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Tech investment crucial to navigate anticipated challenges

GetApp found that 59 per cent of Australian businesses say advanced cybersecurity is crucial to success. Image: Shutterstock

The latest international survey by software recommendation site GetApp reveals that economic pressures, supplier location, and cybersecurity threats are plaguing global supply chains, particularly within small to midsize enterprises (SMEs).

GetApp’s Supply Chain Plans Survey of 1100 supply chain management (SCM) leaders across Australia, the U.S., Germany, France and the U.K. reveals critical issues currently impacting SMEs and how they’re building supply chain resilience in these challenges.

Insight from industry leaders reports on the following market trends affecting supply chains, providing SMEs with a guide to navigate anticipated challenges:

1. Conduct a risk assessment to follow mitigation strategies

Nearly half (49 per cent) of Australian SMEs cited inflation as their top concern, slightly above the international average of 45 per cent. With inflation affecting procurement, 43 per cent said that product availability issues were the most significant procurement challenge they have faced in the last six months, followed by product quality issues (35 per cent) and delays in procurement (32 per cent).

2. Evaluate supplier locations and consider local options

Australia’s location is a potential challenge, so 61 per cent of SMEs continue switching to suppliers in or near Australia, and 20 per cent are starting to do so. Forty-five per cent of SMEs in Australia say most of their suppliers are currently nearby, and a further 27 per cent say all of theirs are within proximity, second only to the U.S. (36 per cent). Overall, 39 per cent of Australian businesses plan to have all suppliers in or near Australia in 2024.

3. Invest in software solutions to improve operations

The research shows that adopting software can assist with specific areas of supply chain operations. Over a third (37 per cent) of Australian companies plan to continue adopting new SCM software, and 30 per cent plan to start this year. Only 36 per cent of Australian companies plan to allocate more than five per cent of their budget to supply chain technology, compared to 48 per cent of the international average.

To measure the success of tech investments, 59 per cent of respondents said they use customer satisfaction, 44 per cent say they compare cost reductions, 41per cent say logistics key performance indicators (KPIs) are used, and 41 per cent say they measure employee satisfaction.

4. Analyse how potential cyberattacks can impact the supply chain

GetApp found that 59 per cent of Australian businesses say advanced cybersecurity is crucial to success. This year, 47 per cent of companies plan to maintain or increase spending on advanced cybersecurity, followed by advanced data analytics (46 per cent) and artificial intelligence (39 per cent).

Notably, nearly a quarter (22 per cent) of Australian respondents expect cybersecurity disruptions to be a top supply chain challenge in 2024, with potential cyberattacks cited as a top concern for 72 per cent of Australian SMEs. In the past 12 months, over a third (35 per cent) of Australian companies have experienced disruptions due to a cyberattack.

5. Monitor supply chains to pre-empt disruptions

Businesses must aim to manage supply chain disruption occurrences to reduce their impact on business operations. Supply chain management software helps strategically pre-empt disruptions, plan accordingly to mitigate their effects, and manage supplier relationships.

For more information on GetApp, click here

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