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Australian supply chains
Australian supply chains are vulnerable to 'the next shock'
March 2026
A report released following a recent UNSW Canberra World in Transition roundtable event has made five key recommendations to government.
In an era of increasing uncertainty, geopolitical competition, and technological disruption, Australia’s domestic and international supply chains are critical to national resilience and security. Yet key vulnerabilities remain, whether in our dependence on imported fuels, pharmaceuticals, and semiconductors; the fragility of just-in-time logistics; or our structural role as an exporter of raw materials and an importer of finished goods. As supply chains become a site of strategic contest, not just in war, but amid diverging interests between key partners, Australia must grapple with the realities of “friend-shoring,” technological decoupling, and workforce constraints.
The following key recommendations emerged:
- Establish a National Supply Chain Risk and Resilience Assessment, updated annually.
- Create a permanent national supply chain coordination mechanism linking government, industry, and regulators.
- Develop a targeted industrial strategy for critical capabilities, including digital infrastructure, pharmaceuticals, energy, and defence inputs.
- Strengthen the “missing middle” – Small and Medium-sized Enterprise (SME) – through better integration, and long-term procurement signals.
- Build an effective national resilience narrative and leadership culture that supports bottom-up innovation and shared responsibility.
Further insights
As a complement to the roundtable, the Resilient Australia supply chain event from September 2025 provides a live-recorded discussion that captures many of these themes in practice, offering a useful reference point for how these issues are being interpreted and debated across sectors (link TBD).
Below publications have been framing the conversation and provide some of the evidence base for the recommendations of the white paper:
The McKinsey Global Supply Chain Leader Survey (2024) highlights that disruptions remain the norm rather than the exception, with most organisations continuing to experience significant shocks. Despite this, investment in resilience, digitisation, and risk governance is slowing, and many organisations still lack visibility beyond their immediate suppliers. For Australia, positioned at both the origin and endpoint of global supply chains, this reinforces the extent of exposure across critical sectors.
The Productivity Commission’s Vulnerable Supply Chains report adds a more nuanced perspective, suggesting that while only a small proportion of imports are highly vulnerable, these risks must be understood in context. Not all vulnerabilities justify intervention, and resilience measures, such as diversification, stockpiling, or reshoring carry trade-offs. This points to the need for more targeted, evidence-based approaches rather than broad attempts at self-sufficiency.
Across both readings, a consistent theme emerges: the challenge is not simply identifying vulnerabilities but sustaining attention and coordination over time. Lessons from COVID-19 risk being lost without continued investment in supply chain mapping, workforce capability, and mechanisms for information sharing between government and industry.