PwC India Survey: Supply Chain Gaps Hindering Growth in Indian Businesses, Tech & Skills Lagging

A recent survey by PwC India, covering 156 senior executives across manufacturing, retail, pharma, infrastructure, and energy sectors, highlights a significant underutilization of supply chains in strategic decision-making within Indian organizations.

Despite their crucial role in driving profitability and customer experience, supply chains are hampered by technology infrastructure gaps and capability challenges, preventing them from acting as strategic growth engines. The survey found that 32% of business leaders admit their supply chains are not yet integrated into board-level strategic discussions. Furthermore, only 16% of organizations feel well-prepared to handle large-scale supply chain disruptions.

Technology infrastructure gaps were identified as the primary obstacle, reported by 76% of respondents. This was followed by capability challenges (61%) and siloed working environments (53%). Even with increasing investments in digital transformation, a mere 3% of companies classify their supply chain solutions as genuinely innovative.

Ajay Nair, partner and leader for supply chain and operations at PwC India, stated, “In today’s volatile business environment, supply chains sit at the intersection of trust, technology and transformation. Their elevation from backroom functions to strategic enablers is critical to building resilience, agility and sustainable growth.”

The report also pointed to significant gaps in responsiveness and resilience. Only 21% of organizations believe they are responsive enough to meet customer expectations, while 28% confessed to frequently falling short of basic customer demands. Approximately 35% of respondents described their supply chains as fragile and susceptible to disruptions.

In terms of sustainability, while 42% of organizations have begun tracking Scope 3 emissions, only 6% have achieved actual reductions, indicating challenges in converting environmental commitments into tangible results.

Impact

This news is highly relevant for investors as it points to operational inefficiencies and potential risks within a large segment of Indian businesses. Companies that address these supply chain challenges by investing in technology and upskilling their workforce are likely to gain a competitive advantage, leading to better financial performance and stock valuations. Investors may look for companies with agile, resilient, and tech-enabled supply chains, while being cautious about those lagging in these areas. The overall impact on the market could be moderate, influencing investment decisions in sectors heavily reliant on supply chain efficiency.

Rating: 7/10

Difficult Terms Explained:

Supply Chains: The entire process of creating and delivering a product or service, from sourcing raw materials to reaching the final customer.

Technology Infrastructure: The hardware, software, networks, and facilities required to support technology operations.

Capability Challenges: Issues related to the skills, knowledge, and expertise of the workforce, or the processes and systems in place.

Siloed Working Environments: Departments or teams within an organization that operate independently, with poor communication and collaboration between them.

Strategic Decision-Making: The process of making high-level choices that affect the long-term direction and success of an organization.

Resilience: The ability of a system or organization to withstand or recover quickly from difficult conditions or disruptions.

Agility: The ability of an organization to respond quickly and effectively to changes in the market or business environment.

Sustainable Growth: Business growth that is achieved in a way that is environmentally and socially responsible, and can be maintained over the long term.

Scope 3 Emissions: Indirect greenhouse gas emissions that occur in a company's value chain, both upstream and downstream, but are not directly controlled by the company.