Manufacturers miss value targets in digital supply chains

Fragmented systems, poor data, and skill gaps are driving failure risks.

Despite aggressive investment in digital supply chain technologies, manufacturers continue to face serious execution challenges. Gartner predicts that by 2028, 60% of digital supply chain initiatives will fail to deliver their promised value. According to experts, the issue isn’t just the tech—it’s what companies aren’t doing around it.

“While benefits are clear, many organisations still struggle to implement digital supply chains effectively due to fragmented or desperate legacy systems, poor data quality, and, of course, lack of internal digital skills,” said Ben Lim, Senior Country Manager for Malaysia at Epicor. “These challenges are obviously compounded by misalignment of expectation from the ground to the top management and the suppliers and, of course, also under investment in change management and workforce training.”

Lim emphasised that digital supply chain efforts must be treated as a strategic long-term transformation rather than another routine upgrade. “Leadership also must champion a culture of innovation and continuous learning, ensuring the team is empowered with the right tools and sufficient training,” he said.

Associate Professor Goh Puay Guan of the Department of Analytics and Operations at NUS Business School echoed this, highlighting that transformation often requires a full business rethink. “It’s not just a matter of saying that I want to implement technology into my existing workflow and automate that existing way of doing my business,” said Goh. “But it may also involve changing the way that we do business and the way that we work as well.”

When it comes to specific technologies, the risk of underperformance is often rooted in how they are implemented. “AI and ERP fall short when they are not well integrated into day-to-day processes or workflow,” said Lim. “This technology also might underdeliver when there’s a lack of skilled users or structured adoption strategy.” Cloud platforms and IoT projects also tend to miss the mark when lacking full integration or alignment with supply chain operations, he added.

To avoid these pitfalls, companies must invest not just in tools, but also in people.

“Upskilling is essential to support modern, connected and resilient operations,” said Lim, advocating for role-based training in areas like data management and shop floor operations. ERP systems with embedded training modules and intuitive user interfaces can help teams adopt new workflows faster and more effectively.

Goh added that successful transformation hinges on a multi-pronged framework addressing technology, processes, and people. “We have to get buy-in from our own organisation as well as the buy-in from our outside stakeholders,” he said.