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Technology in supply chains: Transformation still elusive for some companies
Insights from PwC’s 2023 Digital Trends in Supply Chain Survey
While operations leaders, supply chain officers, C-suite executives and others say their companies are using technology to improve supply chains in this digital age, transformative actions continue to compete with more traditional priorities.
PwC’s 2023 Digital Trends in Supply Chain Survey found that while companies are investing in different technologies, their aim is often to address the bottom line in the near term. It’s less evident how their digital investments factor into long-term business strategies. For instance, more than half of respondents (51%) said optimizing costs was a top objective when investing in technology for their supply chains. But less than one-third (30%) cited exploring new innovations and only 16% said implementing a different business model — the sixth and eighth most common responses, respectively, out of nine options.
As supply chains have experienced various shocks in recent years, the focus on keeping operations moving is understandable. But our survey also revealed multiple technology investment opportunities across many industries to improve your supply chain tool kit.
How companies are using technology in supply chains
How tech investments have — and haven’t — delivered so far
Similar to last year’s survey, a substantial majority of respondents said their investments in supply chain technology haven’t fully delivered expected results. Reasons range from implementation still being in progress to undefined ownership and vision. But these findings shouldn’t be interpreted to mean that technology investments are incapable of delivering results. Rather, we’ve found that companies often commit to investing without setting specific business objectives for those investments up front.
From hardware to humans, challenges in digitizing supply chains
While budget constraints were most often cited as the top challenge to digitizing supply chains, survey respondents also named other tech-related issues — not so much technologies themselves but how companies are implementing them. This highlights the need for organizations to invest in training and process changes as well as tech to be successful.
Most go with what they know when planning tech investments
As companies seek to increase digital capabilities, survey respondents report varying adoption rates for different technologies in their supply chains. In addition, planned investments appear largely aligned with past adoption and application of technologies. Given the moves by many companies with large enterprise resource planning and enterprise asset management systems, it’s not surprising that a cloud-based common data platform is top for both limited or full adoption (84%) and any level of planned investment (91%).
Responses vary by industry. AI and machine learning, for instance, have seen much higher rates of adoption and planned investment in supply chain operations for the technology, media and telecommunications sectors than other sectors. Meanwhile, energy, utilities and resources companies have adopted and are investing in drones more than other sectors.
Where you go from here
Is your company ready to be smarter in applying technology effectively at different points of the supply chain? Consider these actions as potential next steps.
- Reset your tech enablement strategy. After the chaos of the past few years, assess how your customer expectations are evolving and affecting supply chain demands. Look for technologies that can better position your supply chain to meet those expectations.
- Determine your digital manufacturing path. With increased efforts to encourage more US industrial production, collaboration around information technology and operating technology is critical to enabling digital manufacturing and adapting supply chains to new demands.
- Prioritize your people. You shouldn’t see reskilling and upskilling employees and hiring digital-savvy talent as needs without making them a primary goal for your supply chain, but that’s what our survey found. Don’t look at training or hiring as binary, but rather crystallize how your business strategy helps employees adapt to new ways of working and better prepares them to execute on strategic goals, not just day-to-day operations.
- Identify blindspots. Many companies are evolving their portfolios in ways that drive net-new capability requirements. The rise of connected products is one example, and you should anticipate how the demands of these developments will ripple through supply chains.
- Go beyond data and focus on data quality. The potential power of data in operations is well known. But without strong data governance and a culture of constant data quality improvement, your supply chain can slip into a garbage-in-garbage-out situation that hampers the adoption of and perceptions of digitization and — ultimately — your returns.
Explore more 2023 survey insights
Supply chain digitization in manufacturing
Supply chain digitization in consumer markets
Supply chain digitization in energy, utilities and resources
Supply chain sustainability in energy, utilities and resources
Supply chain digitization in health, pharma and life sciences
Supply chain digitization in tech companies
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