New Zealand is extremely depending on trade, especially sea routes, which give a lifeline for exports and imports. Key sectors akin to agriculture, construction and wholesale and retail trade are highly depending on this global network.
External events can seriously disrupt the flow of products, delay deliveries or damage critical infrastructure.
However, a crisis like the COVID pandemic may disrupt business commitments to sustainability goals akin to reducing greenhouse gas emissions, minimizing waste and improving resource efficiency.
This is very important because over the last decade, several large New Zealand firms have introduced sustainability measures into their operations.
Fonterra, for instance, has adopted low-carbon logistics and distribution practices. Zespri uses blockchain technology to improve transparency of its sustainable practices and improve tracking throughout its supply chain. Air New Zealand works with local suppliers and undertakes initiatives to reduce carbon emissions.
in ours recent researchwe reviewed 287 studies on supply chains. We’ve identified key tensions between efficiency and sustainability, and how major disruptions to supply chains and operations can disrupt the balance between them.
On the one hand, firms are under pressure to maintain lean and lean operations. On the other hand, the need to build resilience and sustainable development is increasingly recognized, especially in the face of climate change.
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Traditional strategies
New Zealand’s supply chains are vulnerable to disruption from natural disasters (akin to earthquakes and floods), geopolitical tensions and global health crises.
Historically, firms have responded in a wide range of ways: by diversifying suppliers, increasing inventory buffers, and securing alternative transportation routes.
The use of technologies akin to radio frequency identification has played a key role in tracking goods throughout the supply chain. Provides real-time visibility and accurate inventory management.
Blockchain is becoming a key tool to ensure more sustainable supply chains. This technology uses a digital ledger to keep information secure and easier to track.
However, continued technological innovation can leave people and businesses at an obstacle with limited resources and opportunities in the supply chain.
Implementing a circular economy
During the pandemic, businesses have experienced shortages of key supplies, delivery delays and demand fluctuations. This forced them to temporarily abandon long-term sustainability strategies in favor of short-term survival tactics.
It made sense from a business standpoint. However, to build more resilient and sustainable supply chains, firms will need to transcend traditional strategies.
Our research shows that incorporating circular economy principles into supply chain management may help create a buffer for businesses.
The circular economy model focuses on minimizing waste – keeping products and materials in use for so long as possible. It also focuses on regenerating natural systems to support economic, social and environmental resilience.
Companies can reduce their dependence on external supply chains by specializing in material reuse, creating closed-loop systems with regional partners and improving existing technologies.
By fostering stronger connections with local suppliers and specializing in regional sourcing, firms can reduce their exposure to global risk. This may even help build more self-sustaining supply chain ecosystems.
Building sustainable supply chains requires investing in advanced technologies akin to blockchain and artificial intelligence. However, the implementation of those technologies needs to be done fastidiously and in stages to minimize disruption. Taking things slowly may allow all supply chain partners to be included in these technological changes.
The way forward
The way forward for New Zealand’s supply chain is dependent upon greater collaboration between all parties involved, including businesses, policymakers and communities.
In practice, this implies working together to build systems that usually are not only efficient and cost-effective, but in addition resilient and sustainable.
Similarly, resilient supply chains require regional production ecosystems. To reduce the risks arising from disruptions in the global supply chain, it’s crucial to support local production, even when production costs at sea are lower.
This would require government support and strategic investment in regional manufacturing innovations.
While New Zealand’s supply chains face significant challenges, there is big opportunity to transform them to ensure a more resilient and sustainable future.
By integrating circular economy principles, leveraging advanced technologies and supporting regional cooperation, New Zealand can build supply chains which can be prepared to withstand future crises, in addition to contributing to the country’s sustainability goals.