Managing risk: How to keep Australia’s supply chains open in challenging times

Australian retailers have shouldered a storm of supply chain disruptions throughout the global pandemic, with natural disasters such as floods and bushfires cutting supply lines across the country for weeks at a time and exacerbating the impact of the global shipping slowdown.

Indeed, empty supermarket shelves have become a familiar sight for many Australian shoppers, and ‘supply chain issues’ are now a household term. 

The nation’s retailers have been forced to undertake a major overhaul of their risk management strategies in the wake of ongoing lockdowns and border closures. They have responded to the challenges with creative solutions, diversifying supply lines and opening up shipping routes that have not been used for decades. As they’ve proven, flexibility is key – along with the ability to accurately predict risks and respond quickly. 

Fires and floods: a risky business

Just weeks into 2022, major flooding in outback South Australia (SA) stopped all rail freight on the Trans-Australia railway and impacted road networks across the country. This one-in-200-year weather event forced major retailers including Coles and Woolworths, to impose buying limits on some products in affected regions. The whole catastrophe was described by Richard Forbes, Independent Food Distributors Australia chief executive, as the worst disruption to the food supply chain in living memory. 

The country’s 2019–2020 bushfire season posed similarly unprecedented challenges for retailers, with economic losses estimated to exceed $110 billion. Highways and ports were closed, production lines were damaged, and consumer spending took a major hit. Companies were forced to find alternate freight routes when major roads closed. For example, Coles and Woolworths turned to the rail network to minimise the impact on supermarket shelves.

Predicting and better managing risk

Australia's recent fires and floods are just one piece of the risk puzzle. The pandemic also poses an ongoing risk as isolation rules and lockdowns continue to affect the workforce. Then there are global issues like food fraud, Environmental, Social, and Governance (ESG) regulations, water instability, labour shortages, and energy price spikes. These risks aren’t going away any time soon – making it more important than ever for retailers to plan for major disruptions to the nation’s supply chains.

The good news? There are plenty of ways that businesses can mitigate risk and shore up their supply chain to ensure continuity of supply. For example, this PwC report recommends reducing risk through stockpiling, diversification and contracts. 

Retailers can also take a proactive approach to accurately predicting risks and reacting to them quickly – and digital technologies play a major role here. A centralised platform that captures and analyses all supply chain data can help improve supply chain visibility and enhance monitoring of risk factors while supporting open and ongoing communication with all parties across the supply chain.  The ability to quickly and accurately identify risks will save time and money, which can be spent on proactively managing the areas that require the most attention. 

Accurately predict risks with Greenlight Supplier Management

Muddy Boots’ Greenlight Supplier Management can help your business accurately predict risks in your supply chain and put measures in place to minimise the impact on your bottom line. Our solutions put you in control of your data and your supply chain, showing you exactly who is in your supply chain, where they are, and what they supply you, while an integrated suite of mapping and reporting tools provide a chain of custody insights, helping you track product routes back to the source.

It’s all about defining and managing risks in your supply chain with embedded sourcing criteria, so you can more easily identify areas of vulnerability that require your attention.

For more information on how our solutions can help your supply chain please contact Sean.Verlander@muddyboots.com

Senior Business Development Manager, APAC, Muddy Boots by TELUS Agriculture