There's nothing like a global pandemic to put international supply chains to the test. And as the impacts of COVID-19 have shown, Canada's flow of critical goods is as vulnerable to cross-border delays, logistical strains, and protectionist attitudes as any other jurisdiction.
The events of 2020 have undoubtedly turned a focus on the risks of being a country that relies heavily on global trade. From day one, our dependence on the import of personal protective equipment (PPEs), food, and other essential goods has been called into question. Restricted borders and protectionist attitudes stretched our already lengthy supply chains, leaving critical gaps on our retail shelves and industrial warehouses.
Canada is far from alone in its supply chain challenges. Across the globe, the crisis has also exposed weaknesses in the "Just in Time" manufacturing concept, which has left limited stock available to respond to the pandemic. Now, as the world collectively begins bouncing back from these growing pains, the need to revisit traditional supply chains and diversify has never been more clear.
The supply chain challenge is well known to the Canadian government. In conversations with our public sector clients, there is a clear desire to take stock of our domestic manufacturing and supply capabilities, define our domestic needs, build more secure trade relationships, and – perhaps more importantly – foster greater self-reliance. Canadian industries have seen manufacturing plants and head offices leave the country in the recent past; and if anything, the pandemic has been a wake-up call for provinces and federal powers to encourage domestic activity, attract new industrial investors, and entice existing players to stay.
Actions are already being taken to quantify Canada's supply chain dependencies. Throughout the pandemic, federal and provincial governments engaged in a rapid-fire initiative to identify PPE producers in their respective jurisdictions and catalog their offerings. The result is an evolving online directory of organizations that can respond to local demands for healthcare essentials and pandemic supplies. Beyond this, the Canadian government is leveraging supply chain data analytics to bolster its demand planning capabilities.
Initiatives have also been launched at the provincial level. For example, Ontario has taken steps to engage with local industries and communities to understand their challenges, assess their needs, and identify other manufacturers and stakeholders who can fill the gaps within its eco-system.
Of course, Canada's supply chain challenges are also symptoms of its vast size and low population density. Compared to our neighbours to the south, it simply costs more time and money to distribute vital goods across our major centres. Moreover, these logistical barriers make it more demanding to fulfill the promise of fast and responsive online shopping outside of our large hubs. True, these obstacles existed well before March 2020, but they have been exacerbated by a pandemic that made it even more difficult to source and distribute products to where they were needed most.
The opportunities are clear and the challenges are defined. So what comes next for Canada's supply chain? In the short term, existing supply chains are to replenish stocks and re-establish the flow of goods. In the mid-term, organizations are likely to diversify at least some of their procurement across suppliers and locations.
Governments have the most important part to play in shaping longer-term strategies. As Canada looks to shape its post-pandemic new reality, it is important to develop focused strategies that pay particular attention to specific supply chains, particularly those that support disaster recovery and critical national infrastructure.
It is also vital that we continue establishing visibility into all key supply chains. This can best be achieved through data-driven technologies like predictive supply chain toolsets that provide a greater, real-time visibility of supply chains, identify where future shortfalls are likely to occur, and enable other plans to be put in place. Such a solution can also provide a sandbox in which governments can test scenarios that will be key to addressing future crises and enabling quicker responses.
Governments also need to adapt their procurement strategy to the speed of innovation. For example, rather than contract for atomized requirements in IT, governments would be better served by contracting for outcomes. That means stipulating the intended outcomes but allowing the product to morph, within boundaries, as developments and innovations take shape. Taking this more agile approach ensures that procured services match a department's immediate needs, rather than the perceived needs from back when the process first began.
The pandemic has driven home how quickly and dramatically our needs can change. Keeping pace requires a more resilient and agile supply chain that gets goods into the hands of Canadians whenever and wherever they need them, regardless of disruptive factors outside our borders. Canadian governments are already taking it upon themselves to identify and address supply chain gaps, and their ongoing efforts will be critical to protecting the health and wellbeing of their citizens.
Ready to re-think the flow of Canadian goods?
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Building resiliency within Canada's supply chain means looking at the sectors which have been most stressed during the pandemic (e.g., health, food, consumer supplies) and working with businesses and communities to assess domestic capabilities, identify our gaps, and comes up with plans that will make us more self-reliant the next time an event like this comes our way.
Webinar replay: Maintaining the integrity of your supply chain and increasing resiliency
Maintain the integrity of your supply chain and increase resiliency