How Confident are you managing risk when it comes to your business?

We have partnered with data scientists at Sciens, to explore the current risks/ranking locally and globally impacting the supply chain of Australian industries and businesses.

With the unpredictable nature of 2021 due to Coronavirus, the importance of reviewing supply chain risk to your business is at an all-time high. It is crucial that all key elements of analysis should be considered to define current and future disruptions to effectively reduce risk.

Supply chain risk analysis should contain: 

  • A clear outline of direct and indirect suppliers, services, and customers
  • Supply chain mapping in its entirety
  • Systems and system management
  • Data modelling of current and future industry potential impacts
  • B2B insights from suppliers and customers

This information should be derived from:

  • Internal data resources relating to import/export
  • External local and global industry data insights

As an import heavy country, many Australian businesses have had to reduce their offering due to the import limitations of raw materials and services, hence the reliance on an accurate analysis of supply chain risk to assist in decision making moving forward.

Obtaining reliable industry data can be costly, time consuming and limiting, so we have developed a series highlighting current industry related information with this blog focus on those within and reliant on the construction industry.

The Australian Construction Industry

There are currently over 3 million construction businesses registered in Australia with a high concentration listed in both Victoria and NSW.  From a supply chain management perspective, these businesses are highly reliant on other industries as a source of raw material and/or services and industries are highly reliant on them.

Industry Statistics

Table 1: Top 5 Suppliers to the Construction Industry by Ranking

Consumer Supplier Rank
Construction Construction 1
Construction Professional, Scientific and Technical Services 2
Construction Wholesale Trade 3
Construction Rental, Hiring and Real Estate Services 4
Construction Administrative and Support Services 5

(Source, Sciens, February 2021)

Construction is reliant on these industries both locally and globally, with China being the largest supplier to the Australian industries depicted in the figure above, closely followed by Japan.

Table 2: Top 5 Countries Supplying Construction Directly & Indirectly

Industry Country Rank
Construction China 1
Construction No Country Details 2
Construction Japan 3
Construction Israel 4
Construction Turkey 5

(Source, Sciens, February 2021)

If there are supplier disruptions this will then cause a flow on effect to consumers reliant on the construction industry and so forth. Below are the current top five supply chain dependant on the construction industry:

Table 3: Supply Chain Dependencies for Construction by Ranking

Supplier Consumer Rank
Construction Construction 1
Construction Public Administration and Safety 2
Construction Wholesale Trade 3
Construction Rental, Hiring and Real Estate Services 4
Construction Transport, Postal and Warehousing 5

(Source, Sciens, February 2021)

Taking into consideration the risk factors and reliance on other industries, the modelling has delved deeper into the construction category to the industry groups who are ranked the most at risk.

Table 4: Top 5 at Risk Groups within Construction 

Industry Industry Group Rank
Construction Building Completion Services 1
Construction Building Installation Services 2
Construction Building Structure Services 3
Construction Land Development and Site Preparation Services 4
Construction Other Construction Services 5

(Source, Sciens, February 2021)

Overall Risk Ranking for Construction

The data below reveals how dynamic the construction supply chain risk score has been throughout 2020, and it demonstrates the need for regular data monitoring and modelling to reduce risk.

Table 5: Industry Risk Score

(Source, Sciens, March 2021)

Consideration of the import/export risk of the entire supply chain for each industry, it was determined that Construction was ranked 3rd in terms of supply chain risk at present.

Table 6: Supply Chain Risk Ranking

Industry Rank
Health Care and Social Assistance 1
Retail Trade 2
Construction 3
Wholesale Trade 4
Accommodation and Food Services 5

(Source, Sciens, February 2021)

Questions you should be asking yourself and your business around Supply Chain Risk Management

  • What is your actual risk, and who supplies your business and who do you supply?
  • Has your business considered internal and external data analysis inclusive of related industry risk factors?
  • Have you been incorporating the right data modelling showing the full picture for more informative decision making?
  • Are your data sources reliable to feel confident your business is managing risk effectively and identifying potential disrupters before they occur?

Sciens are consistently tracking trends assisting business in reducing risk with current data modelling directly related to their business and industry, to find out more please Click here  

Author | Lauren Sexton – CX & Marketing Specialist Consultant,  SME | Darrel Amarasekera – Director at Sciens

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