Geo-political tensions fuel supply chain disruption and innovation

New research has revealed investing in technology and innovation will be key to resilient and sustainable supply chains.

Research conducted by Asialink Business has pinpointed pandemic impacts, geopolitical tensions and rising shipping costs as main factors to the unprecedented strain on supply chains.

The report, supported by Toll Group, analyses the structural pressures on supply chains and argues that technology, innovation, and e-commerce will be key to building sustainable and resilient supply networks.

Supply chain uncertainty has hit small business hardest, with 32 per cent of small businesses surveyed saying restrictions on business could threaten their operations, compared to 15 per cent of medium-sized businesses and eight percent of large businesses.

Peter Varghese AO, Chair of Asialink, says extreme weather events have also put supply chains under global strain.

“To remain competitive in our increasingly competitive region, business will have to invest more in resilient and sustainable supply chains to meet the shifting needs of customers in Australia and internationally,” he says.

Thomas Knudsen, Toll’s Managing Director says businesses are already taking steps to adapt.

“Businesses face a challenge to transform legacy supply chains for the future. But we also have a unique window of opportunity to reorganise and become more adaptive and inter-operable with partners in the region,” Thomas says. “With supply chains across Asia fundamental to businesses in Australia and beyond, agile planning is critical to future business success.”


The research identified a trend towards moving production back home or into nearby countries, diversifying suppliers and boosting inventory. Onshoring is particularly appealing to small business, with 30 per cent of those surveyed considering it as an option to improve their resilience.

To equip for future challenges, Asialink says businesses need to understand and respond to this trend, along with three other major transformations:

Driven by Asia’s e-commerce boom, consumers expect their goods delivered more quickly and reliably than ever. Businesses will need to understand, meet, and exceed customer expectations that are shaped by a diverse range of platforms across the region.

The research found that adoption of new innovation and technology – such as the Internet of Things, data analytics, artificial intelligence (AI) and Machine Learning – are critical to supply chain transformation. Australian business needs to accelerate the uptake of technologies that impact their supply chain or risk being left behind.

The survey revealed that 27 per cent of medium business, and just 13 per cent of small business are investing in AI for supply chains, compared with 42 per cent of big business.

Download the report here.

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