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ASCM Insights

How Australian Supply Chains Stretch and Swerve

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Australia is famous for its distinctive wildlife: kangaroos, koalas, emus, quokkas — and, of course, its record-breaking number of snakes. In fact, the country is home to 20 of the 25 most venomous snakes in the world, including all of the top 10. But what’s really interesting is why this is the case. Turns out, it’s a story of resilience.

While other continents have many snake species, Australia’s snakes belong to almost entirely one group, elapids. They all evolved from a single venomous ancestor, and all inject their prey from hollow, fixed fangs. Louise Gentle, senior lecturer in wildlife conservation at Nottingham Trent University, explains: Imagine a group of snakes that uses venom to kill their prey. If they all had venom of the same potency, they would only be able to kill prey of a certain type or size. Eventually, the food would run out. But if a snake adapts to produce venom that is slightly more potent, it will be able kill prey that others cannot. It will eat more food — enough to survive and reproduce.

This unique brand of Australian resilience extends beyond snakes. A new study shows that Australian supply chains are exceptionally strong and have minimal vulnerabilities. After the supply chain interruptions of the past 18 months — logistics and transportation issues, trade restrictions, and panic buying — as well as severe bushfires and floods, the Australian government’s Productivity Commission was asked to examine any supply chain risks that could affect the economy and the wellbeing of its people. The commission found a significant amount of diversity among its sources of imports and customers of exports.

Only 5% of its imported products come from concentrated sources. Similarly, the majority of the nation’s exports are sent to a variety of markets, which gives suppliers alternatives, should risks arise in one market. For example, when China blocked Australian shipments of coal last year, suppliers found other buyers. By March, the value of coal exports had returned to predisruption levels.

Furthermore, Australia’s shipping sector has been particularly resilient during COVID-19. Most port operators and other maritime shipping services continued to function during the pandemic, something that’s critically important for an island nation.

The report found that the most resilient Australian supply chains applied the following risk-management tactics:

  • Understand the nature of the potential disruption, including its likelihood and the size of impact.
  • Don’t disregard low-probability risks or those that are difficult to estimate, as they can have broad implications.
  • Understand the various stages of building supply chain resilience — from prevention through recovery. Then, address risks across several stages.

“A combination of strategies used at different stages is likely to be the most effective approach to managing risks,” the authors state. “Some will perform better under different types of disruptions and contexts.”

Rissssk-management at your fingertips

The operational excellence section of ASCM’s digital library features innovative supply chain risk management content from thought leaders across the globe. Take a closer look at the complexity of the global supply chain and real-world strategies to improve performance and sustainability. Explore how risks throughout our global networks affect your own organization, and learn how to plan proactively. And prepare your supply chain for the inevitable by establishing a comprehensive risk-management playbook today.

ASCM members can access all kinds of supply chain knowledge through the digital library. Browse each of the categories to discover best-in-class content about end-to-end supply chain management, transportation and logistics, operations management, benchmarks, and much more.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer at ASCM, the largest nonprofit association for supply chain and the global leader in supply chain organizational transformation and innovation. Prior to this, he was the managing director for the Operations Consulting Group of American Express Tax and Business Services. His leadership roles have included project management, business process redesign, and individual and organizational alignment. Eshkenazi may be contacted through editorial@ascm.org.

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