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Digitisation is the key to resilient supply chains

Digitisation is the key to resilient supply chains

by Ben Lannan, John Cunningham, Stephanie Males, Matt Kuperholz and Gary Dutton

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There’s nothing like a global shortage of life-saving ventilators during a pandemic to put supply chains in the spotlight. The COVID-19 crisis has had a profound impact on international supply chains – the process by which raw materials, parts and components are drawn from around the globe to produce and distribute finished goods. From diversions and delays in production and logistics, through to loss of trust in global networks, supply chains have been well and truly tested.

The result? Supply chain resilience is more critical than ever, and the key to resilience is digitisation.

COVID-19: No vaccination against risk

There’s a misconception that supply risk can be eliminated via reconfiguration. It’s true that international supply chains can be long, complex and opaque. And organisations can manage vulnerability by bringing elements of the supply chain closer to home, via onshoring and nearshoring, to ensure greater control over supply chain variables.

But it’s impossible to remove risk altogether, and if COVID-19 has taught us anything it’s that future disruptions are inevitable. Moreover, global integration of supply will continue in some form, even if there is a push towards a post-global supply model right now.

The answer, then, lies in making your supply chain resilient.

Building resilience into the supply chain offers an opportunity to improve supply risk governance. Successful and resilient supply chains anticipate disruption, and can adjust and continue to operate in a crisis. They include:

  • Rapid progression of technology enablement
  • Recognition of challenges and opportunities in real time and rapid adaptation
  • Partnering with suppliers and customers to identify and resolve issues quickly to minimise risk and business impacts
  • An operating model that allows for next level connectivity and autonomy.

Resilience: Much more than continuity of supply

Embedding resilience into your supply chain means so much more than achieving durability and continuity of supply. Supply chain resilience creates a platform for innovation. Done right, it can boost productivity and transform markets. In short: resilience makes economic sense.

PwC’s Connected and autonomous supply chain ecosystems 2025 found that Digital Champions (that is, those organisations that have developed digital capabilities to transform their linear supply chains into ecosystems) achieved savings of 6.8 per cent annually in supply chain costs, along with a 7.7 per cent revenue increase.

Digitised businesses have the opportunity to:

  • Identify and test pressure points, and then adapt and/or pivot in response
  • Look at new and more efficient (preferably local) sourcing options
  • Seek better visibility and achieve end-to-end transparency in the supply chain
  • Increase efficiency and optimise performance powered by analytics
  • Transform and digitise, especially by automating decision-making 
  • Share and leverage data for mutual benefit
  • Review the carbon footprint of existing supply chains, and elevate corporate social responsibility as a key priority within your network.

Digitisation

Using digitisation to make networks more transparent and more autonomous means the supply chain operates as a connected and self-orchestrating ecosystem. 

When helping clients find untapped value in their supply chains, we’ve seen many organisations that have very limited visibility of their end-to-end supply chain. While historic vendor due diligence and contracting offer some insights into the origins of purchases, it’s generally the case that A knows very little about B’s manufacturing processes when sourcing from B, let alone C, D, or E’s processes as suppliers and external service providers to B. 

As we’ve seen so spectacularly in 2020, a lack of visibility leaves organisations vulnerable to shortages and lost business opportunities, with many companies forced to resort to expensive last-minute arrangements, or to stockpiling inventory, in order to meet demand.

It’s fundamental, then, that you connect the participants in your supply chain. Know your suppliers. Know your suppliers’ suppliers. And then use this information to mitigate risk. 

PwC’s Know Your Vendor monitoring solution, for instance, uses an analytics-based approach to perform due diligence on vendor networks to give risk visualisation tools. And there’s so much you can do with this information – from forecast planning to automation. In fact, visibility may end up being the lowest-value use of your data when compared to what connected data can do throughout your supply ecosystem. 

The final piece in the puzzle, then, is to securely share information between stakeholders. This will create a truly interconnected ecosystem, and drive productivity and innovation. For this to work, incentivising data sharing is critical. You’ll need to foster trust between stakeholders, as well as to provide a system that’s fair and easy to use, in order to get stakeholder buy-in. 

Achieve this and the pay-offs, in terms of value, are exponential. Different stakeholders will be able to create specific and relevant value from the same connected data, depending on where they sit in the supply ecosystem.

Ultimately autonomous

Supply chains will ultimately become autonomous. It’s already possible, via AI and smart logistics, for supply chain decisions to be made without human intervention. Create a digital twin, or virtual replica of your supply chain ecosystem and you can run simulations of the downstream and upstream impacts of a disruption, and then use these to ‘correct’ automatically. PwC’s Connected and autonomous supply chain ecosystems 2025 shows nearly half (47 per cent) of Digital Champions implementing transparency are already able to use a digital twin of their supply chain.

And the benefits flow all the way through to the customer. Transparency in your supply chain ecosystem lets a customer understand, in real time, when a disruption is occurring. At the same time, autonomy enables elements of your ecosystem to adapt and respond, while a digital twin gives the customer advance warning of the outcome. All of which goes a long way to rebuilding trust in fragmented, globally integrated supply chains.

Contact us

Ben Lannan

Partner, PwC Australia

Tel: +61 (3) 8603 2067

John Cunningham

Managing Director, PwC Australia

Tel: +61 2 8266 4724

Stephanie Males

Partner, Integrated Infrastructure, ACT Leader, Canberra Managing Partner & Global Trade Lead, PwC Australia

Tel: +61 (2) 6271 3414

Prof. Matt Kuperholz

Partner, Chief Data Scientist, PwC Australia

Tel: +61 (3) 8603 1274

Oliver Sargent

Partner, PwC Australia

Tel: 612 8266 0461

Gary Dutton

Partner, National Trade Leader, PwC Australia

Tel: +61 434 182 652

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