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HomeNEWSHow good are New Zealand businesses’ supply chains?

How good are New Zealand businesses’ supply chains?

Managing director of Foodstuffs NZ Steve Anderson says the Ebola epidemic served as a catalyst for reviewing its supply chain practices.

“At the bottom of the world and geographically isolated from major import and export markets, New Zealand’s supply chains are fundamental to our country’s economic success, yet how much do we think about this?” he says.

He says they wanted to investigate if businesses based here could be more resilient.

Strategists Roger Dennis, Wendy McGuinness and Rick Boven wrote the report.

It raises questions about what would happen in an emergency, and what New Zealand could learn from the Ebola outbreak.

Issues include: How long will it take for supermarkets to be emptied? Will petrol pumps have long queues? Will vital staff become sick? Will key equipment lie stranded on the other side of the Pacific as New Zealand deals with a crisis?

A handful of businesses that rely on international supply chains for exporting or importing were interviewed.

The ones picked were viewed as leaders in their markets, which represented a cross section of New Zealand industries.

Companies interviewed include Air New Zealand Limited, Skope Industries Limited, Vector Limited, Fonterra Co-operative Group and the sponsors, Z Energy and Foodstuffs Limited.

The companies varied in preparedness – some were well prepared, some were not.

The report found the supply chain for oil is strong globally, but one expert said that the oil industry in New Zealand is reliant on “things going well” and has underinvested in storage.

Another finding is that disrupted shipping routes and timing will have a large impact that could create chaos for New Zealand.

The report says a pandemic could slow down international shipping through requiring quarantine periods for crews in overseas ports.

One of the businesses interviewed had a cargo destined for a West African port in 2014.

The process is usually over within three days, but the Ebola outbreak meant the ship was placed in quarantine.

The entire process was finished within three weeks, highlighting how a supply chain is delayed when an emergency happens.

What was gauged from the report is that there is dependence on international infrastructure and too many skills delegated to a few people within companies.

It also found that New Zealand wouldn’t be a priority in the global scheme of things, as it’s a small and isolated country.

If global supply chains are interrupted, it might be one of the furthest down a queue of customers for critical supplies.

Anderson says Foodstuffs and Z have released the report into the public domain to create further the conversation around supply chains and encourage others to improve their practices.

Read the full report here.

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