Friday, 14 May 2021 11:14

Coupa’s cuppa of Australia Budget 2021 commentary - supply chain resilience announcement ‘falls short’


Procurement and supply chain management solution provider Coupa says the Budget’s Office of Supply Chain Resilience announcement falls short, and that it “needs teeth and details on application of advanced tech.”

Coupa. The company says it is "one business spend management platform to unify supply chain, procurement, payments, and treasury", and its APAC MD, Stuart O'Niell, provided the following commentary on Australia's 2021 Budget and its impact on the tech sector.

A government office focused on building supply chain resilience in a few vulnerable areas just isn’t enough. This week’s Budget announcement on this front lacks clarity and legislative teeth. Does it have the necessary drive to capitalise on the opportunity for sovereign capability building?

Supporting manufacturers and monitoring for vulnerabilities will be important, but Australia needs an overarching focus on smart, agile and intentional procurement with far-reaching implications. Not just from the government but from the business community at large.

Australian businesses need more detail and clear indication as to what really will be done.

Risk of Missing the Point

We’re an island. We’ve used our proverbial moat and drawbridge during this global pandemic, and will do so until at least mid 2022. Yes, we have to mitigate supply chain issues, but if building sovereign capabilities is the end result, we’ll be stronger in the long run.

Australia needs resiliency to manage through global uncertainty and geopolitical instabilities, and to prepare for the next global event. And that’s not just about filling supply chain gaps.

Encouraging: Investment in Digital and AI

AI and analytics will need to be leveraged within the government and private sector environments -- with what-if scenario modelling, creation of digital twins, advanced demand forecasting etc. -- to fully understand and mitigate supply chain challenges. Australia needs to build these kinds of capabilities to innovate and compete for resources on the world stage in the new economy.

Disappointment: We need Legislation with Teeth

The Payment Time Reporting Scheme came into effect early in 2021, to push large businesses with over $100 million in annual turnover to report on how and when they are paying their suppliers. It’s a necessary step to ensuring that Australia supports Australian businesses, which in turn contributes to our country’s agility and resilience.

But businesses have at least a year to transition into this scheme, before they face any penalties for failure to report. Without teeth, it’s not incentive or drive; it’s just a suggestion. It’s not to say there won’t be teeth to this eventually, but it didn’t come out as part of this budget announcement and that was a disappointment.

This budget’s investment is a good start, but this “challenge” we’re talking about is going to impact and affect every sector of the market requiring goods … parts & components, office supplies, furniture, inventory, whatever their supplies may be. Without supplies there is nothing to sell.

Difficulty in importing even one component can cause a whole segment to come to a halt. As we have seen in the global car market, if there are no chips then there are no cars. Similarly, if there are no chips there are no new gaming consoles or broadband devices hitting the shelves.

It’s a good start, but more will be required to drive a concerted effort that includes our industries and business sector.

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Alex Zaharov-Reutt

Alex Zaharov-Reutt is iTWire's Technology Editor is one of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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