When all is running well, supply chains operate largely invisible to consumers.
Most of the time the massive choreographed dance of production, ships, ports, rail, trucks, planes, warehouses, couriers, border crossings, delivery systems, and 820,000 Canadians works relatively seamlessly, moving $1 trillion in goods. Your local business either already has the product you’re after or is able to get it to you in short order.
But all that changed in recent years as the words ‘supply chain’ entered our common lexicon as we talked with businesses, friends, and co-workers. We shared the common frustration of not being able to get the products we want when we want them.
Some of what led to these challenges has largely been resolved, like public health shutdowns and closed borders. Like many things, the pandemic accelerated issues the industry was already facing. Meanwhile, the world changed dramatically.
A report titled A time of renewal for Canada’s supply chains from KPMG and the Ontario Chamber of Commerce delves into the challenges facing the industry and how it can get back to invisibly running in the background.
The report notes that current risks for governments and businesses include:
• Chronic underinvestment in supply chain modernization
• Continued risk-laden dependence on single suppliers
• The need to innovate amid soaring goods and services costs
• Evolving and ever-increasing consumer expectations
• Ongoing labour shortages and skills gaps
KPMG’s 2022 Global CEO Survey reveals a total of 55 percent of leaders agreed or strongly agreed that supply chain risks will have an impact on their business over the next three years.
One key area they highlighted is that governments need to collaborate with each other in new ways to reshape supply chain capabilities and mitigate risk in the global digital economy. This includes innovative trade agreements, investments in infrastructure, and the re-orienting of supply chains amid over-reliance on individual nations such as China.
Nearly three quarters of global CEOs agreed that access to capital for new investments in their supply chain is having an impact on their business. The report makes continued references to the need to spend time and money on innovation. Rather than putting band-aids on the current system, we need to take a hard look at new ways to provide consumers with the goods they want.
The industry is moving away from a ‘just-in-time’ to a ‘just-in-case’ mindset. Saving money through single-supplier relationships has made the supply chain rigid, resulting in inefficiency and vulnerability.
The report pushes the need to foster and accelerate digital technology adoption to increase supply chain visibility, become more efficient, manage rising costs, and meet consumer expectations.
There are also issues around people’s expectations. Without some serious investment and innovation, our supply chain is struggling with the flexibility, speed, and reliability necessary to meet the standard that Infinite choice and instant delivery have set.
Like many sectors, the supply chain network is struggling to attract and retain workers with the skills they need. Answers lie in upskilling, reskilling, and automation.
Our economy and the standard of living we have come to enjoy require that the public and private sector modernize our supply chain through innovation and strategic investments. These issues aren’t going away on their own. The time to invest is now.
Read the full report here: https://assets.kpmg.com/content/dam/kpmg/ca/pdf/2023/01/a-time-of-renewal-for-canadas-supply-chains-en.pdf
The Peterborough and the Kawarthas Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community.