Why Australia is Trickier than you Think

Australia has a reputation as a fairly well-organised country where things tend to work and services are well-developed.

In many respects, that is true. But when it comes to developing an efficient supply chain, it can be far more complex than many multinationals think.

Size Matters

Australia is as large as Western Europe, but with just a fraction of the population. There are roughly 3.5 people per square kilometre there, compared with 33 in the US and 337 in Japan. Most of them (around 70 percent) cling to the east coast.

All that empty space can complicate things. Volumes of goods to be transported tend to be small, but the distances they need to travel are great. This translates to high costs, and the situation is made worse by a fragmented freight market and bottlenecks in the major cities.  

The Australian government is currently working on a strategy to improve the country’s supply chain and infrastructure to accommodate its growing commercial needs. But by their very nature, these are large projects; this problem won’t be fixed overnight. 

Mostly an import market

Labour is comparatively expensive in Australia. Fewer companies are manufacturing there due to this. In fact, the manufacturing workforce declined from 900,000 to under 700,000 between 2011 and 2016. For multinationals, the continent is more of a place to sell rather than to make products.

Fragmented freight

Once products are in the warehouses, distribution is often surprisingly messy. A single delivery between a major city and a small town might involve four separate carriers. Four. That’s because many freight operators specialise in a particular region or focus only on a specific set of offerings; it’s not uncommon for companies to hire different third-party logistics partners in each major city to handle their import needs.

This has made an Australian supply chain manager’s job increasingly difficult in recent years. Instead of dealing with just one or two suppliers, he or she might be required to deal with different third-party warehouse operators and dozens of freight operators—all for one single shipment.

Logistics headache

For any supply chain professional, this is likely to create an enormous headache. When Australia was more of a manufacturing base (which peaked around the 1960s), supply chains tended to be much simpler. But over the past few years, supply chain professionals now have to toggle their attention between multiple third-party providers.

These third-party providers might have their own helpful web-based portals, but dealing with each individually can make it a very tedious job.

The help you need

If your company is thinking about entering the Australian market, or even if it is already present there, you might want to consider bringing in some specialised help. The small population coupled with the vast distances and a fragmented freight market makes Australia a far trickier place to do business than many companies realise. These experts can bring better efficiencies for your company in the Australian market, without the headache.

With a control tower, you will have full visibility of your entire supply chain at any time. This will allow you to more effectively manage your third-party providers and immediately identify any problems arising from inefficient or sub-par processes. Real-time data from a control tower also ensures minimal disruption to your supply chain. For example, the system is able to provide alternative transportation routes in the event of a natural disaster resulting in road closures. A control tower makes everything a little easier.

Improving efficiency of processes and overall productivity while reducing costs and attention to management tasks for you, a control tower could be your answer for a hassle-free business in Australia.

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