24 March 2020 - Steven Griffiths
Government moves to ensure supply chains are maintained in light of COVID-19
One of the predominant images of the COVID-19 crisis so far has been that of empty shelves at our supermarkets. Panic buying and stockpiling of certain items has led to localised shortages and, in extreme cases, brawls over the humble pack of toilet paper.
On 20 March 2020, the NSW Government moved to ensure that maintaining supply chains to local supermarkets and shops are not hindered by planning laws.
State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 has been amended so that existing “retail supply chain premises”, which includes “port facilities”, “warehouse or distribution centres” and “retail premises” can now operate 24 hours a day, seven days a week to deliver goods directly and indirectly to supermarkets and shops.
The changes permit deliveries to occur despite any local planning controls or conditions of development consent which restrict the hours of operation and the frequency and movements of vehicles associated with these premises, provided steps are taken to reduce noise.
Communities can therefore be assured that supplies will continue and any impacts should be considered reasonable and necessary in these unprecedented circumstances.
The changes are in force now and will remain so until 1 October 2020.
19 March 2020 - Michael Cossetto
We have all experienced the impact of COVID-19 on supply chains – just look at the empty shelves in our supermarkets. Some businesses are struggling to keep up with increased demands on their products and are finding it difficult to source parts, raw materials or ingredients for production. Other businesses are now languishing in an oversupply of inventory as they struggle to sell stock due to a cliff face drop in demand.
It’s a crazy time for supply chain managers, who should be asking the following questions of their procurement teams:
Which suppliers (Tier One, Tier Two, Tier Three etc) are affected by COVID-19 and what should we do about it?
Will any of them be financially threatened because of COVID-19?
Do we have supply risks in critical categories because of COVID-19?
What transport channels are impacted? Do we have good visibility on where our containers are each day?
What delays or other risk factors can be expected further down the supply chain before it reaches our facilities?
What other sources of supply are available, and how quickly can they be engaged?
What contracts are affected by the COVID-19 crisis and what is my financial exposure? Are there penalties for not reaching contractual MOQs?
Can we get out of a contract because of COVID-19?
This is a time when having a great relationship with each component of your supply chain will make a difference. You should be picking up the phone and talking with your suppliers regularly to ensure that you have the answers to these questions and are well positioned to head off a major stock shortage before it occurs.
We know it’s easier said than done. No doubt it may be extremely difficult to reorganise a supply chain or to find an available source in these times, but those that are agile and who can think outside the square will most likely fare best.
If you get stuck, please give us a call. Our team of commercial lawyers are great problem solvers and we might be able to help find a way through the supply chain chaos.