SMEs seek more Australian suppliers in supply chain resilience plans
More than a quarter (28%) of Australian SMEs plan to add new domestic suppliers in preference to international suppliers in the next 18 months to build greater supply chain resilience, with small SMEs (32%) leading the way.
In further good news for Australian manufacturers and suppliers, 21% of SMEs plan to cut ties with international suppliers in 2023-24 to support local products, services and jobs.
The findings are contained in the latest round of the bi-annual SME Growth Index by ScotPac, Australia’s leading non-bank business lender.
Other key measures Australian SMEs said they planned to implement to guard against future supply chain turbulence included:
- Securing more flexible trade / supply chain funding arrangements (54%)
- Getting closer to key suppliers and customers (52%)
- Focusing on key inventory items and removing others (36%)
- Stocking up more inventory in specific areas (26%)
- Switching from Just-in-Time to Just-in-Case inventory management (22%).
ScotPac CEO, Jon Sutton, said the global supply chain challenges of the past three years had sharpened the focus on inventory management for all SMEs, and improved the outlook for Australian suppliers.
“Disruptions and challenges caused by events like the COVID pandemic, political conflicts and rising inflation have become the new normal for business owners,” Sutton said.
“It is clear from the well-considered strategies SMEs have outlined in response that a growing proportion view strengthening supply chain resilience as a core business planning priority, rather than a reactive event.
“That is also reflected in the surge in demand for ScotPac trade finance facilities in the past 12 months as SMEs have sought greater purchasing power to support their trade needs and opportunities, both domestically and internationally.
“It highlights the fact that access to fast and flexible finance will always be one of the best tools any SME can have at hand to mitigate supply chain shocks.”
Sutton encouraged business owners to talk with their brokers or advisors to ensure finance is part of their supply chain management strategy.
“Whether it is trade finance to better manage the flow of goods, or asset finance to buy equipment when you need it, ScotPac has the greatest breadth of products to help more businesses in more circumstances than any other lender,” Sutton said.