Supply Chain Shock: 4 Takeaways

Australian Monitor's Euan Brown reflects on the four key things he's learnt from the ongoing supply chain woes.


7 July 2022

Text:/ Euan Brown

During the past two years, the consequences of worldwide pandemic-related restrictions and lockdowns have hampered international supply chains. Products that would have taken a month to arrive in Australia pre-pandemic are now seeing delays balloon out to several months or more.

In April 2022, the Australian Bureau of Statistics (ABS) found that 41 percent of all Australian businesses reported they were experiencing supply chain disruptions. Businesses in the retail trade were experiencing the highest proportion of supply chain disruptions at 84 percent, followed by accommodation and food services (67 percent), and construction (54 percent). Logistics and/or freight challenges, supply constraints, international supply chain issues, and Covid-19 restrictions were some of the main contributors to these disruptions, according to the ABS.

Prior to 2020, it seemed almost unfathomable that an event could derail a thriving global environment. However, an almost perfect storm of natural disasters, political conditions, and the pandemic put unexpected pressure on supply chains and had a direct impact on the survival of businesses, especially small and medium-sized ones.

Now, as businesses resume a state of partially-normal operations — while simultaneously navigating ongoing supply chain challenges, worker shortages, and other remnants of the pandemic — it’s vital that businesses take stock of important lessons from the last two years.

There are four key learnings that can help minimise supply chain issues caused by future unforeseen events:

Review suppliers & their product selection: As an ongoing practice, businesses should consider reviewing suppliers and their product selection at least once a year. Over time, products need to evolve, be it in the range portfolio, design, or materials used; however, some suppliers may have limited access to products, parts, and materials. Should the need arise, businesses can find themselves in a tough position with customers without access to new or alternative products, which can result in lost sales.

Another consideration is where suppliers source products and materials from. Branching out with multiple suppliers across the world avoids centralised risk. This means that, should that supply chain be affected by situations such as worker or material shortages, employee strikes, or lockdowns, businesses can still have access to items through a broader supplier network.

General Manager of Australian Monitor, Euan Brown.

Accommodate for more accessible parts & materials: Reviewing manufacturing processes and determining how to accommodate for delays or shortages in parts and materials has become an important lesson, as many of the recently reported delays are due to material inaccessibility. Businesses need to consider how to make parts more accessible, and where new or alternative materials can be sourced from to keep supply lines operating and products in development. This can result in product versatility and provide businesses with a competitive edge for the future.

Extend lead time & forecasting: It can be difficult to predict if and when another global event will happen that disrupts businesses and supply chains; however, keeping a close watch on supply chains and having regular conversations with suppliers may help to forecast potential issues. This lets businesses plan more effectively, for example, by extending the lead time of products in preparation for disruptions.

Of course, getting products to customers in the fastest way is always a priority for good customer experiences. However, preparing customers and managing expectations in advance of situations can be just as important for building rapport and trusted, transparent relationships. This means that clients aren’t left wondering why orders are taking so long or leaving complaints with businesses as they feel underappreciated and forgotten.

Increase stock holding: Alternatively, to avoid supply chain delays in the short-term, businesses can increase stock levels in warehouses and on premises. This will be of benefit should any minor delays to the supply line occur, such as union action and employee strikes.

Setting this up may currently be difficult for many businesses as it requires capital for upfront costs, which is a significant expense considering the rising costs of transportation and freight across the world. Businesses will also need space to store products and must consider the immediate availability of products and materials.

Businesses that consider the lessons of the pandemic and implement measures from these learnings will likely be better positioned for future disruption. This will be the difference between businesses that are ready for future opportunities and businesses that are just getting by.

The pandemic has taught businesses many hard lessons and is why they shouldn’t ignore the key learnings from the failures and hardships of the past; instead, businesses should review any mistakes in detail and use those lessons to inform future decisions.

Euan Brown is General Manager of Australian Monitor.


Businesses that consider the lessons of the pandemic and implement measures from these learnings will likely be better positioned for future disruption.


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