Government has a role to play in the changing needs of Canadian supply chains

The emergence of the COVID-19 pandemic has exposed vulnerabilities in global supply chains in the past three years. Canadian supply chains have become increasingly vulnerable due to strategic decisions made over the last two decades. Canada’s supply chains have undergone significant structural changes due to aggressive cost-cutting tactics, including manufacturing sourcing changes and inventory reductions at all supply chain stages. Globalized sourcing has left Canadian supply chains exposed to demand and supply risks. We are seeing this happen now in the pharmaceutical, auto, and electronics sectors. COVID-19 affected supply chains globally both on the supply side and demand side. At first, many manufacturers stopped production to protect their workers from the virus. Supplies of parts and materials evaporated quickly, which in turn hampered the ability of manufacturers to ramp up operations after the first COVID wave. Consumers shifted buying patterns early in the pandemic and attempted to hoard items in short supply such as N95 masks and toilet paper. Demand disruptions made it more difficult for manufacturers to plan production. To make matters worse, global transportation networks were left in disarray due to capacity constraints and container availability. Much of the supply chain disruption could have been avoided with proper business continuity planning and risk management. Global supply chains executives did a poor job managing the risk of pandemics before COVID-19. An Accenture survey in 2006 conducted with supply chain executives regarding the sources of risk that affect global supply chain performance listed factors such as natural disasters, shortages of workers, and geopolitical uncertainty as top risks. Nowhere on the list of critical factors was the risk of pandemics. Unfortunately, governments worldwide were also caught unprepared. In Canada, the health-care sector is still suffering three years into the pandemic. Gary Uba is a part-time professor of supply chain management at the University of Ottawa. Photograph courtesy of Gary Uba Manufacturers globally and in Canada are now considering structural changes to reduce supply risks. Sourcing decisions will put stronger emphasis on greater responsiveness over low cost. Risk assessments of suppliers are being completed and strategic placement of inventory is replacing just-in-time production. The government plays an important role in how Canadian industry builds supply chain resilience. First, improvements in the Canadian transportation infrastructure are needed to increase capacity of seaports and expand highways and pipelines to accommodate increased demand volumes. Secondly, the federal government needs to better engage with Canadian industry leaders. The National Supply Chain Summit held in early 2022 was a good start, but follow up with concrete actions are needed. The Liberal government has promised to address labour shortages that affect the Canadian supply chain. The increase in immigration targets will help. More funding for skills development needs to accompany the boost in immigration. A key area of labour shortages is transportation. There is a severe shortage of truck drivers across Canada. According to Trucking HR Canada, Canada is expected to have a shortage of 25,000 truck drivers in 2023, a 25 per cent increase over unfilled vacancies in 2019. The government can address truck driver job vacancies by working with industry and provincial governments. It cost several thousand dollars to train and license truck drivers. The cost and time to become a truck driver is an obstacle for many new immigrants. The federal government could help fund skills development for new truck drivers and facilitate placement of immigrants seeking a career in truck driving. As the federal government prepares the 2023 budget, there needs to be funding to support the evolving Canadian supply chains. By partnering with industry leaders and provincial government counterparts, federal ministries need to commit to expand infrastructure and address labour shortages and skills development. Gary Uba is a part-time professor of supply chain management at the University of Ottawa. The Hill Times

Government has a role to play in the changing needs of Canadian supply chains

As the federal government prepares the 2023 budget, there needs to be funding to support the evolving Canadian supply chains.

Canada’s aging crisis and a call for reform in eldercare

Sudan’s warring sides and the long-simmering ethnic conflict

Balanced approach needed on right-to-repair bill, protecting IP rights and public safety

Reflections from a new citizen

Public Safety Canada’s dealing with natural and communication infrastructure disasters

As COP29 wraps up, will Canada finally stop funding fossils this fall?

Canadian aerospace and the supply chain challenge: a structural problem, or just a passing phase?

Charting a sustainable course for freight transportation

Enabling a more resilient Canadian supply chain workforce

Over-regulating rail is over-simplification: ways to improve Canada’s supply chain

Plant seeds beyond agriculture to shore up the fertilizer sector

News

Get free news updates

Opinion

Submit a guest opinion article

resources

Advertise

subscribe

get help

Get free news updates

Submit a guest opinion article

Government has a role to play in the changing needs of Canadian supply chains

As the federal government prepares the 2023 budget, there needs to be funding to support the evolving Canadian supply chains.

Get The Policy Briefings Newsletter