COVID-19 pandemic exposes weakness in Aussie supply chains

Media release
14 May 2020

The COVID-19 pandemic has thrown a spotlight on the fragility of our nation's supply chains and access to vital medical equipment and resources, according to experts from Deakin’s Centre for Supply Chain and Logistics (CSCL).

Industry Professor and CSCL Director Dr Hermione Parsons said Australia was vulnerable to unforeseen supply chain shocks such as those resulting from panic buying and the lockdown in response to the COVID-19 pandemic.

"Australia cannot afford to underestimate society’s reliance on supply chains and the people they employ to keep our businesses moving – yet, until the pandemic, we have done," Dr Parsons said.

"In recent years, there's been increased demand for 'always available products' and 'just-in-time' services, compounded by fast-changing consumer behaviours driven by advances in technologies such as e-commerce.

"At the same time, the Australian workforce in supply chain and freight logistics is ageing, male dominated and largely skilled to manage a bygone era. There's no replacement pipeline of workers is in sight; and no comprehensive national education and training program exists in Australia.

"We need to start thinking more creatively about these workforce development needs, so we're protected in future times of drought, bushfires, floods and pandemics. We need to be prepared, and we need to build resilience in Australia's supply chain and freight logistics workforce."

In a typical global supply chain system, raw materials are sourced from one country, the components designed in another, parts made in a third, then the pieces shipped to various assembly plants where labour costs are low. The finished products are then packaged and transported across the globe, possibly for more manufacturing or pre-sale preparation at the point of sale.

As the world responds to the COVID-19 pandemic by closing large parts of economies and borders, this interdependence of markets has resulted in major disruptions to global supply chains.

CSCL Industry Research and Knowledge Exchange Strategist Adam Voak said supply problems were inevitable in this scenario, as the global network only needs one key economy or segment to malfunction to cause disruptions along the entire chain.

"This is why we’re now seeing issues in terms of access to vital medical Personal Protective Equipment, chemical reagents for testing, supply of isotopes for cancer treatments and many other critical final products and precursor elements," Mr Voak said.

"Australia is predominately an import-dominant nation – many of our goods are produced in other countries and come to us through the global supply chain, and those products can face significant barriers in terms of time, efficiency, cost and security.

"There are certainly lessons to be learned from the COVID-19 pandemic, as well as the impact of natural disasters such as volcano eruptions, bushfires and tropical cyclones on our supply chains.

"Managing critical medical and food supplies, reducing food waste, improving the competitiveness of our food export industry through end-to-end supply chain traceability, and protecting our environment from packaging and e-commerce related transport emissions and congestion are all critical supply chain issues requiring a newly skilled and knowledgeable workforce.

"Much more needs to be done in terms of planning, skills and knowledge development, investment and safety stockpiling at the state and national levels to design our supply chains to better protect society in the future."

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