There’s no doubt that 2020 was an eventful year. The COVID-19 pandemic and its impact on the global marketplace threw a harsh spotlight on the volatility of Australia’s supply chains. And this has all culminated in widespread calls to onshore our manufacturing industry.
According to Josh Budd, Managing Director of McNeall Plastics, the past year has shown that the modes of acquisition, distribution and transportation traditionally relied upon, can no longer be considered as always dependable, available or guaranteed for use.
“The supply chain issues, which are still being experienced, and perhaps will continue to be for the foreseeable future, have driven many companies to revise their own supply strategies to manage the current volatility as well as protect against inevitable future disruptions,” Budd elaborates. “In fact, we are finding that many industry sectors are aware that, had they relied on Australian manufacturers throughout this unstable time period, they would have been better positioned to weather the impacts of not only the pandemic, but other disruptions to the supply chain too.”
This realisation has prompted many companies to look at ‘reshoring’ their manufacturing activities back home to Australia, to overcome the current challenges of stock availability, a disrupted global supply chain and delayed freight services.
While COVID-19 is considered to be a once-in-a-century event, companies should ideally plan their future supply strategy around the assumption of more frequent disruptions. This type of proactive planning will ensure they are better placed to mitigate or manage any future disruptions. And an ideal way to do this is to return to Australian manufacturers.
Back in the 1950s and 1960s, manufacturing accounted for approximately 28% of Australian GDP, and 28% of employment. Fast forward to today, and while manufacturing remains a vital part of the economy, it is responsible for just 5% of GDP, and only 5.4% of total employment. For Budd, It’s time to go back in time.
“The importance of a robust manufacturing industry in Australia cannot be overstated,” he says. “It’s no coincidence that in times of war and unrest our manufacturing industry was front and centre, sustaining our economy, driving growth and providing Australians and Australian businesses with the goods and services they wanted and needed, without waiting for the rest of the world. Manufacturing is more than just an industry. It’s independence, self-reliance and the confidence to know that here in Australia, we can take care of ourselves.”