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Introduction: Resilient Supply Chains Purchasing
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The supply chain of a country ensures the overall functioning and workings of the country. Certainly, there are certain vulnerabilities associated with it and these are managed by the productivity commission of Australia. The productivity commission is an independent research and advisory body that is associated with a range of economic, social and environmental concerns that affects the well-being of Australians. This independent commission was enacted by the productivity commission act of 1998 (legislation.gov.au, 2022). The primary role of this organisation is to assist the government to make effective policies that are aimed to assist Australians in the long run.
The productivity commission has been formulated to note the nature and sources of risks associated with the proper functioning of the economy of Australia and its productivity. It also helps in ensuring the well-being of the people (Rawling, and Schofield-Georgeson, 2018). It also identifies the global supply chains, vulnerabilities and possibilities for different approaches to identify the potential risks. In terms of its operation, this commission acts as an independent body also it is transparent in terms of its work process and has a diverse community-wide perspective (pc.gov.au, 2022). It implies that the advice benign provided by the commission to the government and its associated operations are all open for public scrutiny. This organisaiton is bound by the statutory guidelines to take an unbiased approach to the well-being of entire communities rather than specific companies or organisations (Meltzer, 2018). In this report, certain approaches will be discussed that will be beneficial in determining the supply chain vulnerability of the products and services. A relationship will be determined regarding the supply chains, working of the economy and well-being of the common people of Australia. The requirement of onshoring due to the pandemic will be elaborated further.
Approaches in the determination of Supply chain vulnerability
There are certain approaches associated with the determination of the vulnerabilities that lie in the supply chain. The key vulnerabilities in the Supply chain (SC) lie in certain sections of functionalities. The SC of Australia comprises thousands of od companies across different scales and tiers of their work processes (Mangioni, 2020). Consecutively they are vulnerable to a range of risks. Broadly this vulnerability is classified based on the risks that arise within the supply chain and the external ones. Internal vulnerability arises within the supply chain due to below-par interaction and cooperation between the entities of the SC.Primarily this aspect lies in the lack of visibility. This situation mostly arises due to the ongoing consideration of the short-sighted benefits of society. This situation hinders the possibility of the benefits of society at large in the long run.Also, it impacts the SC of the country at large in times of crisis. It was noticed during the span of the pandemic however such cases were mitigated with proper policies through evaluation of the ongoing conditions (Vlajicet al. 2019). Lack of ownership is another critical factor to be considered in this situation that affects the work process. The vulnerability of the SC is dependent on the external factors that arise from the lack of ownership of the actions and the sequential active role to suppress the conditions. Inaccurate forecasts are another major reason that disrupts the work process of SC (cranfield.ac.uk, 2022). External risks on the other hand arise from different critical natural situations, like disasters or man-made phenomena like terrorist attacks, and strikes.
All these aspects are mitigated by certain key approaches. These approaches are widely classified into sections of technological, rational and analytical approaches. These approaches are highly critical in the assessment of the vulnerabilities and proper address of the concerns. A technological aspect is an approach associated with modernisation and the inclusion of new technologies to generate efficiency in the work process (Ghadge et al. 2019). This approach helps in updating the work process at par with global standards and mitigates different internal and external factors of vulnerabilities. The rational approach is undertaken to establish proper communication in the SCM and an effective work process to affect the work process overall by enhancing coordination (Ruel et al. 2019). The analytical approach governs the visibility and forecasting that is conducted through the analysis of available data. This approach identifies the goods and services and assesses the vulnerabilities associated with them that might hinder the operation in the long run (pc.gov.au, 2022). The data analysis is also considered to identify the vulnerabilities and threats associated with the market and thereby formulate strategies on a national level to mitigate the impact on the supply chain system of Australia.
Relation between supply chains, economy and well-being
Most of the supply chain in Australia is targeted towards the well-being of the country. However, not all approaches impact the work process of the country. A resilient supply chain is mostly exposed to external conditions and associated shocks and adapts accordingly which protects and continues to support the national income (Kiss et al. 2019).There are certain components of the SC that are categorised accordingly and aid in the benefit of the country.The first hand of the RSC includes domestic and imported goods and services. Primarily these are targeted to the health of people like medication in hospital facilities (Nikookaret al. 2021). The domestic and imported final products and services include medication and defence facilities which are categorised into domestic and imported goods and services. The infrastructure and associated logistics are categorised into transport, communication and retail services. Besides these internal goods and services, labour and capital are the services that are included in the course of RSCs that support the overall health, security and well-being of people in Australia.
The above-mentioned figure shows how the SC aids in the operation of the economy that generates the materialistic well-being of Australians. The resilient SC starts at the top encounters most of the external changes and alterations and adapts accordingly.
A well-functioning economy can generate income that enables citizens to buy and consume goods and services with ease. This is ensured by the resilient SCs that work in the interest of the economical stability of the country and other international trade practices. Hence this format of SC is a critical input towards an efficient economy.
A stable course of supply chain and material well-being is associated with the goods and services being consumed by people. The essential goods are the ones that support the basic requirements of Australians (pc.gov.au, 2022). These physiological needs are important for the survival of people implying that these are beneficial for providing health and benefit to common people. A distinction is established between essential and non-essential products that help with the prioritisation of basic needs. It implies that the resilience of the supply chain is also prioritised to concentrate on the supply of necessary goods and services to people and also make other goods easily available for consumption. Vulnerability in the SC would shatter its course and make the products available to people at steep prices or can even lead to a market crisis.
A functioning economy is one where the income of people enables them to make purchases for different goods and components. The availability of materials and services in the market is supported by a well-operated SC and the purchasing power of people denotes the well-being of people. The GNI of Australia is expected to increase by 1.81 trillion dollars by 2025 (statista.com, 2022). It reflects the healthy economy of Australia and the people.
Australian onshoring
The onshoring of Australia is driven by certain aspects and strategies that are beneficial for the overall benefit of Australians. These strategies are targeted to enhance the course of SC associated with the interest of people. These onshoring strategies do not imply the alteration of the entire course of the SC. Rather the onshoring strategies are imparted on certain sections of it that are highly vulnerable to scenarios present in the current situation. These onshoring strategies still ensure a competitive edge remain between the companies and thereby ensure quality standards for people.
However, there are certain limitations to which onshoring strategies can mitigate the risks associated with the SC. it is impacted by the exposure to the disruptions associated with the global supply chain.Complete insulation of these issues is not possible since domestic production is also reliant on imported inputs. For example, the recent onslaught of COVID-19 has impacted the overall course of business and associated imports and exports in the country.This situation impacted the SC of Australia, vehemently.
The pandemic has highly impacted the course of businesses in Australia. Over a quarter of businesses were affected by the course of the pandemic and experienced a reduction in revenue (statista.com, 2022). This course of business loss is evident from the losses incurred in the course of import of essential resources. The pandemic also led to disruption in critical input supplies to the mining industry of Australia (Boehme et al. 2021). The onslaught of COVID-19 however led to a sharp increase in the demand for protective equipment and medications.
Political impact on onshoring and supply chain in Australia
The supply chain and the associated onshoring of any country is impacted by Australia impacted by the course political aspects and stability of the country. The political stability of a country ensures overall effective international trade practices that ensure a stable course of onshoring also the lack of violence and political turmoil positively impacts the supply chain of the country which is noted in the SC of the country. The political stability Index was at 0.85 in Australia as of 2021, whereas the world average for 194 countries was at -0.07 (theglobaleconomy.com, 2022). A stable political environment helps in dominating the market with a stable course of progress and also aids in providing storing support to eh SC regarding the onshoring attributes.the Australian government formulates policies for onshore environmental regulation in all the jurisdictions where petroleum is involved, APPEA works with the government to remove unrequired inefficiency and uncertainty for onshore exploration (appea.com.au, 2022). The country has a vast potential to unlock onshore resources however the country mostly remains unexplored. Effective onshoring policies are to be formulated otherwise it will make the SC vulnerable to major concerns like raising consumer prices and concentration of risks that would localise the issues and in turn enhance vulnerability in the internal and external sectors alike.
Economic impact on onshoring in Australia
The economy plays a major in the course of onshoring and effective SC management.Stable economic growth projects stable growth in terms of business and the purchasing power of the people in the country. Australia is one such country which had been affected byt the course of the pandemic (Kajjumbaet al. 2020). However, they have recovered from that situation and have bounced back the situation to provide a stable onshoring condition and it helps in mitigating most of the major concerns of vulnerabilities associated with the SC of the country
The GDP of Australia took a major dip during the peak of the pandemic. However, the country managed to bounce back from this situation and has projected stable growth in terms of progress. The country is projected to maintain a stable growth rate of around 3% through 2023-2027 (statista.com, 2022). The country shows the stable purchasing power of the people in the country. It will be beneficial in ensuring stability in the course of business propagation and supply chain in the country. The country has been recession free for the past twenty years and hence has managed to mitigate the major sections of vulnerabilities in SC and onshoring. Economic factors play a major role in combating both internal and external vulnerabilities to a severe extent that would otherwise hinder the functionalities of the SC of the country.
Strategies of onshoring and supply chain
Strategies of onshoring and supply are mostly dependent on the stability of the situation that prevails in the country both in terms of governance and economical conditions. Onshoring strategies are assessed based on the current requirement however proper analyses are conducted to ensure proper forecasting of prospects and concerns. Hence the policies are not entirely shifted in a particular direction.
Mostly the SC strategies are dependent on three important factors, demand-driven strategy is the one that ponders the recent trends and demands that drives the course of necessities. During the time of the pandemic, the demand for medical and protective equipment surged in Australia. This aspect gave a rise to the enhancement of the supply of materials. Similarly, agile SC management is taken into consideration when strategies are undertaken to quickly react to consumer demand (Ciccullo et al. 2018). This was noticed in the aforementioned case. Lastly, the collaborative SC strategy is considered to enhance the sales of certain products in association with the trends and demands of people, it assists in mitigating the internal vulnerabilities of SC.
Onshoring is the aspect that focuses on indigenous production. Necessary strategies have been undertaken to enhance machining, petroleum onshoring and plastic moulding processes (Studley, 2021). Government policies in terms of petroleum onshoring have been helpful in the proper utilisation of the country’s natural resources. The productivity commission has also helped in ensuring the course of onshoring of proper resources and their effective utilisation in the SC of Australia.
References
Journals
Boehme, T., Aitken, J., Turner, N. and Handfield, R., 2021. Covid-19 response of an additive manufacturing cluster in Australia. Supply Chain Management: An International Journal.
Ciccullo, F., Pero, M., Caridi, M., Gosling, J. and Purvis, L., 2018. Integrating the environmental and social sustainability pillars into the lean and agile supply chain management paradigms: A literature review and future research directions. Journal of cleaner production, 172, pp.2336-2350.
Ghadge, A., Weiß, M., Caldwell, N.D. and Wilding, R., 2019. Managing cyber risk in supply chains: A review and research agenda. Supply Chain Management: An International Journal.
Kajjumba, G.W., Nagitta, O.P., Osra, F.A. and Mkansi, M., 2020. Offshoring-Outsourcing and Onshoring Tradeoffs: The Impact of Coronavirus on Global Supply Chain. In Outsourcing and Offshoring. IntechOpen.
Kiss, K., Ruszkai, C. and Takács-György, K., 2019. Examination of short supply chains based on circular economy and sustainability aspects. Resources, 8(4), p.161.
Mangioni, V., 2020. Building supply chain capacity between urban and regional Australia through the development of inland rail: Lessons from abroad. Australasian Journal of Regional Studies, The, 26(3), pp.293-322.
Meltzer, J.P., 2018. Digital Australia an Economic and Trade Agenda.
Nikookar, E., Varsei, M. and Wieland, A., 2021. Gaining from disorder: Making the case for antifragility in purchasing and supply chain management. Journal of Purchasing and Supply Management, 27(3), p.100699.
Rawling, M. and Schofield-Georgeson, E., 2018. Industrial legislation in Australia in 2017. Journal of Industrial Relations, 60(3), pp.378-396.
Ruel, S., Shaaban, S. and Ducros, M., 2019. Supply chain vulnerability: contributions from an edifying case study. Journal of Enterprise Information Management.
Studley, M., 2021. Onshoring Through Automation; Perpetuating Inequality?. Frontiers in Robotics and AI, 8, p.634297.
Vlajic, J.V., van der Vorst, J. and Djurdjevic, D., 2019. Influence of product and business environment characteristics on managing supply chain vulnerability-a conceptual foundation. International Journal for Traffic & Transport Engineering, 9(3), pp.p310-319.
Websites
appea.com.au, 2022. Onshore, Available at: https://www.appea.com.au/environment-home/environment/onshore/ [Accessed on: 29th October, 2022]
cranfield.ac.uk, 2022.Supply chain vulnerability. Available at: https://www.cranfield.ac.uk/~/media/images-for-new-website/centres/school-of-management-centres/centre-for-logistics-and-supply-chain-management/old-site-do-not-delete-centre-for-logistics-and-supply-chain-management/vulnerability-report.ashx?la=en#:~:text=Such%20supply%20chain%20risks%20result,supply%20chain%20and%20its%20environment. [Accessed on: 29th October, 2022]
legislation.gov.au, 2022. Productivity commission act, Available at: https://www.legislation.gov.au/Details/C2018C00120 [Accessed on: 29th October, 2022]
pc.gov.au, 2022. supply chain vulnerability, Available at: https://www.pc.gov.au/inquiries/completed/supply-chains/report/supply-chains-overview.pdf [Accessed on: 29th October, 2022]
pc.gov.au, 2022. productivity commission, Available at: https://www.pc.gov.au/about/operate [Accessed on: 29th October, 2022]
statista, 2022. Australia COVID-19 impact on supply chain 2020-21. Available at: https://www.statista.com/statistics/1237426/australia-covid-19-impact-on-supply-chain-sector / [Accessed on: 29th October, 2022]
statista, 2022. Gross national income of Australia, Available at: https://www.statista.com/outlook/co/economy/australia#gross-national-income [Accessed on: 29th October, 2022]
theglobaleconomy, 2022. Australia political stability index, Available at: https://www.theglobaleconomy.com/Australia/wb_political_stability/#:~:text=Political%20stability%20index%20(%2D2.5%20weak%3B%202.5%20strong)&text=The%20average%20value%20for%20Australia,194%20countries%20is%20%2D0.07%20points.[Accessed on: 29th October, 2022]
