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Australia’s supply chains “the blood of our economy”

Supply chains are the backbone to contemporary life. But Covid has presented the sector with many challenges. 

Before Covid hit, many Australians didn’t give a second thought to how freight, logistics and supply chains impact our lives – and what happens when they’re interrupted. 

With passages through roads, ports and airports slowed down due to safety measures, we caught a glimpse of the complex processes behind supply chains, and how goods are transported across the globe before landing in our local shops. 

Dr Hermione Parsons – Director of the Centre for Supply Chain and Logistics (CSCL) at Deakin University – says that international supply chains are especially critical, since Australia is an island nation, and a relatively small market, located a long distance away from the major trade routes. 

For Dr Roberto Perez-Franco – a Senior Research Fellow within CSCL – it’s clear how the sector provides the backbone to contemporary life, claiming: “supply chains are the blood of our economy and the enablers of our modern lives.”

We sat down with Dr Parsons and Dr Perez-Franco to talk panic buying, convenience culture and the future of the supply chain industry.

There’s no scarcity of convenience 

We live in a culture of convenience. Not only do we have easy access to a variety of goods, but we can have them couriered to our homes almost immediately; how many of us have placed online orders from the comfort of our couches, even before the pandemic?  

But we’re also used to buying more goods than we conceivably need (for instance, each year, we waste around 7.3 million tonnes of food).

We saw this in full effect during 2020, when panic buying surged over the course of the year; afraid of missing out on food and other essential items, we purchased far more than we actually needed, creating a temporary scarcity that only fuelled our fear and panic.   

It’s important to remember that Australia is one of the wealthiest countries in the world, and that many of us have easy access to goods. As Dr Perez-Franco reminds us, “every basic good that we need, such as food and medicine, is available to us and will continue to be so. 

“Whatever disruption occurred at the beginning of the pandemic, in the first half of 2020, has by now been addressed. Nobody in Australia will go hungry due to a lack of supply of any basic product necessary to sustain our life.”

Still, you can’t deny the strain that our convenience culture, combined with our excessive consumption, puts on our supply chains. Large stocks of goods need to be purchased at a time, just so we can have access to everything we could possibly want to buy.

The goods then need to be stored at multiple locations, or else at a central warehouse, so it’s easier to bring them to consumers. 

It’s a risky – and expensive – move, because it’s never guaranteed we’ll buy all of the goods, despite wanting access to them. 

Rediscovering local goods 

Our panic buying only added to the fear and uncertainty surrounding the pandemic. But there’s at least one positive thing that came out of it: that temporary scarcity reminded us that everything in our homes, in our pantries, comes from somewhere else before arriving at the shops – and that we have supply chains and logistics to thank for getting these goods to our neighbourhoods.

Australia is an import-dominant nation, meaning our supply of goods relies heavily on purchasing them – or else the materials we need to make them – from other countries. These global supply chains were interrupted by Covid, hindering our access to certain products. 

Items that are imported from overseas now have long waiting times before arriving in Australia, and if the goods are in limited supply, their prices have gone up – meaning Australian-made products are likely to be more affordable. 

Because of this, we’ve already seen a shift away from relying on imported items; instead, we’re more likely to stock up on goods manufactured in Australia, which is excellent news for local business.  

But here’s the catch; even locally-manufactured goods can rely on imports. As these get harder to come by, the prices of Australian-made products go up as well. “Import and export supply chains require freight transportation by sea or air – there is no other choice but both continue to be severely disrupted by Covid,” Dr Parson says.

“When it comes to goods that depend on materials or components sourced from abroad, then the complexity of the problem grows exponentially,” Dr Perez-Franco says. “The distances, costs and waiting times involved are much larger.”

It’s difficult managing delays and low stocks of resources without the additional stress created by the pandemic. “Businesses across Australia are suffering,” admits Dr Parsons. But the supply chain world is learning how to adapt, and the unique challenges posed by Covid are becoming one more part of business. 

“It’s not easy running a supply chain,” Dr Perez-Franco says. “Trying to get consumers the large variety of goods they want, at the prices they want to pay, while complying with all the rules, requires very long and complex supply chains that often extend – in one form or another – across countries and cultures. 

“When you hit something that complex with a massive disruption like Covid, it’s amazing that our supply chains performed as well as they did.”

The changing face of supply chain

Troubling times have often been fertile ground for positive change. Before the pandemic, Australia’s supply chain sector was on the verge of a revolution – but Covid is accelerating the process. 

In a time of climate change and ecological collapse, we have a responsibility to reduce, ideally all the way to zero, our impact on the planet and on people – something the supply chain sector is also working on, according to Dr Perez-Franco.  

“There’s a need for greater transparency in supply chains. It’s important we can prove that the goods we consume were produced using fairly compensated labour, in good working conditions, and with no detriment to the environment – but it’s no small challenge.

“Supply chains need to be faster, smarter and cleaner than they were before, especially so they can comply with traceability and sustainability requirements in the future.”

And who better to bring about this revolution than the changing face of the supply chain workforce. Like many industries, it’s a male-dominated field; but with the current workforce ageing into retirement, we’re due for an influx of talent from all walks of life to take the industry into its next phase.

Dr Perez-Franco says, ideally, these workers will reflect the diverse cross-section of human experience in Australia.  

“The future is female,” he says. “And male, and of all races and backgrounds. We need a workforce capable of consistently adhering to higher values regarding our communities and the environment, and who are committed to certain moral non-negotiables.”

And there’s been progress on that front, says Dr Parsons. “For several years, CSCL has been working to bring more female talent to the sector, through an initiative called Wayfinder: Supply Chain Careers for Women. There is a long way to go, but the great response we have seen is a clear sign that things are moving in the right direction.”

Dr Hermione Parsons is the Director of the Centre for Supply Chain and Logistics at Deakin University. 

Dr Roberto Perez-Franco is a Senior Research Fellow within the Centre for Supply Chain and Logistics at Deakin University.

Interested in a career in supply chain and logistics? Explore Wayfinder: Supply Chain Careers for Women.

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