Companies’ supply chains – critical functions ensuring resilience and customer satisfaction and competitiveness, and an enabler of strategic opportunities – are continuously evolving and adapting to new challenges and innovations. Dematic, an automation technology provider, surveyed supply chain professionals in Australia to gauge the most pressing challenges being faced by the supply chain sector. The survey results provide valuable insights into the current state of the industry as we embark on a new year.

The survey highlights fulfilment accuracy as the primary concern, making up approximately a quarter of responses. In a time where consumer expectations are sky-high, errors in order fulfilment can significantly impact customer satisfaction and brand reputation. This challenge calls for advanced solutions that streamline picking, packing, and shipping processes, ensuring accuracy and efficiency.

Labour costs and availability - accounting for 20% of responses - reflect a critical issue in Australia today. With a tight labour market over the past few years, the changing workforce demographics and increasing labour costs, supply chain operators are grappling with how to optimise labour efficiency while also reducing expenses. This situation necessitates innovative approaches, such as automation, to reduce reliance on labour, maintaining productivity while managing costs.

Efficient use of space is the key concern for 15% of respondents. As industrial real estate costs continue to rise and land availability, particularly close to customers and suppliers continues to decline, as the variety of products and inventory levels increase, maximising warehouse capacity in a defined footprint becomes crucial. Implementing scalable high-density storage solutions can address this challenge, ensuring that every square metre is utilised effectively.

Mirroring global economic trends, 15% of participants identified overall rising costs as a significant challenge. This includes everything from energy prices to material costs, impacting profitability. Adopting cost-saving technologies and optimising warehouse processes can help mitigate these financial pressures.

The expansion of product ranges, as pointed out by 10% of respondents, poses unique challenges in inventory management, demand forecasting and flexibility requirements. Supply chain operators need to adopt agile, flexible, and scalable solutions that can accommodate a growing and diversifying inventory.

With 10% of the feedback, sustainability features are an essential consideration for Australian supply chains. The increasing focus on environmental impact necessitates the adoption of green logistics practices, from eco-friendly packaging to energy-efficient operations, such as lowering a distribution centre’s (DC’s) energy use through automation, powering warehouses with solar or optimising transport & logistics (T&L) routes for less fuel use and emissions.

Although only it represents around 5% of the concerns, the need for rapid delivery cannot be overlooked. In the age of instant gratification, the ability to deliver quickly is a competitive advantage. Integrating advanced supply chain technology, locating systems close to customers and optimising delivery routes are key strategies to address this challenge.

The survey conducted by Dematic of Australian supply chain operators clearly outlines the diverse and complex challenges facing the sector this year. From enhancing fulfilment accuracy to addressing sustainability, each challenge demands strategic and innovative solutions. Dematic, with its market- and customer-focused approach to solution and product innovation, its flexible, scalable cutting-edge automation technologies, and its unmatched local consulting, solution development, project implementation and service capabilities, can support local companies in addressing these challenges and enable their supply chains to deliver the competitive edge in this ever-evolving landscape.