As Australian manufacturers continue to find their feet in the ‘Asian Century’, the importance of innovation and working smarter, not harder to remain competitive has been pronounced by industry leaders and government officials alike. One key business area that is seeing a fundamental shift in outlook is within procurement and supply chain management.
The Productivity Commission has found that Australian manufacturers, not only have high labour costs, but also “suffered from high logistics costs”. With components sourced from overseas suppliers, manufacturers are often subjected to long supply chains (Loussikian, 2013). This not only affects productivity, but long-term costs associated with poor procurement processes such as wastage and high levels of energy consumption. Successful procurement involves a holistic approach, leaning on stable supplier relationships and local knowledge.