More than one in three Australian supply chain leaders say cost reduction is their biggest challenge
Short-term survival tactics replace strategic planning as 38% focus on immediate cost-cutting
New research from TMX Transform, a global end-to-end supply chain consultancy, reveals that cost pressures are forcing Australian supply chain leaders into damaging short-term thinking, with potentially serious consequences for national competitiveness and crisis resilience.
TMX Transform surveyed over 500 supply chain leaders across Australia to understand how cost pressures and customer demands are shaping strategic decision-making in the sector.
The findings paint a picture of supply chains under pressure, with leaders caught between rising costs and escalating consumer expectations. This is driving tactical responses rather than the strategic investment needed for long-term resilience and competitive advantage.
Cost pressures dominate supply chain priorities:
38% of supply chain leaders say cost reduction is the biggest challenge they face
20% say rising external costs, such as shipping and freight, are straining their operations
One in four (26%) say if they could improve only one area of their supply chain it would be to reduce costs
20% say slashing costs is their highest priority over the next two years
Strategic planning is being seriously neglected:
Only 7% of supply chain leaders would prioritise end-to-end visibility as their top improvement area over the next two years, despite its proven ability to reduce costs and enhance customer experience
12% rank changing consumer behaviour as their second-highest external challenge, showing leaders are caught between keeping costs down and customers happy
Travis Erridge, CEO of TMX Transform, said:
"Supply chain leaders are grappling with the impossible mandate to 'transform, but don't invest'. Our survey paints a grim picture of supply chains on starvation diets, focused on immediate cost cutting rather than building the intelligent, resilient systems that deliver sustainable competitive advantage. This short-termism is stifling innovation and impeding companies' ability to compete at home and abroad."
The research highlights that business leadership still view supply chains as a cost centre rather than a strategic differentiator. This has broader implications for Australia's productivity, inflation management, crisis resilience, and national competitiveness.
However, there is cause for optimism. With the cost of capital beginning to decrease, businesses have an opportunity to break free from the cost-cutting cycle.
Travis Erridge added:
"Consumers today demand extensive choice, immediate delivery, and sustainable manufacturing - all at low cost. Yet businesses are responding with tactical cost-cutting rather than strategic transformation. The companies that take this moment to invest in long-term supply chain optimisation through digital transformation will win on cost, capability, and customer experience. Smarter supply chains are a competitive differentiator for companies and countries – that means investment."
The survey suggests that intelligent supply chains, enabled by data, AI and predictive analytics, can bridge the gap between cost efficiency and superior customer experience – allowing companies to anticipate customer needs while optimising inventory management.
TMX Transform's report, State of the Supply Chain Australia 2025, explores these findings in detail and outlines how Australian businesses can build supply chain resilience while managing cost pressures.
View the full report here.
