For the past few decades, globalisation and rapid economic development have allowed organisations to unlock supply chain efficiencies to fuel infrastructure development. COVID-19 and resulting border closures shattered this paradigm and created a new set of challenges. Organisations struggled to access supply chains for critical materials and the mobility of specialist workers was severely restricted.

This led to delays and increased costs for infrastructure projects, as well as a need for greater flexibility and innovation in sourcing materials and equipment.

Organisations have turned their attention to sovereign security and risk – looking at the full value chain, the criticality and vulnerabilities of their assets, and the trade-offs needed to balance efficiency and security. 

Globalisation vs localisation – three trends

Balancing localisation and globalisation in supply chains is a complex issue that has significant implications for infrastructure development in Australia.

Leading organisations are taking a risk-based approach to understanding their asset base within a network and leveraging this to inform their decision-making.

This extends beyond financial considerations and explores where globalisation is appropriate for robust value chains, vs where a local solution provides an effective outcome for vulnerabilities. This is a multi-faceted challenge, but three key trends are emerging:

1. Renewed focus on supply chain effectiveness

Australian organisations depend on global supply chains to provide reliable and affordable services to customers. However, with rising costs and potential global recession, companies are looking to improve the effectiveness as well as the efficiencies in these supply chains. This work is especially critical given the current geopolitical environment threatening the disruption of critical inputs.

Organisations are enhancing supply chain resilience by increasing local sourcing and redundancy. This helps to reduce their carbon footprint while ensuring a steady supply of materials and equipment for infrastructure projects.

2. Balance competing agendas for critical minerals

Technology changes and geopolitical forces have reframed the national economic potential of critical minerals. Appropriately, critical minerals now have their own place on the national agenda. But when coupled with our national commitments to achieving a net zero future, the challenging reality of balancing potentially competing agendas and considerations of sovereign capability come into sharp focus.

Our critical minerals play a vital role as we shift to a low carbon future. Traditionally, mining and metals industries have serviced Australia’s export market, but there is a shift in their portfolio of products toward commodities and metals needed to accelerate the energy transition. How do we protect these critical assets and keep them operational during periods of disruption or conflict?

3. Managing recruitment constraints and challenges

Skills shortage is not a new problem – and it’s no secret that Australia is experiencing constraints on, and competition for, human resources. 

Looking ahead at the development and sustainment work needed for emerging infrastructure and existing infrastructure investments, there is a heightened need to grow our own talent pipeline – especially with recent reductions in migrant workers entering the workforce.

But increasing the workforce is not enough. Organisations need to embrace digital and automation while integrating cyber security and resilience into the overall solution to ensure a holistic and effective approach.

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