Think Global, Link Local

An Expert's View about Supply Chain in Australia

Posted on: 19 Apr 2010

No matter how far the international supply chain stretches, for our exporters it will only be as strong as its weakest local links. Ian Murray has a few suggestions for fixing these threats to export opportunities

EXPORT EX-FILES THINK GLOBAL, LINK LOCAL NO MATTER HOW FAR THE INTERNATIONAL SUPPLY CHAIN STRETCHES, FOR OUR EXPORTERS IT WILL ONLY BE AS STRONG AS ITS WEAKEST LOCAL LINKS. IAN MURRAY HAS A FEW SUGGESTIONS FOR FIXING THESE THREATS TO EXPORT OPPORTUNITIES Where are the opportunities for growth in Australian export and an important role, does the Australian internal supply chain meet what hurdles need to be cleared to make them happen? This international standards? With forecasts showing freight volumes question was put to me recently and, trying to think outside the doubling by 2020, road freight doubling by 2015, and with Prime box and going down the obvious IT and services route, what came Ministerial inquiries into infrastructure, I think we know the answer. to mind was the enormous changes to international manufacturing If our exporters are to be competitive we need an equally and the massive improvement to the global supply chain. Together, first-class supply chain within Australia. That means that we need to I believe, these two things play an equally important role in allowing embrace the growth of large publicly listed transport and logistics more countries to participate in the export of component parts. operations including international equity partnerships or even It probably started with the emergence of the European ownership. We need to support mergers between providers within Economic Union. Prior to its introduction, it was common for the Australian supply chain, like Toll and Patrick, and we need international companies to have manufacturing facilities spread substantial investment in infrastructure, including rail which has across a number of countries. Many of these manufacturing plants been ignored for years. Just as importantly, Australian governments were small, probably inefficient, and substantial users and absorbers at all levels must embrace the Auslink national strategy and work of valuable capital. When the tariff barriers came down, many together to achieve outcomes which are in the best interests of companies created ?centres of manufacturing excellence?, resulting business and economic development. in minimising costs and capital while maximising productivity. At At the same time, our manufacturing community needs further the same time, two or three other factors came into the equation, encouragement to seek out opportunities in the international namely the development of better supply chains (within Europe and supply chain. While it?s not uncommon for Australian companies internationally), more concentrated and better managed freight to participate in these export sectors, the opportunity is probably forwarding operations and an increased level of outsourcing. not top of mind for many within our manufacturing sector. Those What possibly emerged in Europe has now, with the advent Australian companies that have had success are often those that of lower barriers and trade agreements, become quite common. can identify a niche, which may well be significant in Australian Centres of manufacturing excellence are certainly more terms but too small for US or European competitors. commonplace than they were 10 or 15 years ago. Supply chains, Clearly, outside of Australia the international supply chain is too, are better managed through large international freight strong and statistics support the fact that more outsourcing is forwarding and logistics companies (who are more than capable of occurring. What we need to do is look seriously at our internal managing the process) and outsourcing is continuing to grow. supply chain, encourage the growth of larger, more efficient This means Australian companies are better placed than ever transport and logistics operations, and focus the infrastructure to become component part suppliers to a wide range of industries expenditure on meeting the needs of business and not a series throughout the world. However, while the world has moved rapidly of parochial agendas. towards well managed, integrated supply chains, with mergers between forwarding, postal, freight and logistics operations playing * Ian Murray is executive director of the Australian Institute of Export 6 I AUGUST 2006
Posted: 19 April 2010

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