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DISRUPTION THREE WAYS On the supply side , factories have been operating at reduced capacity due to closures and lockdowns . This is especially tricky because Australia isn ’ t a manufacturing centre , and relies heavily on the whims of overseas suppliers and the countries in which they operate .
China ’ s much-maligned zero-Covid strategy – which aims to stamp out every outbreak , whatever it takes – has had a huge effect on supply , explains Assoc Prof Thai . “ The zero-Covid policy has a very negative impact on the capacity of factories because if they discover an infection case , they either close it or reduce the capacity substantially .”
Demand for goods has been incredibly topsy-turvy throughout the pandemic . It fell appreciably in the early stages when people were unable to work , before bouncing back big time as lockdowns were lifted . In particular , a global shortage of microchips – found in everything from rooftop solar cells to phones and cars – has resulted in huge disruption for contractors .
“ When Covid hit , the demand for certain electrical appliances reduced , so the manufacturers reduced the capacity of production ,” says Dr Pournader . “ When the demand started to bounce back , there was this huge surge in demand for cars and other electrical appliances . There ’ s a tsunami of demand waiting at the door of the microchip manufacturers , and it will take time for them to respond to that .”
Logistics – shipping , to be precise – has perhaps experienced the most disruption out of the three . Travel restrictions and border closures , at best , increase waiting times and , at worst , block access for ships at major ports around the world . The result is a backlog of shipments and containers waiting to be delivered .
China ’ s Ningbo-Zhoushan was the world ’ s top cargo handling port in 2021 , but when a port worker tested positive for Covid-19 , authorities closed the terminal for two weeks .
“ No export containers could be loaded onboard the vessels , and no import containers could be discharged from the vessels to the port because no one was working at the terminals ,” Assoc Prof Thai says . “ The ships were stuck and they could not go back to Australia .”
DEVELOPING PLAN B As for when global supply chain disruptions are likely to ease , no one knows for sure . “ Unfortunately , with the problems that we see in supply chains , they are unlikely to be resolved very soon ,” Assoc Prof Thai says . “ My optimistic guess is we will not see any big improvement until June or July , but it may go further – possibly until early next year .” Dr Pournader agrees early 2023 is a safer bet .
In the meantime , Assoc Prof Thai recommends contractors plan ahead , order early and consider alternative suppliers . “ Think about diversifying supply , rather than relying too much on only one or two suppliers or supply markets .”
Dr Pournader recommends setting up an informal ‘ pool of inventory ’ that keeps track of excess goods . “ You might have an excess of a specific type of inventory that you might not have an immediate use for and then you can sell it or share it with your competitors or your peers .”
She also says buying higher-quality materials will result in fewer faulty materials , which means you won ’ t have to maintain more inventory to make up for the duds . “ A better way of making sure that you will have enough supplies is to make sure that you have less defects in your supplies and better quality control .” n
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