International Supply Chain Benchmarking

As a key action under the Strategy, the International Supply Chain Benchmarking Project seeks to establish freight performance benchmarks for Australia’s key supply chains, allowing international comparison and to help identify best practice and areas for reform. Benchmarking will provide a baseline of supply chain performance which can be tracked over time to monitor the effectiveness of the Strategy at improving performance of supply chains at a micro level.

Coinciding with the agreement of the Strategy in August 2019, work began on a pilot benchmarking study. The Australian Government engaged LEK Consulting to develop a methodology by conducting detailed supply chain benchmarking studies of Australian waste and wine supply chains with relevant international comparators. Australia generates a significant amount of waste per capita, with around 10 per cent of heavy vehicles on the road carrying waste. The freight component is relatively efficient, through long distances to landfill and waste system design impact the trade-off between efficient freight handling and achieving desired environmental outcomes.

Australia exports two-thirds of its 1.4 billion litres of wine produced. The study compared the Australian wine supply chain against California and Bordeaux, regions which — despite some differences — are reasonable comparators in terms of volume, price and export competitiveness. The comparison showed the Australian wine supply chain is relatively efficient. For finished goods, especially exports, general container freight efficiency is a greater influence on this than wine specific factors.

The full pilot study report provides the benchmarking methodology and in-depth analysis of both supply chains, and suggests a number of nationally significant supply chains for future benchmarking. Work in the coming two years will involve engagement on the design of benchmarks for a broad set of import and export commodities, review of post-COVID-19 benchmarking priorities, and more detailed analyses of key commodities like grain, cement, red meat and steel.

Figure 6: Towards a broad set of Australian supply chain benchmarks

Figure 6: Towards a broad set of Australian supply chain benchmarks