Supply chain transformation urgently needed to meet disruptive trends, PwC study finds

A global study by PwC reveals that companies struggle to keep pace with the rapid transformation required in their supply chains to address ongoing disruptions and emerging trends

Integrating AI and robotics is crucial for building ‘thinking’ systems that learn and evolve

The ‘Reinventing Supply Chains 2030’ report surveyed over 1,000 supply chain executives worldwide, including in Ireland. It paints a picture of an industry grappling with geopolitical crises, climate change and technological advancements.

The study found that only 8% of industry leaders, dubbed “supply chain champions”, have fully transformed their supply chains to meet disruptive trends. This leaves the vast majority of companies vulnerable to the increasing frequency of severe supply chain disruptions expected between now and 2030, with 46% of respondents anticipating such challenges.

Áine Brassil, Supply Chain and Operations Transformation Partner at PwC, emphasised the urgency of the situation. “The report highlights that the pace of transformation of supply chains to manage the onslaught of future disruptions needs to quicken. Market turbulence will continue to impact supply chain performance, requiring serious interventions to avoid operational downtime, higher costs and loss of revenue.”

Áine Brassil, Supply Chain and Operations Transformation Partner at PwC

The study identified several key areas where companies are falling short:

• ESG compliance: more than 40% of surveyed companies recognise that making their supply chains more ESG-compliant is highly disruptive now and in the future. However, only 12% of companies reported that their supply chains had been fully remodelled to be ESG compliant, compared to 63% for the supply chain champions.

• Technological adaptation: just 4% of companies have fully adapted their supply chains for evolving technological advances, while 27% of supply chain champions have done so. Integrating AI and robotics is crucial for building ‘thinking’ systems that learn and evolve.

Talent scarcity: a quarter of respondents believe severe talent and workforce scarcity will increasingly disrupt supply chains by 2030. This is particularly relevant in Ireland, where companies struggle to find warehousing and transportation staff.

Regionalisation: four in ten global companies have initiatives underway to regionalise their supply chains, and 83% of supply chain champions consider it crucial to relocate supply chains to manage future disruption.

Despite these challenges, the study reveals significant opportunities for companies that transform their supply chains successfully. Supply chain champions expect cost reductions of 19% and revenue increases of 16% as a result of their transformation efforts.

Mark McKeever, Director of Procurement & Supply Chain Practice at PwC, noted: “In Ireland, with our proximity to US and European markets together with our strong foreign direct investment ecosystem, there is a clear opportunity from a developing trend of companies looking to nearshore elements of their supply chain activities. A key enabler, of course, will be to ensure that Ireland has the appropriate infrastructure to make this happen.”

Mark McKeever, Director of Procurement & Supply Chain Practice at PwC

The study also highlighted the positive long-term impact of artificial intelligence (AI) on supply chains. Sixty-five per cent of supply chain champions said that AI is already having a significant impact, with the technology used in supply chain planning, logistics, order management and risk management to anticipate disruptions and respond quickly.

However, the transformation process is complex and requires a comprehensive approach. As McKeever explained, “Supply chain transformation is a complex challenge that must happen alongside daily business operations. Consequently, supply chain managers often make only minor adjustments. However, marginal quality or service improvements are insufficient — a more comprehensive approach is required.”

PwC’s study emphasises that continuous disruptions are the “new normal” and that companies must rethink their supply chains completely. Adaptability, sustainability and a new cognitive ecosystem are key components of this transformation.

To succeed, companies need to focus on several critical areas:

• Developing end-to-end, integrated approaches that require advanced skills, technologies and new ways of working.

• Creating a clear vision and roadmap with adequate resource capacities and employee commitment.

• Implementing ESG-driven circular network design and ESG supply chain planning.

• Automating tasks and reskilling workers to address talent shortages.

• Increasing supply chain-wide visibility and transparency to ensure ESG compliance.

As global supply chains face the largest overhaul in decades, the message is clear: companies must act now to transform their supply chains or risk falling behind. Those who successfully navigate this transformation will mitigate risks and gain a significant competitive advantage in an increasingly complex and volatile business environment.

To learn more about PwC’s Reinventing Supply Chains 2030 Survey, visit www.pwc.ie/supplychains-2030