choices from a list of 7 options.
Q: In which of the following ways do you expect your workforce to change due to the digitization of your supply chain?
Source: PwC’s 2023 Digital Trends in Supply Chain Survey; base of 305, CM base of 51

4. A digital supply chain contributes to sustainability

The overwhelming majority of CM executives — 90% — told us a robust supply chain is an essential component of their overall sustainability strategy. Just as many say they are transparent with customers about how their supply chain and their suppliers are helping them meet sustainability goals.

Over the past year alone, CM executives have made tangible progress. Several key sustainability areas have become less of a challenge to manage, including:

Adequately addressing stakeholder groups: 35% (2023) vs 62% (2022)
Identifying sustainability-related supplier risks: 47% vs 63%
Prioritizing minority-owned, diverse suppliers: 39% vs 58%

CM executives are also better able to measure the impact of their supply chain sustainability investments (88%) than counterparts in other industries (82%). While they’ve definitely made progress, some sustainability-related challenges do remain.

Challenges to building a sustainable digital supply chain

CM

All industries

Establishing effective oversight and audit protocols

%

Coordinating sustainability investments across the company instead of separate spending by individual groups

%

Defining process and governance steps to have confidence in sustainability-related reporting

%

Deciding on a sustainability framework and key metrics

%

Identifying sustainability-related supplier risks

%

Staying aware of rapidly evolving legislative and regulatory frameworks in relevant jurisdictions

%

Prioritizing minority-owned, diverse suppliers

%

Adequately addressing stakeholder groups in sustainability reporting

%

Q: To what extent do the following sustainability-related issues pose a challenge to your supply chain function?
Source: PwC’s 2023 Digital Trends in Supply Chain Survey; base of 1,305, CM base of 190

5. Risk forecasting helps manage the fallout from economic, geopolitical upheaval

In the wake of the economic and geopolitical fallout of the last few years, CM executives are acutely aware of the need to manage supply chain risk: 80% report that they have the necessary processes and systems in place to do so. And 82% say technology investments have enabled faster response times to reduce risk.

Regardless, 84% believe they should invest more in technologies that identify, measure and track supply chain risk — in areas such as AI and machine learning; real time IoT sensors; and scan and intelligent data capture.

Also of note, CM executives are investing in planning and forecasting solutions more than executives in other industries (65% vs 53%). This could explain their confidence in their ability to identify current risks, which only 8% say is a major concern compared to 16% across all industries.

Managing risk is top priority for CM companies

CM

All industries

Planning or forecasting solutions

%

Scan and intelligent data capture

%

AI and machine learning

%

Blockchain

%

IoT (e.g., real time sensors)

%

Note: Highest ranked choices from a list of 11m options.
Q: What technologies are you investing in to manage supply chain risks?
Source: PwC’s 2023 Digital Trends in Supply Chain Survey; base of 305, CM base of 51

Connecting the possible with the practical

A digital supply chain can become part of a company’s growth engine by providing the level of service today’s customers demand — reliably and cost-effectively.

Investing in the right supply chain technologies can help CM executives make faster real-time decisions to bolster operational resiliency and manage risk.

Such technologies can also support efforts to track and accelerate progress toward greater sustainability. Ultimately, a digital supply chain allows you to connect what’s possible with what’s practical.