Written by: Phil Sealy – The Pro Forum Community of Practice

With the recent updates to the Commonwealth Procurement Rules (CPRs) that came into effect as of 1st July 2024, the importance of analysing the supply chain is now more prevalent in procurement than it once was when considering the processes involved with acquiring goods and services.

During the recent post-COVID years, there has been more focus on understanding the supply chains better, when businesses and everyday Australians have been feeling the effects of constant supply chain problems that have impacted on industries such as construction and the food and beverage industry.  Although natural disasters and outbreaks of infectious diseases have direct and consequential impacts on any supply chain, these impacts are outside of the control of any business and are often unpredictable on when they are likely to occur and how it may impact on the supply chain.

The impacts that are within the control of a business is knowing where a product comes from, how it was produced, and what materials are used to produce the product that can be analysed to determine the ethical nature of that product.  By analysing the current marketplace and the supply chains that produces the products and/or services that a provider sells, will ensure the supply chains are resilient and reflects on the performance of the goods and/or services delivered to their customers.  When performing analysis on the supply chains, it is important to note that they are vulnerable to stresses, both internal and external factors may cause stress to the supply chain and may pose as a risk to the effectiveness of the supply chain.  An internal stress may be caused by inaccurate forecasting that impacts on the lead time, production time and logistics to ensure the product is produced when it is needed.  An external stress may be caused by changes in economic conditions, political instability and changes to the environmental factors, such as natural disasters.

Although supply chain stressors pose significant challenges to businesses today, the best way to ensure the supply chains are robust is to exercise effective risk management to be one step ahead of any issues that may arise and minimise the impacts to the business.  It is also worth noting that organisations should take these obstacles as an opportunity to adapt to the changing environment and to become more agile in the long term.

 

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