Supply issues highlight need for better business resilience strategies

24 February 2022

A CQUniversity supply chain expert is encouraging businesses to improve their resilience strategies as consumers continue to face product shortages.

Dr Imran Ali recently led a global research project and published findings following a national survey of managers working in Australian food value chains' with the results showing that organisations must diversify supply chains to improve their long-term business security.

Dr Ali explained that supply chain issues in recent weeks have not only been a disruptive event for consumers but have also caused enormous issue for suppliers in terms of cost and long-term business survival prospects.

'The COVID-19 pandemic has exposed the vulnerability of our agricultural food (agri-food) systems across the world' which has led to an increase in threat of global food insecurity and malnutrition' requiring more resilient and sustainable agri-food supply chains.

'Our analysis of the survey results has revealed that firms with domestic plus global value chain partners were more resilient than those having only or mostly global business partners.

'Quite simply the findings demonstrate that excessive reliance on offshoring can sometimes become lethal' especially amid unexpected and prolonged global shocks like COVID-19.

'In order to remain sustainable' companies should strike a balance between domestic and global business partners'' said Dr Ali.

'We also found that' in response to the pandemic' the most resilient firms employed three types of dynamic capabilities-”readiness' response' and recovery-”thus ensuring continuity of business operations and competitiveness of their value chain.'

Dr Ali also explained that even though the pandemic has been an extreme global disrupter' organisations' especially those within food value chains' need to continue to develop preparedness strategies.

'While the world has never really experienced a disruption like COVID-19' and it is an extreme example' organisations should still be prepared for future supply chain shocks.

'Supply chains can collapse for many reasons – not just a global pandemic'' said Dr Ali.

'COVID-19 has truly exposed vulnerabilities but events like natural disasters and regional political instability can all impact the availability of products as part of a value chain' especially related to food when one extreme weather events can destroy entire crops or cause lengthy delays when it comes to getting produce into the supply chain.

'Without building strong continuity and preparedness plans related to a multitude of different scenarios' organisations involved in food supply are operating in an environment of extreme risk.

'My advice to these organisations' based on these recent findings' is to prepare plans that will help the business absorb shocks as quickly as possible' so that they can rebound' pivot where required' and minimise long-term impact to remain competitive.'

Dr Imran Ali is a researcher with CQUniversity's Regional Economies and Supply Chains (CRESC) and was been selected by the Food and Agriculture Organization of the United Nations (FAO) Headquarters to serve on the Advisory Group for the State of Food and Agriculture (SOFA) 2021 flagship report.