Sluggish shipping, rising costs, and overworked staff are among near-term pressures facing New Zealand’s supply chain, according to a recent risk outlook survey.
Massey University’s mid-year risk outlook review was based on the feedback of 140 supply chain practitioners with a focus on New Zealand’s supply chain risks.
The survey also took into consideration feedback from an online webinar and panel discussion led by experts in the field. It reports on the upcoming risks to New Zealand’s supply chains for the remainder of 2022 and into 2023.
The general outlook for supply chains for the rest of the year and into 2023 is 50/50 split between a positive and a negative outlook, it reports.
Respondents pointed to the continual impact of COVID-19 (especially in China), the war in Ukraine, inflation, stagnation, and emigration as major factors impacting current supply chains.
“Some of the main risks identified by participants include attrition of supply chain staff, continuous challenges in shipping, financial weaknesses, and a reduction in import volumes. Inventory levels may also pose significant issues in the near future,” the report says.
Many risks to the local supply chain could “reach a peak” over the upcoming summer and autumn months.
This includes container shortages driven by reduced imports and the country’s seasonal export patterns.
The upcoming months could also see a rise in costs and disruptions driven by winter energy demands in Europe and “higher likelihoods” of COVID transmission in China where a zero-COVID policy is still maintained, it says.
The survey also points to the risk of many supply chains, especially imports into New Zealand, facing the risk of a “bullwhip event”.
“There is currently a global switch over from limited supply to limited demand.
“Sluggish shipping has reduced supply chain responsiveness and increased the need to carry more stock.
“However, an economic slowdown may turn high inventory levels into a liability. At the same time, upstream suppliers may experience quiet times, challenging cashflows and creating problems with business viability,” it says.
*Click here to read the full report.
