Rising Costs and Inflation Force Australian Supply Chains to Scale Back Transformation Plans
A new research survey from Australia's leading supply chain and logistics consultancy, Prological, has found that rising costs and inflation have risen to the top challenge for supply chains professionals, causing businesses to scale back on sustainability and technology transformations.
The Prological Supply Chain Pulse Check Survey 2025 brings views from more than 200 professionals in supply chain, logistics, manufacturing, retail, property and operations, uncovering a marked slowdown in automation and sustainability initiatives as businesses grapple with economic pressures.
The annual survey reveals that automation investment has declined, with only 38% of organisations increasing automation in 2024, down from 49% in 2023. Similarly, sustainability implementation has fallen, with 54% of businesses actively reducing carbon emissions compared to 72% last year.
Key findings of the Prological Supply Chain Pulse Check Survey 2025 include:
Rising costs and inflation have overtaken staff shortages as the top supply chain challenge
Only 38% increased automation investment in 2024, down from 49% in 2023
54% are implementing carbon reduction initiatives, falling from 72% in 2023
49% prioritise operational efficiency over cost (26%) in warehouse selection
35% plan to expand or relocate warehousing operations within five years
20% of organisations report full end-to-end supply chain visibility for customers
Rising costs and inflation have emerged as the dominant challenge facing supply chains this year, with 25% of respondents identifying it as their primary concern. Staff shortages (17%) remain a critical issue, while inventory management has climbed in importance, with 10% highlighting it as a key challenge.
The survey demonstrated a more measured approach to transformation, with businesses pursuing incremental progress rather than large-scale change. Despite the current slowdown, forward-looking indicators suggest continued commitment to automation among larger organisations, with 66% of businesses with 101-300 employees planning to increase automation investments in 2025-2026.
In the industrial property sector, the survey reveals a mature approach to facility selection, with 49% of organisations prioritising operational efficiency over cost considerations (26%) – indicating a clear understanding of the false economy of pursuing lower lease costs at the expense of operational capability.
Peter Jones, Managing Director and Founder at Prological said: "The story of 2024 has been one of recalibration rather than retreat. While we've seen a notable pullback in automation investment and sustainability initiatives, these shifts represent a maturing approach to transformation rather than an abandonment of progress. Organisations are learning to navigate the delicate balance between innovation and pragmatism, adopting more measured, sustainable approaches to change."
To download the Prological Supply Chain Pulse Check 2025 report in full, click here.
