In the last decade, the ‘globalisation’ discussion has been dominant. Trade has been progressive through increased digitalisation, providing critical information in real-time world-wide and creating connectivity for supply chain partnerships on a global scale. According to Simon Ellis, VP of MH&L, “The supply chain has increasingly become a critical function for companies to realize their business aspirations and is a competitive weapon in the modern, digital economy.” A weapon perhaps we should have been investing in more so, at a local level.
Australia’s over-reliance on other countries has really been highlighted in the pandemic. It imports over 90% of medicines and this alone makes us vulnerable to major supply chain disruptions –in turn causing a major uplift in prices on medical products when they become scarce. But do we really want to be in this position? There has been “an over-reliance on imports exposed by the crisis, showing a need to rebalance levels of imports and exports” according to Chief Executive of Australian Made, Ben Lazzaro.
The impacts of the pandemic on the economy has been staggering, placing millions of people into unemployment around the world. Australia alone has suffered its single largest monthly fall in the number of people holding a job in April 2020, with a record 6.2% unemployment rate, the highest since 2015 according to the Australian Bureau of Statistics.
Business Leaders have voiced concerns on Australia’s dependence on imports and the need to re-invest in our local manufacturing and supply chain capabilities on home soil – which in turn would bring about more employment opportunities locally.
As well as employment numbers being hard hit, it has been clear that Covid19s impact will be unequally distributed across countries and industries meaning bigger market economies will bounce back faster and digitally enabled industries will boom.
So, what are the opportunities for supply chains?
A review of crisis management plans and a more balanced approach moving forward could mean we are better equipped as a Country to support ourselves and therefore have a more balanced approach as opposed to complete dependence. In turn, this would mean we could adapt to such changes/situations more quickly, regardless of issues, restrictions, and trading challenges and as a country we could continue to flourish.
There are opportunities to invest in more automation and resources at a local level as much as possible to become a more independent economy – this includes relocating some vital manufacturing operations back home, to survive and thrive post Covid-19 and similar unprecedented situations in the future.
Supply Chain Leaders across the country are now feeling the pressure to lead the change and influence a complete mindset transformation of Board and C-level Executives across the country. A short-term cost for a long-term gain.
Do organisations need to develop agile local supply in-house or through a third party in combination with regional suppliers to offset any future crisis?