Having the right products for your projects is critical. When New Zealand, or parts of New Zealand, come out of this period of lockdown, being able to secure the right materials and parts will reduce the lag in economic activity. This includes both maintenance of existing plant and machinery as well as new ‘shovel-ready’ construction projects.
We’ve seen some supply chain issues emerge earlier this year when the virus affected Chinese production. With the locus of the outbreak having shifted to the United States and Europe, there may be further disruption to supply chains for key materials, supplies and parts.
We know that our Government is conscious of this issue and working to facilitate international trade. It’s something the industry will continue to engage on.
This disruption is likely to continue in ways we can’t necessarily predict right now. We may see repeated periods of restricted movement in different countries at different times, as government apply, loosen, then reapply restrictions on movement in response to coronavirus case growth. This could continue till a safe vaccine is available (potentially 18 months) or an effective treatment is found.
While supply chain issues may not be a direct concern for engineers focused primarily on design, they can affect the viability of projects. For in-house engineers, they are much more likely to have a direct impact.
Steps you can take to lessen the impact of supply chain disruption:
- Check in with your vendors or clients about their supply lines regularly. We’ve seen that the manufacturing and logistics situation can shift rapidly from governments respond to exponential case growth.
- Try to plan as much lead time for sourcing key supplies as possible into project timeframes.
- Trying to identify likely key components early in the design process so clients and procurement staff can begin the work of securing supplies as early as possible
- Talk to other engineering and manufacturing firms to share information about known supply bottlenecks and possible alternatives
Further guidance and advice
McKinsey briefing note | 1.4 MB