CCBR Business Review

10 Managing Supply Chain Risk in the Post-CovidWorld IN LATE APRIL, Central Coast Industry Connect, on behalf of the Central Coast Hunter Supply Chain Forum hosted a seminar at the University of Newcastle Ourimbah Campus for manufacturers and logistics operators titled Managing Supply Chain Risk in the Post-Covid World presented by Tim McLean, one of Australia’s most respected manufacturing and supply chain practitioners and thinkers and Principal of TXM Lean Solutions. The Covid 19 pandemic has brought the most dramatic disruption of supply chains since the Second World War with the long tail of this disruption likely to last for at least another two years. However, beyond Covid, it has highlighted the vulnerabilities in global supply chains and the importance of understanding and managing supply chain risk. A 2020 global study of supply chain managers highlighted that well before the pandemic, major disruptions that interrupted supply for more than one month were occurring every 3.7 years. Tim McLean’s presentation discussed the challenges facing modern supply chain managers and offered effective strategies to manage and mitigate supply chain risk. The disruption brought about by the Covid 19 pandemic while severe was not the first. Disruptions caused by: World Trade Centre Attacks 2001, Sars epidemic 2003, Hurricane Katrina 2005, Fukushima nuclear disaster 2011, Failure of the Hanjin Shipping Company 2017 China-US Trade War 2018, Brexit 2021 and now War in Europe have alerted US and European companies to the frailties of the global supply chain. Mr McLean highlighted the cost of being out of stock for one month and the time it takes to make up lost margins. “What drives supply chain risk? • Replenishment lead times, • Source country risk • Robustness of logistics in supply chain, and • Diversity of supply. So, the question is; What steps are you taking to reduce your risk? With some of the answers being: • Long term thinking – at least two years, • Understanding your extended value stream and identifying vulnerabilities, • Reducing lead time – vertical integration, onshoring, closer suppliers, • Buying small frequencies more often, • Establishing longer term service level agreements with suppliers providing longer term certainty of demand, and • Putting in place limited strategic stock for known vulnerabilities. In other words, don’t wait for the shortage to occur. Mr McLean said that while manufacturers in the United States and Europe had identified these risks due to disruptions that had occurred over the past twenty years and had taken steps to mitigate their supply chain risks by onshoring and introducing strategies to avoid disruption, Australians had put their head in the sand and ignored all the signs. Covid 19 and now the war in Europe has left Australian manufacturers and businesses that chose to rely totally on imported products to now feel the pain. Mr McLean pointed out that business needs to take a holistic view vis-a-vis cost savings and margins over the longer term. He was then joined by Wayne Dicks , CEO of TrendPac and Andrew Borg, Supply Chain Director of Mars Food who discussed how they adapted their supply chains to deal with Covid and what they are doing to manage risk into the forward, which was in line with Mr McLean’s presentation. The supply chain disruption this time around will be permanent and require all businesses to rethink their cost of doing business. M A N U FA C T U R I N G N E W S CCIC Chairman, Frank Sammut said, “I am pleased to announce the National Australia bank have recently become a major sponsor to Central Coast Industry Connect Limited and its clusters. As a not for profit organisation we rely heavily on sponsorship funds to enable to supplement our other funding sources to be able to support the work we do for our local manufacturers. The NAB have been an active member of CCIC for a number of years and when the opportunity arose to be a sponsor, they were keen to be able to step in and support us. More to come on this announcement next month. TXM Principal Tim Lean speaking to members of the Hunter Central Coast Supply Chain Forum in April NAB joins CCIC as a major sponsor Central Coast Industry Connect Chairman, Frank Sammut with Tiffany Morgan NAB Managing Partner Hornsby Central Coast and NAB Central Coast Senior Business Banking Manager, Kevin Ure HMA Launches Manufacturing Awards for 2022 The 2022 Hunter Manufacturing Awards Inc. (HMA) will hold its annual gala awards’ event at NEX, King Street Newcastle on Friday 28th October 2022. Fourteen categories will be available for application which includes the re-introduction of the Apprentice of the Year - Manufacturing award category. The Launch of the 2022 awards program was held last night on the premises of the 2021 Manufacturer of the Year – 50 Employees or More, Molycop and was co-hosted by Brain Industries, the 2021 Manufacturer of the Year Less than 50 Employees winner. CENTRAL COAST BUSINESS REVIEW JUNE 2022