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As the sector continues to transform, there are many that see the future of Australian supply chain as exciting and one full of opportunity. Deloitte Access Economics recently conducted research into the future of the supply chain and logistics environment; where and how the industry is forecast to develop and what’s driving this growth. The report included insights from Professor Booi Kam, Program Director of the Master of Supply Chain Logistics Management at RMIT.

We have summarised the findings and outlined the opportunities and challenges the sector - and those working within it - face.

Strong growth expected for the future

Despite the increasing disruption of the supply chain, the sector is expected to grow at an above-average rate of 2.1 per cent per annum to 2022, compared to 1.5 per cent per annum for the entire Australian labour force. This will see the number of supply chain jobs increase from 145,000 in 2016-17 to 161,000 in 2021-22.

The Department for Work and Small Business also predicts very strong growth for Supply, Distribution and Procurement Managers, projecting a 20 per cent growth in jobs from 41,000 employed in 2017 to a projected 49,600 in 2022.

Professor Booi Kam from RMIT University's School of Business, IT and Logistics.

Amazon’s arrival Down Under

In December 2017, online retail giant Amazon launched in Australia. The entry of Amazon is expected to significantly disrupt the current retail landscape in Australia, which currently accounts for just seven per cent of total retail expenditure. This is much less than that of the US and UK, where online spending counts for 12 per cent and 17 per cent, respectively, of total expenditure.

Amazon UK has been a pioneer of integrating new technology into the supply chain, and famously delivered its first package via drone in December 2014. The delivery took just 13 minutes from the click of order confirmation to the delivery of the package.

The company may take some time to establish its logistics operations in Australia, to successfully deliver timely orders to those in rural and remote areas. However, with almost 90 per cent of the population living in urban areas - and therefore, easily accessible by road and rail - it is likely that the arrival of Amazon will still have a noticeable impact on the online retail space, prompting others to assess and address their online and in-store customer experience.

What’s in store for occupational development?

The effect of a digitised supply chain is driving occupational change. In the report, Deloitte states that there is an ‘increasing reliance on data-driven insights in order to improve supply chain efficiency’. This may open up opportunities for data analysts, and requires supply chain managers who have the knowledge and expertise to interpret data into actionable points to get results.

The Australian and New Zealand Standard Classification of Occupations outlines various roles where there may be potential employment opportunities, including:

  • Importers, Exporters and Wholesalers
  • Manufacturers
  • Production Managers
  • Supply Distribution Managers
  • General Manager (Transport, Postal and Warehousing industry).

There are plenty of job opportunities across the supply chain and logistics sector, with demand for production managers expected to grow by over 7,000 people over the next five years. Therefore, an appropriately-skilled and knowledgeable workforce is essential to ensure the operations continue to run smoothly.

Wage increase signal a rewarding future

Perhaps the most significant forecasted change is the rise in wages in the supply chain sector. Deloitte’s findings suggest that the average annual income of supply chain and logistics workers was $140,949 in 2016-17. This specific figure takes into account those with postgraduate qualifications in management and commerce, which is 66 per cent more than supply chain and logistics workers with no post-school qualifications. Over the course of a lifetime, supply chain professionals with tertiary qualifications earn a 48 per cent premium over those with no post-school qualifications. The impressive figures don’t stop there - this average annual income of supply chain and logistics workers is forecast to increase in 2021-22 to $164,360.

It’s clear that postgraduate study enables workers to develop advanced skills that help them advance in their career and take on management roles. It may also enable professionals in other areas to move into supply chain management roles, to ensure companies are providing the very best experience for all stakeholders.

Download the full Deloitte Access Economics report to read about the research and findings in more detail.