Offshoring: When saving a few bucks can cost millions

There’s no doubt that 2020 was an eventful year. The COVID-19 pandemic and its impact on the global marketplace threw a harsh spotlight on the volatility of Australia’s supply chains.

This past year has shown us that the modes of acquisition, distribution and transportation traditionally relied upon, can no longer be considered as always dependable, available or guaranteed for use.

This ongoing volatility has driven many companies to revise their own supply strategies to manage the current volatility, as well as protect against inevitable future disruptions.

How Can Australian-Based Businesses Protect Against Supply Volatility?
The reality is that whilst offshoring can save a few bucks, over the long-term it can cost millions. Not only does it create costs due to disrupted workflow, irreplaceable components and lost revenue, it also denigrates the prosperity and independence the manufacturing sector contributes to the overall economic health of Australia.

This realisation has prompted many companies to look at ‘reshoring’ their manufacturing activities back home to Australia to overcome the current challenges of stock availability, a disrupted global supply chain and delayed freight services.

Plan for Today and Protect Your Tomorrow
Whilst COVID-19 is considered to be a once in a century event, companies should ideally plan their future supply strategy around the assumption of more frequent disruptions. This type of proactive planning will ensure they are better placed to mitigate or manage any future disruptions. And an ideal way to do this is to return to Australian manufacturers.

Back in the 1950s and 1960s, manufacturing accounted for approximately 28% of Australian GDP, and 28% of employment.

Fast forward to today, and while manufacturing remains a vital part of the economy; it is responsible for just 5% of GDP, and only 5.4% of total employment.

It’s time..to go back in time.
The importance of a robust manufacturing industry in Australia cannot be overstated. It’s no coincidence that in times of war and unrest our manufacturing industry was front and centre, sustaining our economy, driving growth and providing Australians and Australian businesses with the goods and services they wanted and needed, without waiting for the rest of the world.

Manufacturing is more than just an industry. It’s independence, self-reliance and the confidence to know that here in Australia; we can take care of ourselves.

Josh Budd
Managing Director
McNeall Plastics