There are gaps between opportunity and reality when it comes to companies protecting themselves against future supply chain disruptions, according to the PwC Digital Trends in Supply Chain Survey 2022.
Overall, PwC found that companies are acting in a short-sighted way by focusing on supply chain basics, like increasing efficiency (63%) and managing/reducing costs (59%). Meanwhile, “they’re missing value creation in digitization, sustainability, and transformation.”
While companies see many supplier attributes as significant risks, only a small minority are prioritizing changes in the next 12 to 18 months that would mitigate those risks, such as increasing responsiveness and resilience (10%), transforming procurement practices and operating model (4%), and increasing diversity and segment suppliers (3%).
The biggest impediments to forward-looking initiatives are:
- Budget constraints – 48% of respondents cite budget constraints as the biggest concern in digitizing supply chains
- Workforce shortages – 44% said worker shortages and employee turnover will be one of their biggest operations challenges this year
There is also a disconnect between what companies need to be doing in terms of ESG (environmental, social, and governance) to succeed in the future and their current priorities.
Given the waves of disruptions that have hit supply chains over the past two years, it’s perhaps not surprising that companies are focused on the short-term. However, PwC notes that “as important as it is to win day-to-day battles, companies also need to take advantage of opportunities…that can help improve their chances for long-term success.”