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Supply chain issues: can you bring things closer to home?
14 November 2022
Global supply chain challenges are changing the reality of doing business. It’s increasingly tough to source raw materials, supplies, and products in the right quantities. And when your supply chain breaks down in this way, that can have serious consequences for your business.
So how do you combat the supply chain problems, while also tackling the additional issues of increasing costs, rising inflation, climate change, and a forecasted global slowdown? One way is to de-globalise your supply chain, as we’ll explain.
What’s causing these supply chain problems?
It doesn’t take much to throw a spanner in the works of a smooth-running supply chain. A scarcity of a particular raw material or ingredient can quickly de-rail an efficient chain of supply, causing delays to deliveries, raising demand, and pushing a rise in prices.
We are currently facing a perfect storm:
- The COVID-19 pandemic – very few industries were prepared for the massive impact of the COVID pandemic. Many sectors and key industries were forced to shut down completely. Staffing levels dropped as employees fell ill. And a large number of businesses were faced with falling revenues and poor cash flow. Some sectors are still not functioning at full capacity, which is holding back production and slowing down deliveries.
- The problem of globalisation – cheaper air travel and improved freight conditions for shipping has turned the world into one giant global market. You can buy bananas from Costa Rica, lamb from New Zealand, and gas from Russia. During normal conditions, this works fine. But faced with the growing threat of climate change, and the huge carbon footprint of a global supply chain, global exports are no longer a sustainable option. To combat this, many sectors are aiming to de-globalise their imports and exports – but the infrastructure that’s needed for a whole industry to de-globalise won’t appear overnight.
- Geo-political issues in key territories – with so many global supply routes still in place, any unexpected geo-political changes can have a profound effect. The Ukraine/Russia conflict may have been brewing for years, but no-one was expecting out-and-out war. This terrible conflict is costing lives, but it’s also having a damaging effect on world trade. As a major supplier of oil and gas, sanctions against Russia are pushing up energy prices. And with Ukraine being a key exporter of corn, the Russian blockades in the port of Odessa are reducing grain supplies and pushing up prices.
In business, we crave stability. Uncertainty, and surprise threats, are the enemy.
A move to local supply chains and greener operations
De-globalising your supply chain and ‘going local’ with your providers is one key option.
By de-globalising your supply chain you can:
- Switch to local suppliers – review your current supplier network and gauge how reliant you are on international and overseas providers. Where possible, build a local supply chain that removes some of the key problems of being reliant on an international supplier network.
- Cut down on delivery times – If you can find suppliers who are based closer to you, you might be able to cut down on delivery times, and speed up the efficiency of the whole supply chain.
- Reduce the cost of logistics – shipping, air freight, and logistics costs can all be slimmed down if you’re working with a local supplier. The additional logistics costs of being part of a globalised chain can be significant. Choosing a local supplier removes some of these costs entirely, and reduces your main delivery expenses.
- Simplify your tax and customs costs – When you import and export across borders, you’ll almost certainly find yourself paying customs fees, and some form of goods & services tax (GST) or value-added tax (VAT). If you can find a national supplier within your own region, you simplify the whole customs and excise process, and reduce your liability to cross-border taxes too.
- Reduce your carbon footprint – one of the big drivers of going local is the business focus on becoming greener and more sustainable. By going local, you reduce the air miles that your supplies cover. This cuts back your logistics-driven carbon footprint, and helps you meet your sustainability targets. Which is good for marketing too!
Talk to us about going local with your supply chain.
Dismantling your existing supply chain is a big task. But after a decade or so of ‘offshoring’, it might be worth looking at options to bring supplies and production closer to home.
The end of the financial year is fast approaching, so if you’re balance date/end of financial year is 31 March, there are a few things you need to do to help us prepare your financials. Take a stocktake If your business sells products or has stock, you’ll need to do a stocktake on 31 March. If you’re a business that sells products, then you need to take a stocktake of your physical inventory. If you’re a farmer, then you need to take a physical livestock tally. Send in your EOY papers Compile a folder (digital or hard copy) with a copy of the following documents: Bank statement that shows the balance on 31 March 2025 for all your bank accounts and loans. Insurance invoices. ACC invoices. Loan statements for the year (if applicable). Any new loans or refinancing documents. Invoices for assets purchased and sold. GST workings and reports. Submit the online questionnaire You’ll also need to fill out and submit the online questionnaire. You should receive an email from us in April/May, with a link to fill out and submit the questionnaire. If you haven’t received an email with the link by the end of May, let us know.
At Gunson McLean we are more than just a business offering financial expertise we also support our communities in Dargaville and Whangārei. By partnering with various local organisations, we help sustain and strengthen sports, recreation, and community initiatives in the region. Empowering Local Sports Clubs We understand the role sports play in bringing people together, promoting teamwork, and supporting youth development. We are proud to sponsor the Old Boys Marist Rugby & Sports Club, Hikurangi Rugby Football Club Inc, Maungakaramea Hockey Club, Maungakaramea Bowling Club, Mid Western Rugby Squash Club, Kamo Rugby & Squash Club, New Zealand Vikings Rugby Football Club Inc., and the Cobham Cricket Club. Promoting Outdoor Education We also believe that outdoor education is essential for youth development and are proud to work with the charitable trust, Pātaua Outdoor Education & Recreation Trust (POERT). We have been closely involved in the Trust’s activities for the past 8 years – handlings its financial matters – and Craig Gunson is the current Treasurer. Backing Community Halls & Facilities We’re proud to support the Whareora Hall Society and Whareora Cemetery Board as well as local cycling and motorcycling groups Marsden Wheelers Cycling Club Inc., and the Whangārei Motorcycle Club. We are passionate about the causes we support, and the opportunities and growth this enables in our Dargaville and Whangārei communities.
Most people agree that optimising your business is a good idea and spend hours looking at optimising the supply chain, storage, overheads etc. However, they forget that people are one of the most critical elements in your business. By providing a caring, supportive workplace for employees you also drive the success of your business. Studies show happy workers are productive workers and, as an employer, it’s a no-brainer to provide a workplace where employees feel valued, and where they can flourish. Here are five key ways to build employee relationships, nurture your team, and create a great workplace for your employees: 1. Invest in your employees This doesn’t mean ‘casual Friday’s’ or a pizza night once a month. This is about offering your employees access to training programmes, workshops, conferences, and mentorship programmes. It’s about the professional growth of your employee and how you can enhance their skills and make them feel truly valued as team members. 2. Create a positive work environment Creating a positive work environment is about cultivating a workplace culture that feels positive and supportive of your employees. Be open and transparent with your employees, listen to their feedback and have a strong focus on employee wellbeing. This could include offering flexible working arrangements, benefits such as health insurance, and other perks. 3. Recognise and reward your employees When an employee goes above and beyond, make sure your recognise and reward them. This could by through a performance bonus, employee-of-the-month programmes or even extra time off in lieu. Feeling valued comes partially from feeling rewarded and can be an amazing motivator. 4. Give employees autonomy One of the key ways employees feel trust, is by being given autonomy. Being trusted to come up with their own solutions, processes, and ideas is key to making people feel as if they ‘own’ their role. This helps employees feel fully involved and also brings new ideas, solutions, processes, and efficiencies to the table. 5. Put wellbeing at the heart of your culture Life is stressful. And work-life can be stressful. A well though out wellbeing programme can help your employees manage stress and, in turn, benefits your business. A wellbeing programme is different for each business but some ideas could be checking in with team members, creating a ‘ask for help’ culture, flexible working arrangements including work-from-home days, and offering mental health support. Making sure you’re a caring and supportive employer is vital to your business strategy. With a team who feel valued, nurtured, and encouraged, you’ll all be happier and more productive.
To discuss all your account matters please call us on 09 438 1001
