The Real ROI of Modern Supply Chains: The Investments Separating Leaders from Laggards

Supply chain leaders are promising gains in productivity, agility and customer satisfaction – but with cost still a top priority for most organisations, how do you fund transformation? Supply Chain Insights spoke with industry leaders to explore where the smartest investments are being made, what’s separating the leaders from the laggards, and why the definition of ROI itself is changing.

Industry leaders are currently facing significant pressures to shave spending and drive value to stay ahead, which means investment priorities and business cases across supply chains are under intense scrutiny. After years of pandemic-forward investment, experts say the pendulum has swung toward operational lean-out – but rather than simply cutting costs, leading organisations are extracting efficiencies to fund the next wave of transformation.

From Cost-Cutting to Value Creation

Cost reduction isn’t going away, but how companies pursue it is changing. Rather than slashing budgets, the smartest organisations are using efficiency gains to fund future transformation. To understand the current cost focus, it helps to look at the main drivers and significant events in recent years.

“During COVID, we went from just in time, to just ran out,” says Lee Koutsos, Director of Connected Workforce Solutions & Storage Equipment Division ANZ at Dematic. “Stock holdings multiplied compared with pre-COVID levels, which meant a lot of investment was brought forward. Now organisations are focused on leaning out their operations again.”

Many organisations aren't stopping there. Instead, they're using efficiency gains as a launchpad – extracting savings from existing operations and redirecting them into longer-term transformation.

“Cost still remains a priority,” says Charlotte Jordan, Executive Director Supply Chain at TMX Transform. “To support strategy transformation in that environment, we have to find the benefits first, drive cost out, and use those savings to fund future investments.”

Charlotte says organisations that have already addressed the most accessible savings often find there's more to unlock when they connect data points across their supply chain. "When you build a complete, comprehensive picture, you can draw greater benefit and efficiency," she says. "And if organisations can't afford to invest right now, it's about maximising existing infrastructure, extending the life of assets, and planning for transformation."

For Raghav Sibal, Vice President, APAC at Manhattan Associates, the shift goes further than cost. “While cost reduction is always present, savvy businesses are making investments that support long-term performance and supply chain resilience,” he says. “Instead of asking how technology can simply reduce labour costs, organisations are looking at how it can improve service levels, respond quicker to change and support growth across channels. There’s a growing recognition that efficiency on its own isn’t enough if the supply chain can’t adapt when conditions change.”

Dematic’s Lee Koutsos says the definition of ROI itself needs rethinking. "When companies first install technology the actual operational impact might slow down, because it's an extra process they didn't have before," he says. "If you're just looking at the financials, you think you're going to make a loss. But it pays in multiples when you factor in missed shipments, lost stock, the cost of sending another truck to fulfil an order that went wrong. The cost of doing things poorly far outweighs the cost of the solution."

The Simulation and Data Revolution

Organisations are now starting to change how they build and validate their business cases in supply chain investment. By using advanced simulation tools, multi-scenario analysis can be presented to stakeholders and used as a powerful persuasion tool when making strategic recommendations.

Charlotte says TMX clients are now running upwards of 19 different strategic scenarios simultaneously, incorporating variables around growth, market conditions, new service offerings and changing customer demand. "Five years ago, analysts were manually running these models over and over," she says. "Now, once you've twinned the network and built the baseline, we can run scenarios in a matter of minutes rather than days or weeks."

This has a significant impact on stakeholder buy-in. "You go from a business case document to something far more tangible," Charlotte says. "With simulation, you can show stakeholders the future network model – how it runs, what a day in the life looks like. You’ve answered why this option, why not the others, and you have the fact base to prove it."

Manhattan’s Raghav Sibal sees the same principle playing out through unified technology platforms. "The strongest returns are coming from investments that improve execution, not just planning," he says. "What really sets high-performing organisations apart is a move away from disconnected point solutions. When inventory, order management and workforce orchestration are connected, the benefits compound. Operations become more predictable and resilient, not just faster."

Raghav says this shift toward data-driven decision-making extends beyond strategy into daily operations. "Modern supply chain software makes performance visible in real time," he says. "When organisations can continuously track productivity, service levels and exceptions, they can identify issues earlier and focus on incremental improvements rather than reactive fixes."

On the warehouse floor, Lee says the improved data availability is linking operations which once ran independently, together. “More and more, everything we do is around connecting the devices, connecting the people to the devices, connecting the people to the business,” he says. “Data is the lifeline of AI. Too many times, I’ve heard people say, ‘if I had that information, I would have made a different decision.’”

This increase in connection means more companies are starting to look at a wider operational scope when making decisions.

"If you've got a data link between all of those, you can get some really nice efficiencies and valuable information that you wouldn't have had before. Don't ring-fence solutions – look at the bigger picture.”

Leaders vs Laggards: The Widening Gap

The gap between high-performing supply chains and those not keeping up is defined by how companies approach investment decisions. One of the most persistent traps, according to Raghav, is the belief that automation alone will solve operational challenges.

He warns against the misconception. “Without the right software foundation and processes in place, automation can actually increase complexity rather than reduce it.” He adds that leaders take a connected, platform-based approach. “Rather than treating technology, people and sustainability as separate initiatives, they invest with a clear view of how everything fits together.”

He reiterates Lee’s point around data connection, and says the mistake is pursuing solutions in isolation, which fragments data and makes it harder to realise real value. Getting it right means treating transformation as a whole-of-business exercise. “For example, WMS transformations are a whole-of-business change, not just a system upgrade. That means bringing operations, IT, leadership and frontline teams together early, so everyone understands why the change is happening and how it will affect the way work gets done.”

Lee points out that while transformation is daunting to approach, doing so earlier is almost always better in the long run. “Businesses that embrace change always come out saying, ‘I can’t believe I didn’t do this earlier,’” he says. “There are some large companies that have resisted anything technical or any sort of advancement because they’re not comfortable with it, and now the ladder that they’ve got to climb is so much higher than their competitors.”

He says the consequences of poor data visibility play out in everyday decisions. "A manager might keep three extra people on for an afternoon shift because they didn't have up-to-date data telling them they didn't need them," he says. "That's money and efficiency walking out the door."

Lee also warns against isolated investment decisions. "Isolating business decisions from technology roadmaps can be a big mistake."

TMX’s Charlotte Jordan says leaders are leveraging data and AI not just to shape strategy, but to drive predictive decision-making across every operational layer. “From production planning through to final delivery, companies are leveraging data and personalisation to inform not just what customers want, but when and how they want it delivered,” she says. Meanwhile, companies falling behind have aged infrastructure and are now struggling to keep pace with customer needs, or have competitors offering greater speed, choice, services and more transparent, responsible products.

Charlotte says these businesses who paused investment are now scrambling to respond. "We've been saying for the last few years that you will be left behind, but it's really hitting home now. If you don't make those investments, where will you be in a couple of years?"

Where to Invest Now

Looking ahead, all three experts point to converging investment priorities. When it comes to predicting where the sharpest competitive edge will stem from, they offer a range of areas to focus on.  

Charlotte says the way data is used in day-to-day operations, and towards strategy will shift from informing human decisions to powering automated ones.

“Data platforms won’t serve people anymore; they will serve machines,” she says. “And the shift for people will be to provide greater governance and oversight – governing real-time data exchanges between AI agents and enterprise systems.” She also points to unified commerce strategies and customer data platforms as key investment areas, as businesses enter “a more sophisticated environment, connecting fulfilment operations and managing channels strategically”.

Raghav says workforce technology will provide a strong competitive edge. “The ability to onboard, train and support workers efficiently, and to give them intuitive tools that make their jobs easier, will be a key differentiator,” he notes. On AI, he predicts that business success will depend on its use-case. “Data visibility and AI-driven decision support will play a growing role, but only when AI is embedded directly into operational workflows rather than added as a separate layer.”

He also advocates for systems designed for continuous evolution. Organisations locked into major upgrade cycles are finding it harder to keep pace with those on cloud-native platforms that support continuous improvement.

“Cloud-native platforms make it easier to implement change, whether that's adjusting workflows, introducing new fulfilment options or responding quickly to demand shifts. The underlying architecture matters."

When looking at the practical reality of the warehouse floor, where AI is already delivering, Lee says the biggest gains often come from solving problems people didn't even know they had.

"The organisations that get the most value are the ones willing to open up their operations and talk honestly about their pain points. Often, there are opportunities they didn’t know were there, " he concludes.