Small Business Supply Chain Onshoring Impulse Gathers Pace - ScotPac
(7 July 2023 – Australia) New research has suggested that Australian SMEs, in response to the COVID-19 pandemic’s supply chain disruptions, are seeking to replace international suppliers with domestic ones.
According to the latest SME Growth Index by Australian non-bank business lender ScotPac conducted by East & Partners, over one in four Australian SMEs, plan to add new domestic suppliers over international suppliers in the next 18 months (28 percent) - especially small SMEs (32 percent).
This strategy aims to enhance supply chain resilience and build a stronger domestic network, as ScotPac reported a surge in demand for its trade finance facilities in the last 12 months. With over half of SMEs (54 percent) wanting to secure more flexible trade and supply chain funding arrangements according to the research, the door is open for commercial brokers and lenders AustralianBroker reports.
The long running biannual index found one in five SMEs plan to cut ties with international suppliers in the new financial year to support local products, services and jobs (21 percent). Previous rounds of reporting found that Australian SMEs were universally hit by supply chain disruptions in H2 2021 and no small business owners in the critically important segment were left unscathed.
“Global supply chain challenges of the past three years have sharpened the focus on inventory management for all SMEs and improved the outlook for Australian suppliers. Disruptions and challenges caused by events like the COVID pandemic, political conflicts and rising inflation have become the new normal for business owners” stated ScotPac CEO Jon Sutton.
“It is clear from the well-considered strategies SMEs have outlined in response that a growing proportion view strengthening supply chain resilience as a core business planning priority, rather than a reactive event.”
“SMEs have sought greater purchasing power to support their trade needs and opportunities, both domestically and internationally. It highlights the fact that access to fast and flexible finance will always be one of the best tools any SME can have at hand to mitigate supply chain shocks,” said Sutton.
“Business owners should talk with their brokers or advisors to ensure finance is part of their supply chain management strategy. Whether it is trade finance to better manage the flow of goods, or asset finance to buy equipment when you need it, ScotPac has the greatest breadth of products to help more businesses in more circumstances than any other lender,” Sutton said.
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