Dealing with supply chain issues in 2022

It’s hard to accurately predict trends and global events – as witnessed with COVID-19 – but one thing that the rest of 2022 is guaranteed to bring is less certainty when it comes to supply chains.

The past two years have shone a light on the fragility of the supply chain, demonstrating that even Australia’s largest construction firms are at risk, with many of the ‘too big to fail’ companies showing us that in today’s climate, no one is too big to fail.

At the centre of this issue is the fact that there is no immunity from the pressures caused by supply chain shock and broader fast inflation.

Supply chain shock is no longer a one-trick pony. It is appearing in nearly every segment of the construction industry, and is particularly affecting copper, aluminium, timber and steel – the very fabric of projects within the industry.

The return of inflation makes price control even more demanding – and strategically necessary. However, simple price aggression often doesn’t provide the right outcomes when the entirety of the supply chain is experiencing inflation.

STRONG RELATIONSHIPS AND COLLABORATION: THE ONLY WAY FORWARD

Genuine partnership is what enables the economics of the supply chain to be leveraged to its highest degree, allowing partners to add value through their skills, or to reduce total cost.

Typically, transparency is not central to procurement policy and can, at times, go completely against the philosophies of the purchaser/organisation. Previously, mystery could enable leverage between two tendering vendors or shift the balance of power from a licensed channel.

In today’s market, strong personal relationships need to be leveraged to provide genuine transparency in total costs throughout the chain. This can then enable the link in the chain to mitigate risk and reduce each tier of exposure.

If this isn’t achieved, the end of the chain will still end up wearing these costs. Today’s market requires collaboration, honesty and the same principles of a joint venture – everyone in your supply chain needs to be successful together.

REMOVING RISK

GPS Trade Australia is a dedicated sourcing and expediting house that uses the best procurement methodology coupled with long-standing executive level relationships to create the best sourcing and lowest total cost for projects.

It is an expert in commodity-centred procurement, hedging risk and providing vetted fall-back vendors in each segment.

GPS Trade Australia’s sourcing and expediting team creates deep value and transparency in a constantly changing, risk-filled procurement space. By offering a complete transparency product, tracking tools, and access to a global preferred supplier network, GPS takes price, transit and regulatory risk out of the hands of its clients.

With contracted ocean shipping slots and tier one air freight routes, along with hybrid models, its clients can access authorised global sourcing channels and years of experience in contract management.

GPS Trade Australia can assist with all procurement needs. To find out more and get in touch, please visit gpstrade.com.au.