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Bird's eye view of cargo ships and containers at a port

How COVID-19 has shone a light on the supply chain and logistics industry

Chances are you’ve never given much thought to how your online shopping purchases arrive in your letterbox, or the complex journey your laptop took to arrive on the store shelf.

But in 2020, the pandemic led to massive shifts in purchasing habits, panic buying, a boom in e-commerce and a devastated airline industry that’s turned supply chains upside down.

So did COVID-19 expose the weaknesses in Australia’s supply chain and freight logistics industry? Or is the pandemic simply a once-in-a-lifetime event no one could have predicted?

A hidden industry now in the spotlight

Dr Hermione Parsons, an industry professor and founding director of Deakin’s Centre for Supply Chain and Logistics, says the pandemic has highlighted the critical importance of supply chains.

Typically, supply chain refers to the integration of all activities involved in the process of sourcing, procurement, conversion, logistics, transportation, regulatory compliance, innovation, distribution, retail and sales.

Has COVID-19 exposed cracks in the system?

Dr Parsons says COVID-19 didn’t exactly reveal cracks in the supply chain and freight logistics industry. ‘What we found was not actually a failing in the supply chain – rather unexpected and burgeoning demand that needed to be met quickly.’

Data from Australia Post showed August broke all Australian online shopping records. In locked-down Victoria, online shopping was up 170 per cent year on year.

‘That’s a huge change in demand, so then Australia Post had to organise new posties, delivery vans, vehicles, rosters, systems – and a much, much larger workforce to be able to deliver all of that product,’ Dr Parsons says.

How could businesses be better prepared in future?

She believes businesses have learnt plenty from this experience, which they could apply if another pandemic or a situation such as a natural disaster hit.

Certainly the preparation will not be to have the whole supermarket filled with aisles of toilet paper. It would be more the understanding of how to very quickly switch into a pandemic type situation.’

'What we found was not actually a failing in the supply chain – rather unexpected and burgeoning demand that needed to be met quickly.'

Dr Hermione Parsons,
Centre for Supply Chain and Logistics, Deakin University

Major logistics challenges are likely to continue

But the devastation hitting the airline industry worldwide, along with geopolitical events and new waves of the pandemic, poses ongoing problems for Australian supply chains, she says.

That product you buy from China (or send there if you’re an export business) would usually travel in the belly of a passenger plane. But without passengers flying internationally, the planes have stopped, and so the opportunity to airfreight imports and exports to and from Australia has also ceased.

Relying on much slower global shipping has huge consequences for Australia’s highly perishable agricultural and fisheries supply chains, Dr Parsons says.

Huge opportunities for graduates

In recent years ‘a confluence of mega trends’ – including rapid advancements in technologies, Industry 4.0 and evolving business models – has modernised supply chains, Dr Parsons says.

However while there’s been plenty of innovation, the male-dominated, ageing workforce itself is crying out for a new pipeline of younger, more diverse talent, she says.

‘We have great need for highly skilled people across many disciplines: mathematics, engineering, humanities, business and law.  More than ever in the pandemic and the new normal, supply chain is about complex problem solving.’

Potential supply chain management jobs

Dr Parsons says there are a huge number of jobs beckoning for graduates with agile minds.

‘You could work in pharmaceutical supply chains and be working the biggest problems confronting our society, such as the distribution of a vaccine worldwide to gazillions of bazillions of people,’ she says. ‘How do you move that around the world, and how do you distribute the vaccine around Australia?

‘Similarly, you could have people who are working in freight forwarding and they’re the ones who are trying to get, say, crayfish – one of our most valuable perishable exports – out to restaurants across Asia.’

Full steam ahead

In coming years, Dr Parsons says one of the biggest challenges will be recreating supply chains in a vastly different world.

‘Let’s say the aviation industry doesn’t get back to normal until 2023.  That means Australia is going to have to sort of take care of itself in terms of all goods, all services,’ she says.

‘There’ll still be global trade, some import and export by ship, but it’s a very different geopolitical world and trading environment to what our world was like a year ago.’

What is certain, though, is the opportunities for those interested in the industry, Dr Parsons says. ‘It’s challenging, there’s no time to be bored and it’s a fabulous career path.’

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Dr Hermione Parsons
Dr Hermione Parsons

Centre for Supply Chain and Logistics, Deakin University

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