Supply Chain Execs Transforming Operations

A majority, 73%, of supply chain executives are planning to transform their operating model within the next one to three years, according to the newly released KPMG U.S. Supply Chain Survey. 

The combination of global disruptions and a fast-changing environment is driving companies to enhance their agility and flexibility as well as increase resilience.

To achieve this, supply change budgets are increasing, with most companies now spending 11-15% of their revenue on supply chain, up from 5-10% in 2024.

In the survey, executives cited "managing and mitigating risks" as the most important transformation objective (51%) and top area for investment (39%) in the near future.

Other supply chain concerns include a critical talent shortage. An overwhelming 77% of leaders agree there is a significant talent shortage in their procurement and supply chain functions.

This deficit is seen as a major impediment to operational excellence, with logistics and transportation costs as the greatest source of value leakage (38%).

The talent shortage impacts everything from supply chain visibility (38%) to demand planning (36%). To combat this, 50% of organizations plan to invest in automation and AI.

“Today, building a resilient, agile, and digitally-enabled supply chain is a business imperative essential for survival and growth. Leaders are no longer only asking, ‘How can we make it cheaper?’ They’re asking, ‘How can we make it stronger, smarter, and safer?' said Chris McCarney, principal, Supply Chain and Operations at KPMG, in a statement. 

One way to address these issues is through investment in AI and digitalization. However, many companies report persistent barriers to implementation, including technological compatibility, data security, and organizational resistance.

The top strategies to overcome these hurdles include upgrading or replacing enterprise resource planning systems for better integration (30%), investing in employee training and development (28%), and enhancing data management capabilities (28%).