For decades, Australian manufacturing supply chains were designed around a relatively simple premise: global sourcing, predictable lead times, steady demand, and incremental improvement. Cost efficiency was king, inventory was treated as a necessary evil, and supply chain was often viewed as an operational function rather than a strategic one. That world no longer exists.

Over the past five years, Australian manufacturers have experienced a sustained period of disruption that has fundamentally changed how supply chains are designed, governed, and invested in. Global shocks, local labour constraints, inflationary pressure, evolving customer expectations, and rapid advances in digital technology have combined to force a rethink of what “good” supply chain performance actually looks like.

This article explores how manufacturing supply chains in Australia are changing, why those changes are proving so challenging, and what manufacturing leaders need to do to stay competitive in this new environment.

The end of “set and forget” supply chains

One of the most significant shifts in Australian manufacturing is the move away from static, long-range supply chain designs.

Historically, many manufacturers invested heavily in network design, sourcing strategies, and planning systems, then expected those decisions to hold for a decade or more. Supply chains were optimised once, with limited appetite for revisiting assumptions unless something went seriously wrong.

Today, that approach is no longer viable.

Australian manufacturing supply chains are now expected to be:

• Continuously reviewed
• Highly responsive to demand and supply volatility
• Flexible enough to adapt to geopolitical, economic, and regulatory change

Network structures, sourcing strategies, inventory policies, and production footprints are increasingly viewed as living systems, not fixed assets. This shift is driving more frequent strategic reviews and a stronger connection between supply chain decisions and enterprise-level strategy.

Resilience has overtaken pure cost optimisation

Perhaps the most visible change in Australian manufacturing supply chains is the reprioritisation of resilience. While cost remains critical, manufacturers have learned often painfully, that the cheapest supply chain is not necessarily the most competitive. Extended disruptions have exposed the true cost of brittle, overly lean supply chains that lack redundancy, visibility, and flexibility.

As a result, many Australian manufacturers are now actively reassessing:

• Single-source dependencies
• Offshore manufacturing concentration
• Supplier financial health and operational risk
• Safety stock and decoupling strategies
• Lead time exposure and variability

Resilience is no longer treated as insurance; it is increasingly viewed as a source of competitive advantage. Manufacturers that can continue to supply customers during disruption win trust, market share, and pricing power. This does not mean returning to inefficient stockpiling. Instead, it means smarter resilience, underpinned by data, scenario modelling, and segmented service strategies.

Supply chain is now a board-level topic

Another defining change in Australian manufacturing is the elevation of supply chain to the executive and board agenda.

Supply chain performance now directly impacts:

• Revenue continuity
• Working capital
• Customer satisfaction
• ESG commitments
• Corporate risk exposure

As a result, boards and executive teams are asking more sophisticated questions about supply chain capability, maturity, and investment priorities.

This shift has led to:

• Greater scrutiny of supply chain KPIs beyond cost
• Increased demand for transparency and visibility
• Stronger alignment between operations, finance, and strategy
• More structured governance of supply chain decisions

Manufacturing supply chains are no longer something leaders only discuss when there is a problem. They are becoming a core pillar of enterprise performance management.

Demand volatility is forcing planning model redesign

Demand patterns for Australian manufacturers have become more volatile, less predictable, and more fragmented.

Contributing factors include:

• Shorter customer order cycles
• Greater product customisation
• Channel proliferation
• Faster shifts in end-consumer behaviour
• Increased promotional and pricing activity

Traditional forecasting approaches often heavily reliant on historical averages, are struggling to cope with this reality. In response, manufacturers are rethinking how they plan demand and supply.

Key changes include:

• Moving from forecast accuracy to forecast usability
• Greater emphasis on scenario planning
• More frequent re-planning cycles
• Improved collaboration between sales, operations, and finance

Sales and Operations Planning (S&OP), and its evolution into Integrated Business Planning (IBP), is becoming a critical capability rather than a compliance exercise.

Inventory is being reframed as a strategic asset

Inventory management has long been a tension point for Australian manufacturers. Too much inventory ties up capital and increases risk. Too little inventory threatens service, production continuity, and customer relationships. What has changed is how inventory is being discussed and governed.

Rather than applying blanket inventory targets across the business, leading manufacturers are now:

• Segmenting inventory by customer, product, and risk profile
• Explicitly linking inventory levels to service promises
• Balancing working capital objectives with resilience requirements
• Using inventory as a buffer where it delivers the most value

This more nuanced approach requires better data, stronger planning discipline, and closer alignment between finance and operations. Inventory is no longer simply a cost to be minimised, it is a lever to be deliberately deployed.

Manufacturing footprints are being reassessed

Australian manufacturers are also revisiting where and how production occurs.

While reshoring and nearshoring are often discussed, the reality is more complex. For most organisations, the question is not whether to abandon offshore manufacturing, but how to build a balanced, risk-aware manufacturing footprint.

This includes:

• Evaluating dual-sourcing or multi-site production strategies
• Assessing local manufacturing for critical or high-risk products
• Reviewing capacity flexibility and changeover capability
• Understanding the total landed cost rather than unit cost alone

Manufacturing footprint decisions are increasingly being made in conjunction with supply chain, rather than in isolation.

Digital enablement is accelerating, but unevenly

Technology investment in Australian manufacturing supply chains is accelerating, but adoption remains uneven.

Many organisations have invested heavily in ERP platforms, planning systems, and reporting tools, yet still struggle with:

• Poor data quality
• Limited system integration
• Over-complex planning processes
• Low user adoption

At the same time, newer approaches including advanced analytics, automation, and low-code solutions are enabling faster, more targeted improvements without wholesale system replacement.

The key shift is not simply adopting more technology, but:

• Designing processes first
• Selecting fit-for-purpose tools
• Ensuring usability for frontline and planning teams
• Embedding governance and change management

Digital enablement is increasingly viewed as an ongoing capability rather than a one-off project.

Workforce constraints are reshaping operations

Labour availability and skills shortages are having a profound impact on Australian manufacturing supply chains.

Challenges include:

• Difficulty recruiting skilled operators and planners
• Increased reliance on casual or contingent labour
• Rising wage costs
• Greater safety and fatigue management requirements

In response, manufacturers are:

• Redesigning workforce models and shift patterns
• Investing in workforce planning and scheduling capability
• Automating manual and repetitive tasks
• Improving visibility of labour demand and capacity

Workforce considerations are now deeply intertwined with supply chain design, planning, and execution decisions.

Sustainability expectations are becoming operational

Sustainability is no longer confined to reporting or corporate messaging. For Australian manufacturers, it is increasingly shaping day-to-day supply chain decisions.

This includes:

• Reducing transport emissions
• Improving energy efficiency in manufacturing and warehousing
• Minimising waste and obsolescence
• Improving supplier transparency and compliance

Rather than treating sustainability as a standalone initiative, leading organisations are embedding it into supply chain strategy, procurement decisions, and performance metrics.

The challenge lies in balancing sustainability goals with cost, service, and resilience — particularly in an inflationary environment.

How Trace Consultants can help Australian manufacturers

As manufacturing supply chains become more complex and strategically important, many organisations are recognising the value of independent, specialist support. Trace Consultants works with Australian manufacturers to help them navigate this changing landscape with clarity and confidence.

Support typically includes:

Supply chain strategy and operating model design

Helping organisations align their supply chain design with business strategy, customer expectations, and risk appetite, ensuring supply chain decisions support long-term objectives.

Network and Manufacturing Footprint Reviews

Providing objective analysis of warehouse, transport, and manufacturing networks to identify opportunities to improve cost, resilience, and service performance.

Planning capability and S&OP / IBP design

Supporting the design and implementation of pragmatic planning frameworks that improve decision-making without unnecessary complexity.

Inventory and working capital optimisation

Helping organisations strike the right balance between inventory investment, service levels, and resilience, using data-driven segmentation and policy design.

Technology and digital enablement

Assisting manufacturers to select, design, and deploy fit-for-purpose digital solutions that improve visibility, automation, and planning effectiveness.

Workforce planning and operational efficiency

Supporting workforce modelling, rostering, and productivity improvement initiatives to address labour constraints and rising costs.

Trace Consultants brings a practical, implementation-focused approach grounded in real-world manufacturing and supply chain experience, helping organisations move beyond theory to tangible outcomes.

What manufacturing leaders should focus on now

Australian manufacturing supply chains are unlikely to become simpler in the years ahead. Uncertainty, volatility, and competitive pressure will remain defining features of the operating environment.

Leaders should focus on:

• Building adaptable supply chain strategies
• Investing in planning and decision-making capability
• Treating resilience as a strategic asset
• Aligning supply chain, finance, and operations
• Taking a pragmatic, staged approach to digital enablement

The manufacturers that succeed will be those that treat supply chain not as a cost centre, but as a source of competitive advantage.

Final thoughts

The transformation of manufacturing supply chains in Australia is well underway. While the challenges are significant, so too are the opportunities for organisations willing to rethink long-held assumptions and invest in capability where it matters most.

In an environment where disruption is the norm rather than the exception, the ability to sense, respond, and adapt through the supply chain will increasingly define manufacturing success. The question is no longer whether Australian manufacturing supply chains need to change, but how quickly and how deliberately organisations choose to act.

Is your supply chain keeping pace with the reality of Australian manufacturing?

If resilience, planning confidence, or working capital still feel like trade-offs rather than deliberate choices, it may be time to take a step back and reset the foundations. At Trace Consultants, we work with manufacturers to redesign supply chains for today’s conditions. More adaptable networks. Stronger planning capability. Clear decisions that balance cost, service, resilience, and sustainability.

Get in touch with Trace to explore how your supply chain can move from reactive to resilient, and become a genuine source of competitive advantage.

For many organisations, sourcing strategy has historically been treated as a procurement exercise, something revisited every few years when contracts expire or budgets come under pressure. The focus has often been on reducing unit rates, aggregating spend, and extracting savings through negotiation. That approach is increasingly misaligned with the realities of modern supply chains.

Across Australia and New Zealand, organisations are operating in environments defined by uncertainty: global supply volatility, labour shortages, infrastructure constraints, climate impacts, regulatory scrutiny, and rising service expectations from customers and communities. In this context, sourcing decisions made purely on cost often create unintended consequences: service failures, supply interruptions, quality degradation, and over-reliance on fragile supplier relationships.

A contemporary sourcing strategy must do more. It must deliberately balance service, reliability, quality, responsiveness, and cost, while aligning with broader business objectives and risk appetite. It must also recognise that, in some markets, achieving this balance requires proactive investment in suppliers, supply chains, or even internal capabilities to ensure resilience and competitive tension over the long term.

This article explores how organisations can design and implement sourcing strategies that deliver sustainable value rather than short-term savings. It also outlines how Trace Consultants supports organisations across Australia and New Zealand to move beyond transactional sourcing and build robust, future-ready sourcing strategies.

Why sourcing strategy has become a strategic priority

Sourcing decisions shape far more than procurement outcomes. They influence operational performance, customer experience, risk exposure, and organisational agility. When sourcing strategies are poorly designed, the impacts are felt well beyond procurement teams. Operations struggle with unreliable supply. Frontline teams compensate for service failures. Working capital increases as buffers are added to manage risk. Leadership teams find themselves responding reactively to issues that could have been avoided through better sourcing design.

Conversely, organisations that approach sourcing strategically are better positioned to absorb shocks, respond to demand volatility, and adapt as markets change. They understand that sourcing is not just about who they buy from, but how supply ecosystems are structured and governed. In many sectors including retail, manufacturing, healthcare, infrastructure, energy, resources, and services this shift is already underway. Sourcing is increasingly viewed as a lever for resilience and performance, not just cost reduction.

The 5 dimensions of an effective sourcing strategy

At the core of a strong sourcing strategy is the deliberate balancing of five interconnected dimensions. Optimising one at the expense of the others almost always creates risk.

1. Service

Service refers to the supplier’s ability to meet operational requirements consistently. This may include on-time delivery, completeness of supply, responsiveness to issues, and alignment with operational rhythms. High service performance is particularly critical in environments where downstream operations are time-sensitive or customer-facing. In these contexts, sourcing strategies that prioritise low cost without adequate service safeguards often shift cost elsewhere in the organisation through rework, expediting, or lost revenue.

2. Reliability

Reliability is about consistency over time. It reflects the supplier’s ability to perform not just when conditions are stable, but when they are disrupted. Reliable supply is shaped by factors such as financial stability, capacity management, geographic footprint, workforce resilience, and exposure to upstream risks. A sourcing strategy that relies heavily on a single, low-cost supplier may appear efficient until disruption occurs and then the cost of failure becomes apparent.

3. Quality

Quality extends beyond product specifications or service outputs. It includes compliance, safety, process discipline, and the ability to meet regulatory and organisational standards. In many industries, quality failures carry significant downstream consequences including operational shutdowns, safety incidents, reputational damage, or regulatory intervention. Sourcing strategies must therefore account for the true cost of poor quality, not just headline pricing.

4. Responsiveness

Responsiveness reflects how quickly suppliers can adapt to change like volume fluctuations, specification changes, demand surges, or unforeseen events. As markets become more volatile, responsiveness has become a differentiator. Sourcing strategies that prioritise rigid, lowest-cost supply often struggle to flex, forcing organisations to absorb volatility internally.

5. Cost

Cost remains a critical dimension, but it must be considered holistically. Total cost of ownership, including inventory, risk buffers, management overhead, and disruption costs often tells a very different story from unit price alone. Leading organisations design sourcing strategies that optimise total cost while preserving service, reliability, quality, and responsiveness.

Moving beyond single-supplier thinking

One of the most common sourcing risks observed across Australian and New Zealand organisations is over-reliance on single suppliers. In some cases, this is the result of deliberate consolidation strategies aimed at leveraging scale. In others, it emerges organically as organisations default to incumbent relationships over time.

While single-supplier models can deliver efficiencies in stable markets, they introduce significant risk when conditions change. Loss of competitive tension, limited leverage, and exposure to supplier-specific disruptions are common consequences. As a result, many organisations are revisiting multi-supplier and dual-supplier strategies as part of their broader sourcing approach.

Designing effective dual-supplier strategies

A two-supplier (or dual-source) strategy is often positioned as a way to reduce risk and maintain competitive tension. However, simply appointing two suppliers is rarely sufficient on its own. An effective dual-supplier strategy requires deliberate design across several dimensions.

Ensuring both suppliers are viable at scale

A common pitfall in dual-sourcing is allocating the majority of volume to one supplier and a token share to the second. Over time, the secondary supplier becomes commercially unviable, loses capability, or deprioritises the relationship—undermining the intent of the strategy. Sustainable dual-supplier models typically require sufficient volume allocation to ensure both suppliers can invest, maintain capability, and remain competitive.

Balancing Ddomestic and global supply

In some categories, particularly those exposed to global volatility, organisations adopt a hybrid model, pairing a global supplier with a domestic or regional supplier. While global suppliers may offer cost advantages, domestic suppliers often provide faster response times, greater visibility, and reduced exposure to international disruption. The balance between the two is a strategic choice that should reflect risk appetite, service requirements, and demand variability.

Investing in supplier capability

In specialised or constrained markets, viable second suppliers may not exist at the outset. In these cases, organisations may need to invest in developing supplier capability through volume commitments, co-investment, process standardisation, or technical support. While this requires upfront effort, it can pay dividends over time by creating genuine competition and resilience where none previously existed.

Designing clear sllocation and switching sules

Dual-supplier strategies are most effective when allocation logic is explicit. This may include defined volume splits, performance-based allocation, or surge capacity arrangements. Clear rules reduce ambiguity, maintain discipline, and enable faster response when conditions change.

When supply chains need to be built or strengthened

In some markets, particularly specialised or capital-intensive categories, organisations cannot rely on existing supplier ecosystems to deliver the balance of service, reliability, and cost they require. In these situations, sourcing strategy extends beyond supplier selection into supply chain enablement.

This may include:

• Supporting suppliers to expand capacity or geographic coverage
• Standardising specifications to lower barriers to entry
• Aggregating demand across business units to improve commercial viability
• Investing in shared infrastructure or systems
• Providing longer-term commitments to enable supplier investment

While these approaches move beyond traditional procurement boundaries, they are increasingly necessary in markets where supply concentration or capability gaps exist. Organisations that take a long-term view of sourcing recognise that competitive supply chains do not always exist by default, they often need to be deliberately shaped.

Assessing when vertical integration makes sense

In some cases, organisations consider vertical integration as an alternative to external sourcing. This may involve bringing manufacturing, logistics, maintenance, or service delivery in-house. Vertical integration is not inherently good or bad, it is a strategic decision that must be assessed objectively.

When vertical integration may be appropriate

Vertical integration can make sense when:

• Supply markets are highly concentrated or unreliable
• Quality or safety risks are unacceptable
• The capability is strategically critical to the organisation
• Long-term demand is stable and predictable
• The organisation can achieve scale and efficiency internally

In these scenarios, internalising capability may reduce risk, improve control, and deliver long-term value.

When vertical integration introduces risk

Conversely, vertical integration can increase risk when:

• Demand is volatile or uncertain
• The capability requires ongoing innovation that the organisation cannot sustain
• Fixed costs reduce flexibility
• Internal operations become insulated from market discipline

Many organisations underestimate the complexity and cost of managing vertically integrated operations, particularly over time.

Hybrid models and strategic optionality

Increasingly organisations are adopting hybrid models, retaining some internal capability while continuing to source externally. This can preserve optionality, maintain market intelligence, and provide a hedge against disruption. The key is to evaluate vertical integration decisions with the same rigour applied to external sourcing, grounded in data rather than intuition.

Governance, contracts and operating models matter

Even the best-designed sourcing strategy can fail if governance and operating models are weak. Clear accountability, performance management, and escalation mechanisms are essential to balancing service, reliability, quality, responsiveness, and cost over time.

Effective sourcing governance typically includes:

• Clearly defined service levels and performance metrics
• Regular performance and risk reviews
• Transparent issue resolution processes
• Commercial mechanisms that reward performance and manage downside risk
• Alignment between procurement, operations, and finance

Sourcing strategy is not a one-off event. It is an ongoing discipline that requires active management.

Common pitfalls in sourcing strategy design

Across many organisations, similar challenges emerge repeatedly:

• Over-weighting cost at the expense of service and reliability
• Underestimating the effort required to sustain dual-supplier models
• Failing to invest in supplier capability where markets are constrained
• Allowing sourcing decisions to be driven by short-term budget cycles
• Treating sourcing as a procurement issue rather than a business decision

Avoiding these pitfalls requires a structured, cross-functional approach.

How Trace Consultants can help

Trace Consultants supports organisations across Australia and New Zealand to design and implement sourcing strategies that deliver balanced, sustainable outcomes. Our approach is grounded in objectivity, data, and operational reality. We work alongside executive teams, procurement leaders, and operational stakeholders to ensure sourcing strategies align with how the business actually operates, not just how contracts are written.

Our support typically includes:

• Sourcing strategy development aligned to business objectives and risk appetite
• Category and market analysis to understand supplier dynamics and constraints
• Design of dual-supplier and multi-supplier strategies
• Assessment of domestic versus global sourcing trade-offs
• Evaluation of vertical integration and hybrid operating models
• Development of supplier investment and enablement strategies
• Design of governance, performance management, and operating models
• Support through implementation and transition

Importantly, we are independent and solution-agnostic. Our focus is on helping organisations make informed decisions that balance service, reliability, quality, responsiveness, and cost—both now and into the future.

Final thoughts

Designing and implementing an effective sourcing strategy is no longer about choosing the cheapest supplier. It is about making deliberate trade-offs, understanding risk, and shaping supply ecosystems that support long-term performance. For organisations across Australia and New Zealand, the challenge is not whether to balance service, reliability, quality, responsiveness, and cost, but how to do so in a way that aligns with their unique operating context.

Those that invest in thoughtful, well-governed sourcing strategies will be better positioned to navigate uncertainty, maintain competitive tension, and deliver sustainable value over time.

Is your sourcing strategy building resilience or quietly creating risk?

If supplier decisions are still driven mainly by unit price, there’s a good chance cost is being pushed elsewhere through service disruption, quality issues, or fragility in the supply base. At Trace Consultants, we help organisations design sourcing strategies that balance service, reliability, quality, responsiveness, and total cost. Not just on paper, but in a way that holds up under real operating pressure.

Start a conversation with Trace to understand where your current sourcing approach may be exposing hidden risk, and how a more deliberate strategy can deliver sustainable value in an uncertain market.

Defence supply chains rarely attract attention when they are working well. Equipment is available, personnel are supported, bases function, and operations proceed as planned.

When they fail, however, the consequences are immediate, visible and potentially severe. Across Australia and New Zealand, defence organisations are operating in an environment defined by heightened geopolitical uncertainty, increasing operational tempo, constrained labour markets, and ageing platforms and infrastructure. At the same time, expectations around readiness, resilience and sovereign capability have increased materially.

In this context, defence supply chains are no longer a supporting function, they are a core determinant of preparedness and capability.

This article explores what effective defence supply chains look like today, why traditional approaches are no longer sufficient, and how targeted investment in supply chain capability can materially improve readiness and resilience without unnecessary complexity or cost escalation.

Preparedness and capability: why supply chains matter

Preparedness is often discussed in terms of platforms, personnel and funding. Less visible, but just as critical, is the supply chain that sustains them.

Defence supply chains underpin:

• Availability of equipment and assets
• Sustainment and maintenance outcomes
• Workforce effectiveness
• Base operations and support services
• Training and exercise readiness
• Surge and contingency response

A highly capable force with fragile logistics is not a prepared force. In modern defence environments, the ability to anticipate demand, position inventory, mobilise logistics capacity and sustain operations over time is central to operational credibility.

The unique nature of defence supply chains

Defence supply chains differ fundamentally from commercial supply chains in several ways.

Demand uncertainty and volatility

Defence demand is inherently unpredictable. It is driven by:

• Operational requirements
• Exercises and training cycles
• Maintenance schedules
• Contingency scenarios

Traditional forecast-driven models are often insufficient on their own.

Long asset lifecycles

Many defence platforms and assets remain in service for decades. Supply chains must support:

• Obsolescence management
• Diminishing manufacturing sources
• Complex maintenance regimes

This places sustained pressure on inventory, procurement and engineering support.

High consequence of failure

In defence, supply chain failure can directly affect:

• Safety
• Mission success
• Strategic credibility

Tolerance for disruption is significantly lower than in most commercial settings.

Regulatory, security and sovereignty considerations

Defence supply chains must operate within:

• Security constraints
• Export controls
• Sovereign capability objectives
• Strict governance frameworks

These constraints shape sourcing, inventory and logistics decisions in ways that commercial supply chains do not face.

From efficiency to resilience and readiness

For many years defence supply chains, like their commercial counterparts, focused heavily on efficiency and cost control. Lean inventory, consolidated suppliers and just-in-time practices were adopted where possible. While these approaches delivered savings, they also reduced resilience. Recent global disruption has reinforced a critical lesson: efficiency without resilience undermines preparedness.

Modern defence supply chains must balance:

• Cost discipline
• Availability and redundancy
• Responsiveness to surge demand
• Sovereign and allied supply considerations

This requires deliberate design rather than incremental adjustment.

Inventory and materiel management as a capability enabler

Inventory is one of the most powerful and most misunderstood levers in defence supply chains.

Common challenges include:

• Incomplete or inconsistent inventory visibility
• Overstocking of low-criticality items
• Stock-outs of mission-critical spares
• Long lead times for replenishment
• Obsolescence and waste

Effective inventory management in defence requires:

• Clear classification of criticality
• Differentiated stocking strategies
• Integration between maintenance, engineering and logistics
• Data-driven policy rather than legacy rules

When done well, inventory becomes a force multiplier, improving readiness without excessive cost.

Sustainment and maintenance supply chains

Sustainment is where defence supply chains are most heavily tested.

Maintenance outcomes depend on:

• Availability of parts and consumables
• Workforce planning and skill availability
• Asset data quality
• Coordination between suppliers, bases and depots

Breakdowns in sustainment supply chains often manifest as:

• Extended asset downtime
• Cannibalisation of parts
• Increased safety risk
• Escalating cost

Improving sustainment performance requires an end-to-end view of the supply chain , not just isolated fixes.

Workforce as a critical supply chain constraint

Labour is one of the most constrained resources in defence supply chains.

Challenges include:

• Skills shortages in technical trades
• Ageing workforce demographics
• Competition with commercial sectors
• Security clearance requirements

Supply chain design that ignores workforce realities is unlikely to succeed.

Effective approaches consider:

• Demand-driven workforce planning
• Skill mix optimisation
• Workforce flexibility and surge models
• Integration of workforce planning with maintenance and logistics demand

Preparedness is as much about people as it is about inventory or infrastructure.

Infrastructure, bases and logistics nodes

Defence supply chains are anchored in physical infrastructure:

• Bases and depots
• Warehouses and workshops
• Ports, airfields and transport corridors

Many facilities were not designed for current operational requirements or future threats.

Challenges often include:

• Congested or inefficient layouts
• Limited capacity for surge operations
• Ageing assets
• Poor integration between infrastructure and operating models

Aligning infrastructure planning with supply chain strategy is essential to improving capability.

Transport and distribution in defence environments

Transport is a critical enabler of preparedness.

Defence transport supply chains must support:

• Routine distribution
• Training and exercises
• Rapid deployment
• Contingency and humanitarian response

Key challenges include:

• Long distances and remote locations
• Reliance on limited transport capacity
• Coordination between civilian and military providers
• Visibility and control across movements

A well-designed transport strategy improves both responsiveness and resilience.

Data, systems and visibility

Defence supply chains generate vast amounts of data, but insight is often limited by:

• Fragmented systems
• Inconsistent master data
• Manual workarounds
• Limited integration across functions

Improved visibility enables:

• Faster decision-making
• Better prioritisation
• Early identification of risk
• More effective use of resources

Technology is an enabler, but only when aligned to clear processes and governance.

Governance and decision-making

Defence supply chains operate within complex governance environments.

Challenges often include:

• Diffuse accountability
• Slow decision cycles
• Competing priorities
• Risk-averse behaviours

Improving preparedness requires governance that:

• Enables timely decisions
• Clarifies roles and responsibilities
• Balances risk and responsiveness
• Supports continuous improvement

Without this, even well-designed supply chains struggle to deliver outcomes.

Preparedness through scenario-based planning

One of the most effective ways to improve defence supply chains is through scenario-based planning.

Rather than relying solely on historical data, this approach considers:

• Surge demand scenarios
• Disruption to supply sources
• Workforce availability constraints
• Infrastructure limitations

Scenario-based planning helps identify vulnerabilities before they are exposed in real operations.

Sovereign capability and defence supply chains

Supply chain design plays a central role in sovereign capability objectives.

Key considerations include:

• Domestic manufacturing capacity
• Supplier resilience
• Strategic stockpiles
• Partnerships with industry

Sovereign capability does not mean doing everything locally, it means understanding where reliance exists and managing it deliberately.

Common challenges observed across defence supply chains

Across Australia and New Zealand, several themes appear consistently:

• Supply chains designed around peacetime assumptions
• Legacy processes not aligned to current risk profiles
• Limited integration between logistics, engineering and workforce planning
• Data quality issues undermining decision-making
• Fragmented accountability

Addressing these challenges requires structured, end-to-end thinking.

How Trace Consultants can help

Trace Consultants supports defence and defence-adjacent organisations to strengthen supply chain preparedness and capability in practical, defensible ways.

Our support typically includes:

• End-to-end defence supply chain reviews
• Inventory and materiel management strategy
• Sustainment and maintenance supply chain optimisation
• Workforce planning and capability design
• Logistics, warehousing and transport strategy
• Infrastructure and operating model alignment
• Data, systems and decision-support design
• Governance and performance framework development

We bring a pragmatic, execution-focused approach, grounded in how complex, asset-intensive supply chains actually operate, and how they must perform under pressure.

Building preparedness without unnecessary complexity

One of the biggest risks in defence supply chain transformation is over-engineering.

Preparedness is not achieved through:

• Excessive stockpiling without strategy
• Overly complex systems
• Rigid processes that slow response

It is achieved through:

• Clear priorities
• Robust fundamentals
• Data-driven decision-making
• Alignment between people, process and infrastructure

The most resilient supply chains are often those that are simple, visible and well-governed.

Final reflections

Defence supply chains are central to national preparedness and operational credibility. As the strategic environment becomes more uncertain, the ability to sustain forces, respond rapidly and manage risk will depend increasingly on how well defence supply chains are designed and governed.

Preparedness is not a single investment or initiative. It is the cumulative result of thousands of supply chain decisions about inventory, workforce, infrastructure, suppliers and systems, made deliberately and aligned to capability outcomes. For defence organisations across Australia and New Zealand, strengthening supply chain capability is not optional. It is foundational.

Is your supply chain strengthening preparedness, or quietly limiting it?‍

When readiness matters, supply chains need to hold under pressure, not just perform on paper. At Trace Consultants, we work with defence organisations to strengthen supply chain capability in practical, defensible ways. Clear priorities, better visibility, and decisions that improve readiness without unnecessary complexity.

Start a conversation with Trace to understand where your supply chain is supporting preparedness and where targeted change could make the greatest difference.

For many organisations across Australia and New Zealand, transport is one of the largest, least transparent and most difficult-to-control components of the cost base. It is also one of the most exposed to disruption.

Fuel volatility, labour shortages, carrier consolidation, capacity constraints and rising service expectations have fundamentally changed the transport landscape. At the same time, customers and internal stakeholders expect faster delivery, greater flexibility and more visibility, often without a willingness to absorb higher costs. In this environment, transport performance is no longer just an operational issue. It is a strategic capability.

Yet despite its importance, transport strategy is often fragmented. Network design decisions are made independently of carrier strategy. Technology investments are disconnected from operating models. Benchmarking is done sporadically. Rate negotiations are reactive rather than structured. The organisations that perform best take a very different approach. They view transport as an end-to-end system, where network design, carrier models, technology, commercial strategy and governance are deliberately aligned.

This article explores what a modern transport strategy looks like, from network design, through TMS implementations, to benchmarking, go-to-market processes and sustainable rate reductions.

Why transport strategy has become a board-level issue

Historically, transport was treated as a variable cost that could be managed through periodic tendering and carrier negotiations. That model no longer works in isolation.

Several forces have driven transport strategy up the executive agenda:

• Freight cost inflation has been persistent rather than cyclical
• Service expectations have increased, particularly in retail, healthcare and FMCG
• Supply chain disruption has exposed network fragility
• Sustainability and emissions reporting now include transport impacts
• Transport decisions increasingly shape customer experience

Transport is now tightly linked to revenue, reputation and resilience, not just cost.

Transport as a system, not a line item

One of the most common mistakes organisations make is treating transport as a collection of independent decisions:

• Warehouse locations decided without transport modelling
• Carrier contracts negotiated without understanding network implications
• Technology implemented without clear process design
• Benchmarking used only to pressure rates

In reality, transport performance emerges from the interaction of:

• Network structure
• Freight volumes and profiles
• Carrier strategy
• Technology and data
• Commercial terms
• Operational discipline

Optimising one element in isolation often creates cost or service issues elsewhere.

Network design the foundation of transport strategy

Transport outcomes are heavily influenced by network design decisions that may only be revisited every few years, if at all.

Key questions include:

• How many distribution points are required?
• Where should inventory be positioned?
• What service promises are realistic by region?
• How should linehaul and last-mile flows interact?

Poor network design decisions lock in:

• Excessive linehaul kilometres
• Inefficient last-mile delivery
• High reliance on premium freight
• Poor service in regional or remote areas

Effective network design balances transport cost, inventory, service and resilience, rather than optimising any single dimension.

Understanding freight profiles and demand patterns

Before meaningful transport optimisation can occur, organisations need a clear view of what they are actually moving.

This includes:

• Shipment volumes and frequency
• Weight, cube and pallet profiles
• Lane variability
• Seasonal peaks
• Service-level requirements

Without this visibility, carrier negotiations and TMS configurations are largely guesswork.

Carrier strategy and operating models

Carrier strategy is about more than choosing the cheapest provider.

Key considerations include:

• Core versus spot carrier mix
• Single versus multi-carrier models
• In-house versus outsourced transport
• Use of national, regional and niche carriers
• Alignment between carrier capability and freight profile

An effective carrier strategy balances:

• Cost competitiveness
• Capacity security
• Service reliability
• Operational simplicity

Over-fragmentation increases complexity and administrative cost. Over-consolidation increases risk.

Transport management systems enabling, not leading

TMS implementations are often seen as the centrepiece of transport transformation. In practice, they are an enabler, not the strategy itself.

A TMS can support:

• Carrier selection and rating
• Route optimisation
• Freight visibility and tracking
• Cost capture and accrual
• Performance reporting

However, many TMS implementations underperform because:

• Processes are not clearly defined first
• Master data is poor
• Carrier onboarding is underestimated
• Users are not trained in decision-making, only system navigation

The most successful TMS programs are grounded in a clear transport operating model and realistic adoption expectations.

Aligning TMS design to the transport network

A common failure point is misalignment between network complexity and TMS capability.

For example:

• Highly complex multi-leg networks implemented on simple systems
• Over-configured systems for relatively simple freight profiles
• TMS workflows that do not match how planners actually work

Technology should reflect the right level of sophistication for the organisation’s scale and maturity.

Benchmarking using data to inform, not just pressure

Transport benchmarking is a powerful tool when used correctly.

Benchmarking can provide insight into:

• Rate competitiveness by lane and mode
• Cost-to-serve by customer or region
• Structural cost drivers
• Service versus cost trade-offs

However, benchmarking is often misused as a blunt instrument to force rate reductions without understanding context.

Effective benchmarking considers:

• Freight profile differences
• Service commitments
• Network structure
• Volume volatility

Used well, it informs smarter decisions about where and how to intervene.

Go-to-market strategies for transport

One of the most effective levers for transport cost reduction is a structured go-to-market process. This goes beyond issuing a generic tender.

A strong transport GTM includes:

• Clear definition of scope and service expectations
• Clean, credible freight data
• Well-structured pricing mechanisms
• Thoughtful lane and bundle design
• Transparent evaluation criteria

The objective is not just lower rates, but:

• Better alignment between cost and service
• More sustainable commercial outcomes
• Improved carrier engagement

Designing rate structures that hold over time

Headline rate reductions often erode quickly if commercial structures are weak.

Key considerations include:

• Fuel surcharge mechanisms
• Indexation and escalation clauses
• Minimum volume commitments
• Peak period pricing
• Accessorial charges

Well-designed rate cards reduce surprises and disputes, improving both cost control and relationships.

Rate reductions versus cost reductions

One of the most important distinctions in transport strategy is between rate reduction and true cost reduction.

Rate reductions achieved through aggressive negotiation may be offset by:

• Declining service
• Increased accessorial charges
• Capacity withdrawal during peaks

True cost reduction is achieved through:

• Network efficiency
• Better planning
• Reduced variability
• Improved utilisation

Great transport strategies focus on sustainable cost outcomes, not just short-term wins.

Performance management and governance

Once transport strategy is implemented, ongoing governance is critical.

This includes:

• Clear KPIs covering cost, service and compliance
• Regular performance reviews with carriers
• Exception management processes
• Continuous improvement forums

Without governance, savings leak and service degrades.

Sustainability and transport strategy

Transport is a significant contributor to emissions.

Modern transport strategies increasingly consider:

• Mode optimisation
• Route efficiency
• Load consolidation
• Alternative fuels and vehicles
• Emissions reporting

Sustainability and cost efficiency are often aligned, particularly when waste and inefficiency are addressed.

Common pitfalls in transport transformation

Across Australia and New Zealand, similar issues appear repeatedly:

• Over-reliance on annual tenders
• Technology implemented without process clarity
• Benchmarking without context
• Savings targets disconnected from service reality
• Poor data quality undermining decisions

Avoiding these pitfalls requires discipline and end-to-end thinking.

How Trace Consultants can help

Trace Consultants supports organisations to design and deliver end-to-end transport strategies that are practical, defensible and sustainable.

Our support commonly includes:

• Transport network design and optimisation
• Freight data analysis and cost-to-serve modelling
• Carrier strategy and operating model design
• Independent TMS selection and implementation support
• Transport benchmarking and performance assessment
• Go-to-market strategy design and tender support
• Rate card and commercial structure design
• Governance, KPI and performance management frameworks

We work across sectors where transport is critical to cost and service outcomes, bringing a commercial, operational and execution-focused lens.

As an independent advisor, we help organisations make decisions that stand up to scrutiny and deliver real outcomes, not just theoretical savings.

Bringing it all together

Transport strategy is no longer about choosing a carrier or implementing a system in isolation.

High-performing organisations treat transport as an integrated system, aligning:

• Network design
• Carrier models
• Technology
• Commercial strategy
• Governance

Those that do this well achieve:

• Lower and more stable costs
• Improved service reliability
• Greater resilience to disruption
• Stronger sustainability outcomes

In a freight environment that is unlikely to become simpler or cheaper, transport strategy has become a core competitive capability. The organisations that succeed will be those that move beyond reactive rate negotiations and invest in deliberate, end-to-end transport design.

Is your transport strategy delivering control, or just coping with volatility?‍

If costs feel unpredictable, service trade-offs are increasing, or technology hasn’t delivered the clarity you expected, it may be time to step back and reset the system. At Trace Consultants, we help organisations design end-to-end transport strategies that align network design, carriers, technology and commercial models. Practical decisions that hold up in the real world.

Start a conversation with Trace to understand where transport is leaking cost or resilience, and how a more deliberate strategy can deliver sustainable performance.

Investing in Supply Chain Technologies – What Options Exist

Across Australia and New Zealand, supply chain leaders are being asked to do more than ever before. They are expected to reduce cost, improve service, manage risk, support sustainability goals and respond quickly to disruption — often with limited additional resources.

Technology is frequently positioned as the answer.

Vendors promise greater visibility, smarter decisions, automation, and resilience. Boards and executives see technology as a lever to modernise operations and future-proof supply chains. Yet despite significant investment across the region, many organisations remain dissatisfied with the outcomes.

Systems are implemented but under-used. Tools generate data but not insight. Planning platforms struggle to gain adoption. Operational teams revert to spreadsheets and workarounds.

The issue is rarely the technology itself. More often, it is how technology is selected, designed and embedded into the supply chain operating model.

This article explores the main categories of supply chain technologies available today, how they are typically used, where organisations see value, and what needs to be considered before investing.

Why supply chain technology investment has accelerated

Several forces are driving increased investment in supply chain technologies across the region.

Persistent disruption

Supply chain disruption has become the norm rather than the exception. Volatile demand, supplier instability, labour shortages and transport constraints have exposed the limitations of manual planning and fragmented systems.

Rising cost pressure

Inflationary pressure has increased scrutiny on:

• Inventory levels and working capital
• Transport and warehousing costs
• Procurement spend
• Labour productivity

Technology is increasingly seen as a way to improve efficiency without reducing service.

Higher service expectations

Customers, patients, students and internal stakeholders expect faster response times, greater transparency and more reliable service — all of which require better data and coordination.

Maturing digital capability

Cloud platforms, low-code tools and integration technologies have lowered barriers to adoption, making advanced capability more accessible than in the past.

The risk of “technology first” thinking

While investment is increasing, many organisations approach supply chain technology in the wrong order.

Common pitfalls include:

• Selecting tools before defining the problem
• Replicating broken processes in new systems
• Underestimating change and adoption effort
• Over-engineering solutions for current maturity
• Implementing multiple disconnected tools

Supply chain technology should enable better decisions and execution — not add complexity.

Core categories of supply chain technologies

Supply chain technology is a broad landscape. Understanding the main categories helps organisations focus investment where it will have the greatest impact.

Demand planning and forecasting technologies

Demand planning tools aim to improve forecast accuracy by combining historical data, statistical models and business inputs.

They support:

• Sales forecasting
• Demand sensing
• Scenario planning
• Alignment between commercial and operational teams

Modern tools often incorporate machine learning to detect patterns and respond to changes more quickly than manual approaches.

However, value is heavily dependent on:

• Data quality
• Clear ownership of the forecast
• Integration with supply and inventory decisions

Without these foundations, forecasting tools often become expensive reporting layers rather than decision-making engines.

Inventory optimisation technologies

Inventory optimisation tools focus on balancing service levels with working capital.

They support:

• Safety stock calculations
• Service level targeting
• Multi-echelon inventory optimisation
• Network-wide inventory visibility

These tools are particularly valuable for organisations with:

• Large product ranges
• Long or variable lead times
• Multiple stocking locations

Success depends on aligning inventory policy with real service requirements rather than theoretical targets.

Supply planning and advanced planning systems

Supply planning technologies help organisations determine how to meet demand given capacity, constraints and supply availability.

They are commonly used in:

• Manufacturing
• FMCG
• Healthcare and pharmaceuticals
• Complex distribution networks

These tools enable:

• Constraint-based planning
• Scenario analysis
• Trade-off evaluation between cost, service and capacity

The challenge lies in maintaining data accuracy and avoiding excessive complexity that planners cannot realistically manage.

Sales and Operations Planning (S&OP) and Integrated Business Planning (IBP) platforms

S&OP and IBP platforms are designed to align demand, supply, finance and strategy.

They support:

• Cross-functional planning
• Executive decision-making
• Scenario modelling
• Financial reconciliation

Technology alone does not deliver S&OP maturity. Value is realised when tools reinforce clear governance, accountability and decision rights.

Procurement and spend analytics technologies

Procurement technologies have evolved significantly in recent years.

Key capabilities include:

• Spend visibility and classification
• Category analytics
• Supplier performance tracking
• Contract management
• Procure-to-pay workflows

Spend analytics tools are often the starting point for cost reduction programs, providing insight into:

• Fragmented spend
• Contract leakage
• Supplier concentration
• Demand management opportunities

Procurement tools are most effective when tightly aligned with operational demand and service requirements.

Warehouse management systems (WMS)

Warehouse management systems underpin:

• Inventory accuracy
• Picking and packing efficiency
• Labour productivity
• Order fulfilment performance

Modern WMS platforms support:

• Automation integration
• Advanced picking strategies
• Real-time visibility
• Performance tracking

However, warehouse technology must align with:

• Physical layout
• Volume profiles
• Workforce capability

A mismatch between system design and warehouse reality is one of the most common causes of underperformance.

Transport management systems (TMS)

Transport management systems are used to plan, execute and monitor freight movements.

They support:

• Carrier selection
• Route optimisation
• Freight cost visibility
• Delivery performance tracking

For organisations with significant freight spend, a well-configured TMS can deliver both cost and service improvements.

The biggest challenge is integration — with carriers, warehouses and order systems.

Workforce planning, rostering and scheduling technologies

Labour is one of the largest cost drivers in supply chains.

Workforce technologies support:

• Demand-based labour forecasting
• Rostering and scheduling
• Skill mix optimisation
• Productivity tracking

These tools are increasingly used across:

• Warehousing and logistics
• Manufacturing
• Healthcare and aged care
• Service operations

Value is maximised when workforce tools are integrated with demand and volume forecasts rather than operating in isolation.

Asset management and maintenance technologies

Asset-intensive organisations are investing more heavily in asset management systems.

These tools support:

• Asset registers and hierarchy
• Preventative maintenance scheduling
• Reactive maintenance tracking
• Compliance and reporting

Improved asset visibility enables better planning, reduced downtime and more informed capital decisions.

Low-code, no-code and workflow automation tools

One of the fastest-growing areas of supply chain technology is low-code and no-code platforms.

These tools enable organisations to:

• Automate manual workflows
• Capture operational data
• Build lightweight applications
• Integrate systems without heavy custom development

They are particularly effective for:

• Bridging system gaps
• Supporting frontline teams
• Rapidly deploying targeted solutions

Used well, they complement core enterprise systems rather than replacing them.

Visibility, control towers and analytics platforms

Supply chain visibility tools aim to provide end-to-end insight across:

• Demand
• Inventory
• Orders
• Transport
• Suppliers

Often referred to as “control towers”, these platforms aggregate data from multiple systems and present it in a single view.

Value comes from:

• Exception-based management
• Faster response to issues
• Better coordination across functions

Without clear use cases, however, they risk becoming expensive dashboards with limited operational impact.

How to prioritise supply chain technology investment

With so many options available, prioritisation is critical.

Organisations should consider:

• Where performance is constrained today
• Which decisions are slow, manual or poorly informed
• Where data gaps create risk or inefficiency
• What capabilities the organisation can realistically adopt

Technology should be sequenced to support maturity rather than overwhelm it.

The importance of integration and architecture

Technology value is rarely created by a single system.

Most supply chain improvements depend on:

• Data flowing between systems
• Clear master data governance
• Simple, stable integration architecture

Fragmented technology landscapes increase cost and complexity while reducing insight.

Change management and adoption

One of the most underestimated aspects of supply chain technology investment is change.

Successful adoption requires:

• Clear ownership and accountability
• Training aligned to real workflows
• Visible leadership support
• Early demonstration of value

Without this, even the best technology will fail to deliver its potential.

Measuring return on investment

Supply chain technology ROI is often overstated upfront and under-measured after implementation.

Effective measurement focuses on:

• Decision quality improvement
• Cycle time reduction
• Inventory and working capital outcomes
• Service performance
• Labour productivity

Technology should be assessed on outcomes, not activity.

How Trace Consultants can help

Trace Consultants supports organisations across Australia and New Zealand to invest in supply chain technologies with confidence and clarity.

Our support commonly includes:

• Supply chain technology strategy and roadmap development
• Business case development and investment prioritisation
• Independent technology selection and vendor evaluation
• Operating model and process design
• Data and integration planning
• Implementation support and change enablement

We focus on aligning technology investment with real operational needs, ensuring systems support better decisions, not just better reporting.

As a technology-agnostic advisor, we help organisations choose solutions that fit their context, maturity and ambition — rather than chasing tools for their own sake.

Final reflections

Supply chain technology investment is no longer optional. The question is not whether to invest, but how to invest well.

Organisations that succeed:

• Start with clear problems, not products
• Design processes before systems
• Sequence investment based on maturity
• Focus relentlessly on adoption and outcomes

Those that struggle often do the opposite. In an environment of ongoing disruption and pressure, technology can be a powerful enabler — but only when grounded in operational reality and supported by disciplined execution.

When people think about supply chains, education is rarely the first sector that comes to mind. Manufacturing, retail, healthcare and logistics tend to dominate the conversation. Yet across Australia and New Zealand, education systems rely on large, complex, and often fragmented supply chains to operate every day.

From early learning centres and schools through to TAFEs and universities, education supply chains underpin:

• Teaching and learning environments
• Student accommodation and campus services
• Research laboratories and workshops
• Catering, cleaning and facilities management
• IT, digital learning platforms and equipment
• Capital works and asset maintenance

When these supply chains perform well, they are largely invisible. When they fail, the impact is immediate and highly visible — disrupted classes, unsafe facilities, unavailable learning resources, frustrated staff, and dissatisfied students.

As education providers face rising costs, constrained funding, workforce shortages, sustainability expectations and growing student demand, supply chain performance has become a strategic enabler, not just an operational necessity.

Why education supply chains are uniquely complex

Education supply chains differ from traditional commercial supply chains in several important ways.

Diverse demand profiles

Education institutions serve a wide range of demand types, often simultaneously:

• Daily consumables for classrooms and campuses
• Specialist equipment for science, technology, engineering and trades
• Research materials with strict handling requirements
• Food and beverage for students, staff and events
• Maintenance materials for ageing assets and infrastructure

This diversity makes standardisation difficult and increases coordination complexity.

Highly decentralised operating models

Many education systems operate across:

• Multiple campuses or schools
• Regional and remote locations
• Semi-autonomous faculties, departments or institutes

Procurement, inventory management and logistics decisions are often made locally, leading to duplication, inconsistency and limited visibility.

Service-critical outcomes

Unlike many commercial settings, education supply chains directly support:

• Student safety and wellbeing
• Learning continuity
• Research integrity
• Regulatory and accreditation requirements

The tolerance for disruption is low, even when budgets are tight.

The hidden cost of under-designed education supply chains

Because education supply chains have evolved organically over time, inefficiencies are often embedded and accepted as “just the way things work”.

Common symptoms include:

• Multiple suppliers providing the same products at different prices
• Limited visibility of spend across schools or campuses
• Overstocking of some items and shortages of others
• High reliance on urgent or reactive purchasing
• Inconsistent service levels across locations
• Poor coordination between procurement, facilities and operations

Individually, these issues may appear minor. Collectively, they drive significant cost, risk and frustration.

Schools: balancing cost, consistency and local flexibility

School supply chains are often constrained by:

• Tight funding models
• High administrative workloads
• Limited specialist procurement capability
• Strong need for local autonomy

Schools must source everything from classroom supplies and furniture to IT equipment, cleaning services and maintenance support.

Key challenges include:

• Price variability across schools for identical items
• Limited leverage with suppliers
• Administrative burden on teaching and leadership staff
• Inconsistent safety and quality standards

Improving school supply chains is rarely about centralising everything. Instead, it is about creating simple, consistent frameworks that reduce effort while preserving flexibility where it matters.

TAFEs: managing technical, trade and industry-aligned supply chains

TAFEs face a different set of challenges driven by the nature of vocational education.

Their supply chains must support:

• Workshops and trade training environments
• Industry-standard equipment and tooling
• Consumables with variable demand
• Compliance with safety and regulatory standards
• Strong alignment with industry partners

TAFEs often manage high-value assets and specialised inventory, with demand fluctuating based on enrolments and course schedules.

Without structured supply chain planning, this can lead to:

• Idle or under-utilised equipment
• Expensive last-minute procurement
• Safety risks from inconsistent maintenance
• Difficulty aligning spend with training outcomes

Universities: scale, complexity and competing priorities

Universities operate some of the most complex education supply chains in the region.

They manage:

• Large multi-campus estates
• Research facilities with specialised requirements
• Residential colleges and accommodation
• Food, retail and event operations
• Significant capital works programs

At the same time, universities face:

• Funding pressure
• International competition
• Increasing regulatory scrutiny
• Sustainability commitments
• Student expectations shaped by commercial service standards

In many institutions, supply chain maturity has not kept pace with organisational complexity, resulting in fragmented systems and inconsistent performance.

Procurement in education: beyond price

Procurement plays a central role in education supply chains, but its effectiveness is often constrained by legacy models.

Common challenges include:

• Category strategies that are outdated or incomplete
• Limited spend visibility across institutions
• Contracts that are difficult to govern locally
• Focus on price rather than total cost and service outcomes

Effective procurement in education must balance:

• Cost efficiency
• Service reliability
• Safety and compliance
• Supplier capability
• Sustainability and social outcomes

This requires procurement to be closely integrated with operational realities, not operating in isolation.

Inventory and materials management: the quiet problem

Inventory is one of the least visible — yet most costly — elements of education supply chains.

Examples include:

• Teaching materials stored across classrooms and campuses
• Spare parts for facilities and equipment
• Laboratory consumables
• IT peripherals and devices

Without structured inventory management, organisations experience:

• Overstocking “just in case”
• Stock expiring or becoming obsolete
• Inconsistent availability
• Time wasted searching for items

Improving inventory management is often a quick win, but it requires clear ownership, simple processes and fit-for-purpose tools.

Logistics, warehousing and internal distribution

Education supply chains are not just about buying goods — they are about moving them to the right place at the right time.

Challenges often include:

• Campuses not designed for efficient goods movement
• Congested loading docks
• Limited coordination between suppliers and facilities teams
• Safety risks associated with ad hoc deliveries

As institutions grow and densify, internal logistics becomes increasingly important to service quality and safety.

Facilities, assets and maintenance supply chains

Education providers are asset-intensive organisations.

They manage:

• Buildings of varying age and condition
• Mechanical, electrical and safety systems
• Teaching and research equipment

Maintenance supply chains are often reactive, driven by:

• Incomplete asset registers
• Poor demand forecasting for parts and services
• Limited integration between facilities and procurement

This drives higher cost and increased risk, particularly for critical infrastructure.

Sustainability and education supply chains

Schools, TAFEs and universities are under growing pressure to demonstrate leadership in sustainability.

Supply chains play a major role in:

• Carbon emissions
• Waste generation
• Ethical sourcing
• Circular economy initiatives

However, sustainability goals often struggle to translate into day-to-day procurement and logistics decisions.

Improving supply chain design can enable:

• Reduced transport emissions
• Better waste segregation and recycling
• Longer asset life
• More responsible supplier practices

Data, systems and visibility

One of the biggest barriers to improving education supply chains is lack of visibility.

Common issues include:

• Spend data spread across multiple systems
• Inconsistent item and supplier master data
• Limited reporting capability
• Manual workarounds filling system gaps

Without reliable data, leaders struggle to prioritise improvement efforts or measure progress.

Governance and operating models

Education supply chains are often governed through a mix of:

• Central policies
• Local practices
• Informal workarounds

This can create confusion around:

• Decision rights
• Accountability
• Standardisation vs autonomy

Clear operating models help institutions strike the right balance between control and flexibility.

What good looks like in education supply chains

High-performing education supply chains share several characteristics:

• Clear visibility of spend, inventory and assets
• Simple, standardised processes where scale matters
• Flexibility where local context requires it
• Strong alignment between procurement and operations
• Practical use of data to inform decisions
• Governance that enables, not constrains

Importantly, they are designed around the realities of education, not imported wholesale from commercial sectors.

How Trace Consultants can help

Trace Consultants works with schools, TAFEs and universities across Australia and New Zealand to design and improve education supply chains in practical, achievable ways.

Our support typically includes:

• End-to-end supply chain reviews across education environments
• Procurement strategy and category management support
• Spend analysis and cost-out programs
• Inventory and materials management design
• Logistics, warehousing and internal distribution reviews
• Asset and maintenance supply chain optimisation
• Operating model and governance design
• Technology and data enablement support

We focus on solutions that work within education funding, workforce and governance constraints, delivering measurable improvements without unnecessary complexity.

Final reflections

Education supply chains may not be as visible as those in retail or manufacturing, but their impact is just as significant.

When supply chains are poorly designed, educators and administrators spend time solving operational problems instead of focusing on students and learning outcomes. When they are designed well, they quietly enable safer environments, better service, and more effective use of limited funding.

As education systems across Australia and New Zealand face increasing pressure to do more with less, supply chain capability will play a critical role in sustainability and performance.

The opportunity is not to make education operate like a factory or a retailer, but to apply the right supply chain principles — thoughtfully, pragmatically, and in service of education’s core mission.

What Differentiates Great Consulting from Good Consulting — When It Comes to Supply Chain and Procurement Expertise

Across Australia and New Zealand, organisations are engaging consultants more frequently than ever. Cost pressure, supply chain disruption, labour constraints, regulatory change, and rapid technology evolution have made supply chain and procurement executive priorities rather than back-office concerns.

Yet despite the volume of consulting spend, a quiet frustration exists across many organisations.

Executives will often say that the advice was sound, the presentations were polished, and the frameworks were familiar — but the outcomes fell short. Recommendations were difficult to implement, internal teams struggled to translate strategy into action, and momentum faded once the consultants left.

This is where the distinction between good consulting and great consulting becomes clear.

Good consulting provides answers.
Great consulting delivers outcomes.

In supply chain and procurement — disciplines grounded in operational reality — this difference matters more than in almost any other area of the business.

Why the bar for consulting has changed

Historically, consulting was about access to thinking, benchmarks, and frameworks that organisations could not easily develop themselves. That advantage has narrowed.

Today:

• Data is more accessible
• Best practice frameworks are widely known
• Technology vendors provide embedded “advice”
• Internal teams are more capable and experienced

What organisations now need is not generic insight, but context-specific judgement, practical design, and execution capability.

Supply chain and procurement leaders are no longer asking:

• “What should best practice look like?”

They are asking:

• “What will actually work here, with our assets, our people, and our constraints?”

That is where great consulting differentiates itself.

The limits of generic supply chain and procurement advice

Supply chain and procurement functions sit at the intersection of:

• Strategy
• Operations
• Technology
• People
• Physical infrastructure

Advice that does not account for all five dimensions rarely survives contact with reality.

Common symptoms of “good but not great” consulting include:

• Strategies that assume perfect data and infinite change capacity
• Target operating models that look impressive but ignore workforce realities
• Procurement savings targets disconnected from service impacts
• Technology recommendations that underestimate implementation effort
• Transformation roadmaps that rely on capability that does not yet exist

These are not mistakes of intelligence. They are mistakes of distance from execution.

What great consulting looks like in supply chain and procurement

Great consulting in this space is differentiated by a small number of critical characteristics.

1. Deep domain expertise, not surface-level familiarity

Supply chain and procurement are often treated as generic management disciplines. In reality, they are highly technical and deeply contextual.

Great consultants understand:

• How warehouses actually operate, not just how they are modelled
• How transport contracts behave under volume volatility
• How procurement categories interact with service outcomes
• How planning systems fail in the absence of clean master data
• How labour models constrain theoretical efficiency gains

This depth allows them to distinguish between what is theoretically attractive and what is operationally viable.

Good consultants know the language.
Great consultants know the work.

2. Comfort with complexity and trade-offs

Supply chain and procurement decisions almost always involve trade-offs:

• Cost vs service
• Efficiency vs resilience
• Standardisation vs flexibility
• Centralisation vs responsiveness

Good consulting often tries to optimise one dimension in isolation.

Great consulting helps leaders make informed trade-offs, clearly articulating:

• What improves
• What gets harder
• What risks increase or reduce
• What must change to make a decision stick

This clarity builds confidence and accelerates decision-making.

3. Designing for the organisation, not the slide deck

One of the most common failure points in consulting engagements is the gap between design and adoption.

Great consultants design solutions that:

• Match the organisation’s maturity
• Reflect its culture and decision-making style
• Consider existing capability and capacity
• Align with how work actually gets done

This may mean:

• Phasing change rather than delivering a “big bang”
• Accepting interim solutions that build capability over time
• Simplifying designs to increase adoption

Great consulting values progress over perfection.

4. Integration of supply chain and procurement thinking

In many organisations, supply chain and procurement are still treated as separate disciplines. In practice, they are deeply interdependent.

Examples include:

• Procurement decisions driving transport and warehousing complexity
• Sourcing strategies impacting inventory and working capital
• Contract structures shaping operational flexibility
• Category strategies influencing risk exposure

Great consulting considers the end-to-end system, not isolated functions.

This integrated lens is critical to delivering sustainable outcomes rather than shifting problems from one area to another.

5. A bias toward execution, not just analysis

Analysis is necessary, but it is not sufficient.

Great consulting places strong emphasis on:

• Implementation sequencing
• Change management
• Capability uplift
• Governance and accountability
• Measuring what actually changes

In supply chain and procurement, execution is where value is realised — or lost.

Consultants who have lived through implementations understand:

• Where resistance will emerge
• Which decisions stall progress
• How quickly enthusiasm fades without visible wins

This experience shapes more realistic and durable recommendations.

6. Understanding physical assets and constraints

Unlike many corporate functions, supply chains are anchored in physical reality:

• Warehouses
• Transport networks
• Production assets
• Back-of-house infrastructure
• Equipment and automation

Great consulting recognises that you cannot design supply chains in isolation from these constraints.

Strategies that ignore:

• Dock capacity
• Storage density
• Material handling limitations
• Workforce ergonomics
• Site access and zoning

often fail at the first hurdle.

Great consultants think spatially and operationally, not just strategically.

7. Clarity on value, not just activity

Good consulting often delivers:

• Lots of recommendations
• Extensive roadmaps
• Detailed documentation

Great consulting is ruthless about:

• What actually drives value
• What can realistically be delivered
• What matters now vs later

In procurement, this means focusing on:

• Categories with genuine leverage
• Scope and demand management, not just rates
• Contracting models that can be governed

In supply chain, it means:

• Fixing bottlenecks before optimising the system
• Improving data quality before advanced planning
• Stabilising operations before transformation

8. Credibility with frontline and executives alike

One of the clearest signals of great consulting is credibility across all levels of the organisation.

Frontline teams trust consultants who:

• Understand operational realities
• Respect existing knowledge
• Offer practical, workable ideas

Executives trust consultants who:

• Communicate clearly
• Quantify impact realistically
• Highlight risks honestly
• Support decision-making, not just analysis

Great consulting bridges these worlds rather than sitting above them.

The risks of “framework-first” consulting

Frameworks have value, but they are tools — not outcomes.

In supply chain and procurement, over-reliance on generic frameworks often leads to:

• Solutions that look right but feel wrong
• Language that does not resonate with operators
• Designs that assume capabilities that do not exist

Great consulting uses frameworks as scaffolding, not as the solution itself.

Why this matters more now than ever

The environment facing supply chain and procurement leaders is unforgiving.

They are dealing with:

• Persistent cost pressure
• Heightened service expectations
• Labour shortages
• Increased regulatory scrutiny
• Supply disruption and geopolitical risk
• Rapid technology change

In this context, there is little tolerance for advice that cannot be executed.

Organisations are no longer paying for ideas alone. They are paying for judgement, experience, and results.

How Trace Consultants can help

Trace Consultants was founded on the belief that specialist, execution-focused consulting delivers better outcomes than generalist advice in complex operational domains.

Our work in supply chain and procurement is grounded in:

• Deep functional expertise
• Hands-on operational experience
• Practical design that reflects real constraints
• An integrated view across planning, procurement, logistics, and workforce

We typically support organisations with:

• Supply chain and procurement strategy grounded in operational reality
• Network, warehousing, and transport design
• Demand planning, inventory optimisation, and S&OP
• Procurement reviews, category strategies, and cost-out programs
• Operating model and workforce design
• Technology selection, configuration, and implementation support

We focus on helping organisations make better decisions and execute them effectively, rather than delivering generic recommendations.

Choosing the right consulting partner

For executives considering consulting support in supply chain and procurement, the most important questions are rarely about brand or scale.

More useful questions include:

• Do they deeply understand our operating environment?
• Can they explain trade-offs clearly?
• Have they implemented what they recommend?
• Will they design for our organisation, not an idealised version of it?
• Are they willing to challenge us when needed?

The answers to these questions usually reveal the difference between good consulting and great consulting.

Final thoughts

Supply chain and procurement are disciplines where theory meets reality every day. Advice that cannot survive that reality has limited value.

Great consulting does not just describe what excellence looks like — it helps organisations get there, step by step, within their constraints.

As expectations on supply chains continue to rise across Australia and New Zealand, the organisations that succeed will be those that partner with advisors who bring depth, pragmatism, and execution capability, not just polished slides.

In the end, great consulting is not about having the best answer.

It is about helping organisations deliver better outcomes — consistently, sustainably, and in the real world.

Online retail has transformed customer expectations across Australia and New Zealand. Fast delivery, flexible fulfilment options, and frictionless returns are no longer differentiators — they are baseline expectations.

While most retailers have invested heavily in forward logistics capabilities such as fulfilment centres, last-mile delivery, and order management systems, reverse logistics has often lagged behind. Returns are frequently treated as an unavoidable cost of doing business rather than a supply chain capability that can be actively designed, optimised, and improved.

As return volumes grow, particularly in categories such as apparel, consumer electronics, homewares, and health products, reverse logistics has become one of the largest hidden cost drivers in online retail. It impacts warehousing efficiency, inventory accuracy, transport spend, labour productivity, sustainability outcomes, and — critically — customer experience.

This article explores how online retailers can improve reverse logistics performance, reduce cost-to-serve, and design returns processes that support both commercial outcomes and customer loyalty.

Why reverse logistics matters more than ever in online retail

Return rates in online retail are materially higher than in physical stores. Customers buy multiple sizes, colours, or variants with the intention of returning items that do not meet expectations. Generous returns policies are often necessary to compete, but they come at a cost.

Poorly designed reverse logistics leads to:

• High manual handling and rework
• Congestion in warehouses not designed for returns
• Inventory sitting in limbo and unavailable for sale
• Increased transport and handling costs
• Write-offs due to slow processing or damage
• Poor visibility of return reasons and root causes

At the same time, returns play a major role in shaping customer perception. A slow, confusing, or inflexible returns experience can undermine an otherwise strong brand and fulfilment proposition.

Improving reverse logistics is therefore not just a supply chain issue — it is a commercial, operational, and customer experience priority.

Understanding reverse logistics beyond “returns”

Reverse logistics is often used interchangeably with “returns,” but in practice it is broader and more complex.

Reverse logistics can include:

• Customer returns
• Exchanges
• Repairs and refurbishments
• Warranty claims
• Recalls
• End-of-life or recycling flows
• Unsold inventory moving back through the network

Each of these flows has different handling requirements, cost profiles, and decision points. Treating all returned products the same way is one of the most common and costly mistakes retailers make.

The true cost of poor reverse logistics

Many retailers underestimate the total cost of reverse logistics because it is spread across multiple functions.

Costs typically sit in:

• Transport (returns freight, consolidation, cross-dock movements)
• Warehousing (handling, storage, congestion, space utilisation)
• Labour (manual inspection, sorting, repacking)
• Inventory (markdowns, write-offs, obsolescence)
• Customer service (queries, disputes, refunds)
• Technology (workarounds, manual processing)

When these costs are not visible end-to-end, decision-making becomes reactive and fragmented.

Retailers that take a structured approach to reverse logistics often find that returns erode margin far more than initially assumed, particularly when return volumes spike during peak trading periods.

Common challenges in online retail reverse logistics

Across Australia and New Zealand, several challenges appear consistently in online retail environments.

Returns designed around policy, not operations

Returns policies are often created by commercial or marketing teams without fully considering operational implications. This can result in:

• Unpredictable return volumes
• Inconsistent handling rules
• Manual decision-making on the warehouse floor

Warehouses not designed for returns

Many fulfilment centres are optimised for outbound flow, not inbound inspection and sorting. This leads to:

• Congestion at receiving docks
• Inefficient layouts
• Disruption to forward picking operations

Poor inventory visibility

Returned stock often sits in quarantine or limbo locations with limited system visibility, delaying resale and increasing markdown risk.

One-size-fits-all handling

High-value, low-value, resellable, damaged, and unsellable items are frequently processed through the same workflow, driving unnecessary cost.

Limited insight into return drivers

Without structured data on why items are returned, retailers struggle to address root causes such as product quality issues, inaccurate descriptions, or sizing problems.

Designing a better reverse logistics strategy

Improving reverse logistics starts with treating it as a designed capability, not an afterthought.

Segment reverse flows by value and outcome

Not all returns deserve the same treatment. Retailers should segment returns based on factors such as:

• Product value
• Condition on return
• Speed-to-resale requirement
• Likelihood of refurbishment or repair
• Sustainability considerations

This enables differentiated handling paths rather than a single, inefficient process.

Decide where returns should flow

Returns do not always need to return to the original fulfilment centre.

Options may include:

• Dedicated returns processing facilities
• Store-based consolidation
• Third-party returns hubs
• Direct-to-supplier or refurbisher flows

Network design plays a major role in reverse logistics cost and responsiveness.

Warehouse and fulfilment considerations for returns

Reverse logistics places very different demands on warehouse operations compared to outbound fulfilment.

Key considerations include:

• Dedicated space for returns receiving and inspection
• Clear segregation between sellable and non-sellable stock
• Fast-track paths for items suitable for immediate resale
• Ergonomic workstations for inspection and repacking
• Labour models that can flex with return volume variability

Retailers that explicitly design returns into warehouse layouts typically achieve faster cycle times and lower handling costs.

Inventory management and speed to resale

One of the biggest opportunities in reverse logistics is reducing the time between return and resale.

Delays lead to:

• Missed sales opportunities
• Increased markdowns
• Higher obsolescence risk

Improvement levers include:

• Clear decision rules for resale vs write-off
• Immediate system updates when condition is confirmed
• Priority processing for fast-moving SKUs
• Alignment between returns teams and inventory planners

When returns are processed quickly and accurately, they become a source of recovered value rather than margin erosion.

Using data to reduce returns at the source

Improving reverse logistics is not only about processing returns better — it is also about preventing avoidable returns.

Data from returns can be used to:

• Identify product quality issues
• Improve product descriptions and imagery
• Address sizing or specification inaccuracies
• Highlight packaging weaknesses
• Inform supplier performance discussions

Retailers that actively analyse return reasons often see improvements not just in logistics costs, but in customer satisfaction and conversion rates.

Sustainability and reverse logistics

Returns have a material environmental impact due to additional transport, packaging, and waste.

Improving reverse logistics can support sustainability objectives by:

• Reducing unnecessary transport movements
• Increasing resale and refurbishment rates
• Improving recycling and end-of-life pathways
• Minimising landfill through better sorting and recovery

For many organisations, reverse logistics is an increasingly important part of their broader sustainability narrative.

Technology and systems enablement

Technology plays a critical role in enabling efficient reverse logistics, but only when aligned to process and operating model design.

Key system considerations include:

• Clear visibility of returned inventory status
• Integration between customer service, warehouse, and finance systems
• Simple workflows for inspection and disposition decisions
• Data capture on return reasons and condition
• Reporting that supports continuous improvement

Technology should support faster decisions and clearer accountability, not add complexity.

Governance and ownership

One of the reasons reverse logistics underperforms is unclear ownership. Responsibilities are often split across:

• Ecommerce
• Customer service
• Warehousing
• Transport
• Finance

Improvement requires:

• Clear accountability for reverse logistics performance
• Defined KPIs covering cost, speed, recovery, and customer experience
• Regular review of return drivers and trends

Without governance, reverse logistics remains reactive and fragmented.

How Trace Consultants can help

Trace Consultants works with online retailers to design and improve reverse logistics capabilities that balance customer experience, cost-to-serve, and operational efficiency.

Our support commonly includes:

• Reviewing current reverse logistics processes and cost drivers
• Mapping end-to-end returns flows across transport, warehousing, and systems
• Designing segmented reverse logistics strategies
• Supporting warehouse layout and operating model changes
• Improving inventory visibility and speed to resale
• Developing performance metrics and governance frameworks
• Supporting technology and system alignment

Our approach is practical and grounded in how supply chains actually operate, helping retailers move beyond reactive returns handling to deliberate, data-driven reverse logistics design.

Turning reverse logistics into a competitive advantage

As online retail continues to grow across Australia and New Zealand, reverse logistics will only increase in scale and importance.

Retailers that treat returns as a necessary evil will continue to see margin leakage, operational disruption, and frustrated customers. Those that invest in structured reverse logistics design will be better positioned to:

• Control cost-to-serve
• Improve inventory recovery
• Support sustainability objectives
• Enhance customer trust and loyalty

Reverse logistics is no longer just about managing returns — it is about unlocking value from what comes back.

The question is not whether reverse logistics deserves attention, but whether it is being designed with the same rigour as the forward supply chain.

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Across Australia and New Zealand, organisations are under increasing pressure to do more with ageing assets, tighter budgets, and higher service expectations. Whether it is a hospital managing critical clinical equipment, a local council maintaining public infrastructure, a university operating large estates, or a commercial organisation reliant on plant and equipment, the same challenge applies: how do you maintain assets reliably without overspending or increasing risk?

The answer rarely sits at either extreme.

Too much preventative maintenance can inflate cost and administrative burden. Too much reactive maintenance leads to unplanned downtime, safety incidents, and asset failure. The organisations that perform best sit in the middle — supported by clear asset visibility, structured maintenance strategies, and well-defined operating models.

At the heart of this balance sits effective asset management, underpinned by accurate asset lists and maintenance programs that are designed deliberately, not inherited by default.

This article explores how organisations can design fit-for-purpose preventative and reactive maintenance programs, why asset registers matter more than most realise, and how structured asset management enables better financial, operational, and risk outcomes.

Why asset management has become a strategic issue, not just an operational one

Asset management is often viewed as a back-of-house function — something handled by facilities, engineering, or maintenance teams. In practice, it has far broader implications.

Poorly managed assets drive:

• Unplanned downtime and service disruption
• Higher safety and compliance risk
• Escalating reactive maintenance costs
• Inefficient contractor spend
• Shortened asset life and premature replacement
• Weak capital planning and budgeting decisions

Conversely, organisations with mature asset management practices are better positioned to:

• Predict and prevent failures
• Optimise maintenance spend
• Extend asset life
• Improve safety and compliance outcomes
• Make informed capital investment decisions
• Align maintenance activity to service criticality

In sectors such as healthcare, aged care, education, transport, utilities, and hospitality, asset reliability is increasingly linked to service quality and reputation, not just cost control.

Preventative vs reactive maintenance: finding the right balance

A common misconception is that preventative maintenance is always “better” than reactive maintenance. In reality, the right strategy depends on asset criticality, failure risk, usage patterns, and consequence of failure.

Preventative maintenance

Preventative maintenance involves scheduled activities designed to reduce the likelihood of asset failure. These may be time-based, usage-based, or condition-based.

It is most effective where:

• Asset failure carries high safety or service risk
• Downtime is costly or disruptive
• Regulatory compliance requires formal inspection and servicing
• Predictable wear patterns exist

However, over-application of preventative maintenance can result in:

• Unnecessary servicing
• Increased labour and contractor costs
• Administrative overload
• Maintenance activity that adds little value

Reactive maintenance

Reactive maintenance occurs when assets are repaired after failure.

It can be appropriate where:

• Asset criticality is low
• Failure has limited impact
• Repair is inexpensive and quick
• Redundancy exists

The challenge arises when reactive maintenance becomes the default approach for critical assets — often due to poor asset visibility, incomplete data, or lack of planning capability.

The goal is not to eliminate reactive maintenance, but to apply it intentionally, supported by data rather than habit.

Why asset lists are the foundation of effective maintenance programs

It is impossible to manage, maintain, or optimise assets that are not clearly defined.

Many organisations struggle with:

• Incomplete asset registers
• Inconsistent naming conventions
• Missing location data
• Unclear ownership and responsibility
• Assets grouped too broadly or inconsistently
• Systems that do not reflect what exists on site

Without a reliable asset list, maintenance programs become reactive by default. Teams are forced to respond to issues as they arise, rather than managing assets proactively.

What a fit-for-purpose asset list should include

An effective asset register should go beyond a simple list of equipment. At a minimum, it should capture:

• Asset description and classification
• Unique asset ID
• Physical location
• Asset owner or responsible role
• Manufacturer and model details
• Installation or commissioning date (where available)
• Condition and criticality rating
• Maintenance requirements and history

The level of detail should be proportionate to asset importance. Not every asset requires the same depth of information, but every critical asset should be clearly visible and traceable.

Asset criticality: not all assets deserve the same treatment

One of the most common mistakes in maintenance design is treating all assets equally.

Effective maintenance programs are built around asset criticality, which considers:

• Impact of failure on safety
• Impact of failure on service delivery
• Compliance and regulatory consequences
• Cost and time to repair
• Availability of redundancy

Criticality assessments allow organisations to:

• Prioritise maintenance effort
• Allocate preventative maintenance where it matters most
• Reduce unnecessary activity on low-risk assets
• Align maintenance spend to risk exposure

Without this lens, maintenance programs often become bloated, expensive, and poorly targeted.

Designing a preventative maintenance framework that actually works

A strong preventative maintenance framework is not simply a schedule of tasks. It is an operating model that aligns people, process, technology, and governance.

Key elements include:

1. Clear maintenance strategies by asset class

Different asset classes require different approaches. For example:

• Life-safety systems
• Mechanical and electrical plant
• Clinical or production equipment
• Building fabric and finishes
• Mobile assets

Each class should have defined maintenance strategies that reflect risk, usage, and regulatory requirements.

2. Realistic maintenance intervals

Maintenance intervals should be based on:

• Manufacturer recommendations
• Operating conditions
• Historical failure patterns
• Asset age and condition

Blindly applying generic intervals often results in either under-maintenance or unnecessary cost.

3. Defined roles and responsibilities

Maintenance programs fail when accountability is unclear. Organisations need clarity on:

• Who owns asset data
• Who approves maintenance strategies
• Who executes maintenance (internal vs external)
• Who monitors performance and outcomes

4. Practical documentation

Maintenance documentation should be:

• Clear and accessible
• Proportionate to asset risk
• Integrated with day-to-day operations

Overly complex documentation often leads to non-compliance in practice.

Designing reactive maintenance so it does not undermine performance

Reactive maintenance will always exist. The difference between high-performing organisations and struggling ones is how well reactive maintenance is controlled.

Effective reactive maintenance design includes:

• Clear triage and prioritisation processes
• Defined response time expectations
• Transparent escalation pathways
• Root cause analysis for repeat failures
• Feedback loops into preventative strategies

When reactive maintenance is tracked and analysed properly, it becomes a source of insight, not just cost.

The role of systems and data in asset management

Technology alone does not solve asset management problems, but poor systems can make good practice impossible.

Common challenges include:

• Asset data spread across spreadsheets, systems, and contractors
• CMMS or EAM systems that are poorly configured
• Low data quality undermining trust in reports
• Systems that do not align with how teams actually work

The objective should be:

• A single source of truth for asset data
• Systems configured to reflect the asset hierarchy
• Maintenance workflows that match operational reality
• Reporting that supports decision-making, not just compliance

Importantly, system design should follow process clarity, not the other way around.

Governance and assurance: keeping maintenance programs effective over time

Asset management is not a one-off exercise. Over time:

• Assets age
• Usage patterns change
• Risk profiles evolve
• Regulatory requirements shift

Effective governance ensures maintenance programs remain relevant.

This includes:

• Periodic review of asset criticality
• Regular validation of asset registers
• Performance monitoring against maintenance KPIs
• Clear decision rights for changes to maintenance strategies

Without governance, even well-designed programs gradually degrade.

Common pitfalls organisations encounter

Across Australia and New Zealand, several patterns appear consistently:

• Asset lists built once and never updated
• Maintenance strategies inherited from previous operators
• Over-reliance on contractors without internal oversight
• Systems implemented without clear data standards
• Reactive maintenance masking underlying issues
• Capital planning disconnected from asset condition data

These issues rarely stem from lack of effort. More often, they arise from lack of structure and clarity.

How Trace Consultants can help

Trace Consultants supports organisations to design and implement practical, risk-based asset management and maintenance frameworks that align with operational reality.

Our support typically includes:

• Reviewing existing asset registers and maintenance practices
• Designing fit-for-purpose asset hierarchies and asset lists
• Establishing asset criticality frameworks
• Defining preventative and reactive maintenance strategies
• Clarifying roles, responsibilities, and governance
• Supporting system configuration and data alignment
• Developing documentation that is usable, not theoretical

Our focus is on helping organisations move from reactive decision-making to structured, data-driven asset management, without over-engineering solutions or creating unnecessary administrative burden.

We work across sectors where asset reliability, safety, and cost control are critical, bringing a practical lens that balances operational needs with strategic outcomes.

Bringing it all together

Effective asset management is not about choosing preventative over reactive maintenance. It is about designing a balanced, intentional approach grounded in accurate asset data, clear priorities, and realistic operating models.

Organisations that invest in:

• Clear asset lists
• Thoughtful maintenance strategies
• Strong governance
• Practical systems

are better positioned to reduce risk, control costs, and extend asset life — while maintaining service reliability.

As asset portfolios grow more complex and budgets remain constrained, this capability will only become more important.

The question for many organisations is no longer whether they can afford to improve asset management — but whether they can afford not to.

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Most procurement functions are built for steady-state optimisation. Category strategies are reviewed annually, contracts roll over, and savings are delivered incrementally through sourcing cycles and supplier management. In normal conditions, this approach works.

But every organisation eventually faces a procurement reset moment.

Margins compress. Volumes soften. Input costs rise faster than revenue. Capital tightens. Boards and executive teams demand immediate, material cost reduction rather than marginal gains. Suddenly, the usual pace and structure of procurement activity is no longer sufficient.

In these moments, organisations need a different approach – one that is more focused, more intensive, and more commercially assertive. This is where the concept of a procurement war room becomes relevant.

This article explores what procurement reset moments look like, how to set up a war room to respond effectively, and how to negotiate with suppliers to reduce costs while preserving long-term value and supply continuity.

What is a procurement reset moment?

A procurement reset moment is not simply a budget tightening exercise. It is a point at which the organisation recognises that existing commercial arrangements no longer reflect its financial reality or risk appetite.

Common triggers include:

• Sharp margin or profitability decline
• Revenue contraction or demand volatility
• Step-change increases in input or supplier costs
• Liquidity pressure or cash preservation requirements
• Post-merger or restructuring integration
• Board or shareholder-driven cost reduction mandates

What distinguishes a reset moment from normal cost management is urgency and scale. The organisation cannot wait for contracts to expire or savings to emerge gradually. It needs impact within weeks or months, not years.

Why traditional procurement approaches fall short

In reset conditions, traditional procurement operating models often struggle.

Category managers are incentivised to follow structured sourcing timelines. Governance processes are designed to manage risk rather than accelerate decisions. Negotiations are framed around annual increments rather than step-change outcomes.

This can lead to:

• Fragmented supplier engagement
• Inconsistent negotiation positions across categories
• Slow decision-making
• Missed opportunities to reset commercial baselines

A procurement war room is designed to cut through this inertia.

What is a procurement war room?

A procurement war room is a temporary, focused operating model designed to mobilise the organisation around rapid cost reduction and commercial reset.

It is not about aggressive or unethical behaviour. Nor is it about breaking contracts indiscriminately. At its best, a war room is structured, data-driven and disciplined.

Its purpose is to:

• Create a single source of truth on spend and savings opportunities
• Align executives, procurement, finance and operations
• Prioritise the highest-impact actions
• Enable faster, more confident negotiations with suppliers
• Track delivery rigorously

The war room is as much about governance and decision-making as it is about negotiation.

Setting up a procurement war room

Establishing clear objectives and boundaries

The first step is clarity. Organisations must be explicit about what they are trying to achieve and within what constraints.

Key questions include:

• What level of cost reduction is required, and by when?
• Which spend categories are in scope?
• What risks are unacceptable (service, safety, compliance)?
• What commercial levers are on the table?

Without clear boundaries, war rooms can either become unfocused or push too far, creating unintended consequences.

Building the right team

A procurement war room requires a cross-functional team with authority.

This typically includes:

• Senior procurement leadership
• Finance representatives to validate savings
• Operational leaders who understand service implications
• Legal or commercial advisors where required

Importantly, participants must be empowered to make decisions. War rooms fail when every decision needs to be escalated through layers of approval.

Creating a single source of truth on spend

Speed requires clarity. War rooms rely on rapid consolidation of spend data across categories, suppliers and contracts.

This often reveals:

• Fragmentation of spend across multiple suppliers
• Legacy pricing arrangements that have drifted over time
• Inconsistencies between contracted and actual rates
• Categories that have not been tested for years

Perfect data is not required. Directionally correct insight, validated quickly, is usually sufficient to prioritise action.

Identifying cost reduction levers

Not all savings come from price reductions. Effective war rooms consider a broad set of levers, including:

• Rate and price renegotiation
• Scope rationalisation or specification changes
• Volume consolidation
• Contract term and commitment trade-offs
• Indexation and escalation resets
• Demand reduction or consumption control

The most effective negotiations are those that combine multiple levers rather than focusing solely on headline price.

Prioritising suppliers and categories

War rooms must be selective. Trying to renegotiate everything at once dilutes effort and credibility.

Prioritisation should consider:

• Size of spend and savings potential
• Market conditions and supplier dependence
• Contractual flexibility
• Speed to impact
• Operational criticality

This allows the organisation to focus energy where it will have the greatest effect.

Preparing for supplier negotiations

Developing a clear commercial narrative

Suppliers are more likely to engage constructively when they understand the context.

A clear narrative typically includes:

• The organisation’s current financial and operating reality
• Why existing arrangements are no longer sustainable
• The desire for a collaborative reset rather than a one-sided demand
• The consequences of inaction

This does not mean sharing confidential information, but it does mean being honest about the need for change.

Understanding supplier economics

Effective negotiation requires understanding how suppliers make money.

Key considerations include:

• Cost drivers and margin structure
• Volume sensitivity
• Fixed versus variable cost components
• Capacity utilisation

This insight allows negotiators to propose changes that reduce cost while preserving supplier viability.

Aligning internal stakeholders before engaging suppliers

Nothing undermines negotiations faster than internal misalignment.

Before approaching suppliers, organisations must be aligned on:

• Target outcomes and fallback positions
• Acceptable trade-offs
• Decision authority during negotiations

This avoids mixed messages and last-minute reversals.

Conducting negotiations in a reset environment

Moving quickly, but respectfully

Reset negotiations often need to happen at pace. However, urgency does not justify poor behaviour.

Respectful, transparent engagement preserves long-term relationships and reduces the risk of supplier disengagement or retaliation.

Using data to anchor discussions

War rooms rely heavily on data to anchor negotiations. This might include:

• Historical pricing trends
• Benchmark ranges
• Volume and utilisation data
• Scope and service comparisons

Data shifts discussions from emotion to evidence.

Avoiding one-size-fits-all approaches

Different suppliers require different strategies. Strategic partners, sole suppliers and highly competitive markets should not be treated the same way.

A nuanced approach increases the likelihood of sustainable outcomes.

Managing risk during cost reduction negotiations

Cost reduction achieved at the expense of supply continuity or service quality is often false economy.

War rooms should actively manage risks such as:

• Supplier financial distress
• Reduced service levels
• Loss of innovation or support
• Contractual disputes

Risk assessment should be embedded into decision-making, not treated as an afterthought.

Tracking savings and ensuring delivery

One of the most common failures in procurement resets is overestimating realised savings.

Effective war rooms track:

• Gross versus net savings
• Timing of benefit realisation
• Dependencies and risks
• Ongoing compliance

Clear accountability and finance validation are essential to ensure that negotiated outcomes translate into real financial impact.

Transitioning out of the war room

Procurement war rooms are not meant to be permanent.

Once immediate objectives are achieved, organisations should:

• Embed learnings into category strategies
• Reset governance and performance metrics
• Strengthen supplier management disciplines
• Avoid slipping back into legacy behaviours

The goal is not just short-term relief, but a more resilient commercial model.

How Trace Consultants can help

Trace Consultants supports Australian and New Zealand organisations through procurement reset moments, helping them deliver rapid, sustainable cost reduction without compromising operational integrity.

Our support typically includes:

Rapid spend and opportunity assessment

Helping organisations quickly identify where the real savings opportunities lie and prioritise action.

War room design and mobilisation

Establishing governance, cadence, roles and reporting to enable focused decision-making and pace.

Negotiation strategy and support

Supporting preparation and execution of supplier negotiations with data-driven insight and clear commercial positioning.

Risk and impact management

Ensuring cost reduction initiatives consider service, supply and compliance risks alongside financial outcomes.

Independent, practical advice

Trace is not aligned to suppliers, vendors or sourcing platforms. Our advice is independent, commercially grounded and focused on outcomes.

When should organisations consider a procurement war room?

Common signals include:

• Board-level cost reduction targets with short timeframes
• Rapid deterioration in financial performance
• Limited confidence in existing procurement levers
• Fragmented supplier negotiations across the business
• Pressure to preserve cash and liquidity

In these situations, incremental improvement is rarely sufficient.

Final thoughts

Procurement reset moments are challenging, but they also create opportunity.

A well-designed procurement war room enables organisations to act decisively, negotiate from a position of clarity, and reset commercial arrangements for the realities ahead.

For Australian and New Zealand organisations facing cost pressure and uncertainty, the difference between success and failure often comes down to preparation, discipline and the ability to engage suppliers with credibility and intent.

When done well, procurement resets do more than reduce cost – they strengthen commercial capability for the long term.

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From Evidence, Uniforms and Consumables to Disaster Relief Inventories, Weapons and Ammunition

Emergency response supply chains operate in a fundamentally different environment to commercial supply chains. They are not designed to maximise margin or optimise weekly service metrics. Their purpose is to ensure capability and preparedness – the ability to respond decisively, safely and consistently when the consequences of failure are severe.

Across Australia and New Zealand, emergency response organisations are responsible for managing some of the most complex and high-risk supply chains in the economy. These include evidence and exhibits, uniforms and personal protective equipment, disaster relief inventories, medical and operational consumables, specialist equipment, and in some cases weapons and ammunition.

When these supply chains perform well, they are largely invisible. When they fail, the impacts can be profound – operational disruption, compromised safety, reputational damage, and erosion of public trust.

This article explores how emergency response supply chains should be deliberately designed for capability and preparedness, the common challenges that undermine performance, and how organisations can strengthen resilience without driving unnecessary cost or complexity.

Why emergency response supply chains are different

Emergency response supply chains are defined by a set of characteristics that distinguish them from traditional commercial models.

Demand is unpredictable and asymmetric

Major incidents, natural disasters and operational surges do not follow neat demand curves. Demand can spike rapidly, vary significantly by location, and remain elevated for prolonged periods. Planning based purely on historical averages is insufficient.

Consequences of failure are high

Late or unavailable supplies are not just an inconvenience. They can delay response times, compromise safety, affect legal outcomes, or reduce the effectiveness of disaster relief efforts.

Inventory is diverse and highly regulated

Emergency response inventories often include items with strict handling, storage, traceability and chain-of-custody requirements. This is particularly true for evidence, controlled items, and sensitive equipment.

Accountability and scrutiny are intense

Public agencies operate under strong governance, audit and oversight frameworks. Supply chain decisions must withstand scrutiny long after the event.

Designing for capability and preparedness requires acknowledging these realities rather than forcing emergency supply chains into commercial moulds.

Defining capability and preparedness in supply chain terms

Capability and preparedness are often discussed in operational or strategic language, but they have very specific supply chain implications.

Capability

In supply chain terms, capability refers to the ability to reliably supply the right items, in the right condition, to the right place, at the right time, under both routine and surge conditions.

This includes:

• Sufficient inventory availability
• Fit-for-purpose storage and handling
• Trained personnel and clear processes
• Systems that support visibility and control

Preparedness

Preparedness is the readiness to respond – the degree to which the supply chain can scale, adapt and recover in the face of disruption.

This includes:

• Surge capacity and contingency stock
• Redundancy and alternative supply pathways
• Clear escalation and decision-making protocols
• Regular testing and review of assumptions

A supply chain can appear efficient day-to-day but still be unprepared for real-world emergencies.

Key inventory categories in emergency response supply chains

Evidence and exhibits

Evidence supply chains are among the most sensitive and complex. They demand absolute integrity, traceability and security.

Key design considerations include:

• Chain-of-custody requirements
• Secure storage and access controls
• Environmental controls for different evidence types
• Location strategy to support investigations and court processes
• Long-term retention and disposition management

Designing these supply chains is not just about storage capacity – it is about protecting the integrity of the justice system.

Uniforms and personal protective equipment

Uniforms and PPE are critical to both operational effectiveness and staff safety. Demand can fluctuate significantly due to recruitment cycles, operational tempo, and emergency events.

Challenges often include:

• Poor visibility of stock across locations
• Inconsistent sizing and fit availability
• Long lead times for specialised items
• Overstocking of slow-moving variants

Preparedness requires balancing availability with obsolescence and storage constraints.

Disaster relief inventories

Disaster relief supply chains must be designed to mobilise rapidly and operate in constrained, often damaged environments.

Typical items include:

• Shelter and temporary accommodation materials
• Food and water supplies
• Medical and hygiene kits
• Power, lighting and communications equipment

Key considerations include pre-positioning, transport access, rotation of stock to avoid expiry, and coordination with other agencies and partners.

Consumables and operational supplies

Consumables underpin day-to-day operations and surge response. While individually low value, collectively they are critical.

Common challenges include fragmented procurement, inconsistent standards, and limited forecasting linked to operational activity.

Improving visibility and standardisation can materially improve both preparedness and efficiency.

Weapons, ammunition and controlled items

Where applicable, these supply chains demand the highest levels of governance, security and accountability.

Design considerations include:

• Secure storage and transport
• Accurate tracking and reconciliation
• Clear authorisation and access protocols
• Robust audit trails

Preparedness in this context is inseparable from compliance and risk management.

Common challenges in emergency response supply chains

Despite their importance, many emergency response supply chains face recurring challenges.

Legacy network design

Storage and distribution networks often evolve over time rather than being deliberately designed. Facilities may no longer align with operational footprints or risk profiles.

Siloed ownership

Different inventory categories are frequently managed independently, leading to duplication, inconsistent standards and missed opportunities for integration.

Limited demand insight

Operational demand drivers are not always translated into supply chain planning assumptions, reducing the ability to anticipate and prepare for surges.

Over-reliance on informal knowledge

Critical processes are often dependent on experienced individuals rather than documented, repeatable systems. This creates risk during periods of disruption or staff turnover.

Designing emergency response supply chains for preparedness

Start with risk, not averages

Preparedness-focused design starts by understanding credible risk scenarios rather than average demand.

This includes:

• Identifying likely incident types and scales
• Understanding geographic exposure
• Assessing duration and intensity of response requirements
• Stress-testing existing supply arrangements

This approach ensures that preparedness investments are targeted rather than generic.

Align inventory strategy to operational intent

Not all items require the same level of readiness. Some may need immediate availability at multiple locations, while others can be centrally held with rapid deployment capability.

Clear segmentation of inventory by criticality, lead time and risk exposure supports more effective decisions.

Design networks for access and resilience

Facility location, capacity and connectivity matter enormously during emergencies.

Key questions include:

• Can stock be accessed if a primary site is unavailable?
• Are transport routes resilient to disruption?
• Is there sufficient redundancy for critical items?

Network design decisions should reflect operational reality, not just historical convenience.

Build visibility across the end-to-end supply chain

Preparedness depends on knowing what you have, where it is, and what condition it is in.

This requires:

• Accurate inventory records
• Consistent item master data
• Clear ownership and accountability
• Systems and processes that support real-time insight

Visibility enables faster, more confident decision-making during crises.

Integrate suppliers into preparedness planning

Suppliers are an extension of the emergency response supply chain.

Preparedness requires:

• Understanding supplier capacity and constraints
• Identifying single points of failure
• Establishing clear escalation and prioritisation protocols
• Periodically validating assumptions

Supplier resilience is as important as internal capability.

Governance, assurance and continuous readiness

Preparedness is not a one-off exercise. It requires ongoing governance and assurance.

Regular reviews and scenario testing

Supply chain assumptions should be revisited as risks, operations and environments change. Scenario testing helps identify gaps before they are exposed by real events.

Clear decision rights

During emergencies, clarity around who can authorise stock release, reallocation or emergency procurement is critical. Ambiguity slows response.

Performance metrics that support preparedness

Traditional efficiency metrics are insufficient. Preparedness-focused KPIs might include:

• Stock availability for critical items
• Time to mobilise and deploy
• Accuracy of inventory records
• Supplier responsiveness under surge conditions

These metrics focus on readiness rather than cost alone.

Balancing preparedness and efficiency

A common concern is that designing for preparedness will inevitably drive higher cost.

In reality, poor design often creates hidden inefficiencies: excess stock in the wrong locations, duplication, obsolescence, and expensive last-minute responses.

Well-designed emergency response supply chains strike a balance – investing deliberately where risk justifies it, while maintaining discipline elsewhere.

How Trace Consultants can help

Trace Consultants works with Australian and New Zealand emergency response organisations to design supply chains that are fit for purpose, resilient and accountable.

Our support typically includes:

Capability and preparedness assessments

Reviewing current-state supply chains against operational risk scenarios to identify gaps and priorities.

Inventory and network strategy

Designing inventory policies, storage networks and deployment models that align with operational needs and risk profiles.

Process and governance design

Clarifying roles, decision rights and escalation pathways to support confident action during emergencies.

Performance and assurance frameworks

Defining metrics and review processes that focus on readiness, resilience and continuous improvement.

Independent, solution-agnostic advice

Trace is not aligned to technology vendors, logistics providers or suppliers. Our advice is independent and focused on what will work in practice.

When should organisations revisit preparedness design?

Common triggers include:

• Increased frequency or severity of incidents
• Changes in operational footprint or mandate
• Audit findings or assurance concerns
• Repeated ad-hoc responses during emergencies
• Limited confidence in inventory visibility or availability

These signals often indicate that the supply chain has not kept pace with operational reality.

Final thoughts

Emergency response supply chains exist to perform under pressure. They must be deliberately designed for capability and preparedness, not left to evolve by accident.

From evidence and uniforms to disaster relief inventories, consumables, weapons and ammunition, the stakes are high. Getting supply chain design right is not just a logistics exercise – it is a core component of operational readiness and public confidence.

For Australian and New Zealand emergency response organisations, investing in supply chain preparedness is ultimately an investment in safer, more effective outcomes when they matter most.

Measuring DIFOT Effectively

On-time, in-full delivery performance sits at the heart of supply chain service. For decades, organisations across Australia and New Zealand have relied on DIFOT – Delivered In Full, On Time – as the primary measure of whether supply chains are doing what they are meant to do.

Yet despite its widespread use, DIFOT is frequently misunderstood, inconsistently measured, and poorly applied. In many organisations it has become a headline number that looks reassuring on dashboards but fails to drive better decisions or behaviours. In others, it is weaponised in commercial conversations without a shared understanding of what it actually measures.

Measured poorly, DIFOT obscures problems rather than exposing them. Measured well, it becomes one of the most powerful tools for improving service reliability, prioritising improvement efforts, and holding internal teams and external partners accountable.

This article explores what DIFOT really means, why organisations often struggle to measure it effectively, and how to design DIFOT metrics that genuinely support better supply chain performance.

What DIFOT is – and what it is not

At its core, DIFOT measures whether a customer receives what they ordered, when they expected it.

Simple in theory. Complex in practice.

DIFOT is not just a logistics metric. It reflects the combined performance of demand planning, inventory management, procurement, warehousing, transport, customer service and supplier management. When DIFOT fails, the root cause is rarely confined to one function.

Just as importantly, DIFOT is not a single universal definition. What “on time” and “in full” mean varies significantly by industry, customer type and operating model. Treating DIFOT as a generic, one-size-fits-all KPI is one of the most common sources of confusion.

Why DIFOT matters so much

For customers, DIFOT is often the clearest indicator of service reliability. Consistently delivering in full and on time builds trust, reduces downstream disruption and strengthens commercial relationships.

For organisations, DIFOT has a direct link to:

• Revenue protection and growth
• Customer retention and satisfaction
• Inventory efficiency and working capital
• Transport and expediting costs
• Internal productivity and rework
• Reputation and brand perception

Despite this, many organisations focus on improving DIFOT scores without addressing the underlying drivers, leading to short-term fixes and long-term frustration.

Common problems with how DIFOT is measured

Vague or inconsistent definitions

One of the most frequent issues is a lack of clarity around what constitutes “on time” and “in full”.

Questions that often go unanswered include:

• Is “on time” measured against the customer request date, confirmed date, or promised date?
• Is there a tolerance window, and if so, how wide is it?
• Is “in full” measured by line, order, carton, pallet, unit or value?
• How are partial deliveries treated?

Without clear definitions, DIFOT becomes subjective and open to interpretation.

Measuring DIFOT at the wrong level

Another common issue is measuring DIFOT only at an aggregated level, such as monthly or network-wide performance.

High-level DIFOT figures can mask significant variability:

• Certain customers consistently underperform
• Specific SKUs drive a disproportionate number of failures
• Particular sites or routes create recurring issues

Effective DIFOT measurement requires visibility at the right level of detail to enable action.

Blending root causes into a single number

A single DIFOT percentage tells you very little about why performance is good or bad.

Late delivery due to transport issues, short supply due to inventory constraints, and order errors due to master data problems all show up as the same outcome. Without separating these drivers, improvement efforts lack focus.

Using DIFOT as a lagging indicator only

DIFOT is inherently backward-looking. It tells you what has already happened.

Organisations that rely solely on historical DIFOT reporting often struggle to anticipate problems before they impact customers. Leading indicators are essential to complement DIFOT if service is to be managed proactively.

Defining DIFOT properly for your organisation

There is no single “correct” DIFOT definition. The right definition is the one that aligns with customer expectations and internal decision-making.

Key principles to consider include:

Customer-centric definitions

DIFOT should reflect what matters to the customer, not what is most convenient to measure internally. This may require different definitions for different customer segments or channels.

For example, what constitutes “on time” for a retail distribution centre may be very different from what is acceptable for a direct-to-consumer delivery or a hospital supply chain.

Clear, documented rules

DIFOT definitions should be explicit, documented and consistently applied. This includes:

• Time tolerances
• Treatment of partial shipments
• Handling of customer-driven changes
• Cut-off times and lead time assumptions

Ambiguity erodes trust in the metric and undermines accountability.

Alignment across functions

Sales, customer service, supply chain and finance should all be working from the same DIFOT definition. Misalignment leads to unproductive debate and finger-pointing rather than improvement.

Measuring DIFOT at the right level of detail

Effective DIFOT measurement balances simplicity with insight.

Order, line and unit-level views

Different views answer different questions:

• Order-level DIFOT highlights customer experience
• Line-level DIFOT exposes SKU and availability issues
• Unit or quantity-based DIFOT shows the scale of impact

Relying on only one view can distort priorities.

Customer and channel segmentation

Not all DIFOT failures are equal. Losing service with a strategic customer or critical channel has very different implications to missing a low-volume order.

Segmented DIFOT reporting helps organisations focus effort where it matters most.

Site, route and supplier visibility

Breaking DIFOT down by site, route, carrier or supplier enables targeted operational improvement rather than blanket initiatives.

Understanding why DIFOT fails – root cause analysis

Measuring DIFOT without understanding why it fails limits its usefulness.

High-performing organisations classify DIFOT failures into meaningful root cause categories, such as:

• Forecast error or demand volatility
• Inventory availability or policy issues
• Supplier performance
• Warehouse picking or packing errors
• Transport delays or capacity constraints
• Order capture or master data errors

Over time, this builds a fact base that guides improvement investment.

Complementing DIFOT with leading indicators

To manage service proactively, DIFOT should be complemented by leading indicators that signal risk before delivery occurs.

Examples include:

• Inventory coverage versus target
• Backorder levels and ageing
• Supplier OTIF performance
• Warehouse backlog or throughput constraints
• Transport capacity utilisation

These metrics allow teams to intervene earlier and protect DIFOT outcomes.

DIFOT and behaviour – getting the incentives right

One of the biggest risks with DIFOT is how it influences behaviour.

Poorly designed DIFOT metrics can drive unintended consequences, such as:

• Overbuilding inventory to protect service
• Expensive expediting or freight upgrades
• Prioritising easy wins over systemic improvement
• Disputes over attribution rather than problem-solving

To avoid this, DIFOT should be part of a balanced performance framework rather than a standalone target.

Internal accountability versus external accountability

Holding internal teams accountable

Internally, DIFOT should encourage cross-functional collaboration. Failures should prompt investigation and learning, not blame.

Clear ownership of root causes – not just outcomes – helps teams focus on what they can control.

Holding suppliers and partners accountable

Externally, DIFOT and OTIF metrics are often embedded in supplier and carrier performance management.

To be effective, these metrics must be:

• Fair and transparent
• Based on agreed definitions
• Supported by reliable data

Without this foundation, DIFOT becomes a source of dispute rather than improvement.

The role of systems and data quality

Accurate DIFOT measurement relies on high-quality data across order management, inventory, warehousing and transport systems.

Common challenges include:

• Inconsistent timestamps
• Manual overrides
• Poor master data
• Lack of integration between systems

Before refining DIFOT definitions, organisations often need to address underlying data and process issues.

Using DIFOT as a decision-making tool

When measured effectively, DIFOT becomes a powerful input into strategic and operational decisions, including:

• Inventory policy and safety stock settings
• Network and capacity planning
• Supplier selection and development
• Transport strategy and carrier mix
• Customer service models and segmentation

This is where DIFOT moves from being a report to being a management tool.

How Trace Consultants can help

Trace Consultants works with Australian and New Zealand organisations to design, implement and embed effective DIFOT measurement frameworks that drive real improvement rather than superficial reporting.

Our support typically includes:

DIFOT definition and framework design

Helping organisations define DIFOT in a way that aligns with customer expectations, operating models and decision-making needs.

Data and reporting review

Assessing data flows, system limitations and reporting structures to ensure DIFOT metrics are accurate, reliable and actionable.

Root cause and performance analysis

Supporting structured analysis of DIFOT drivers to prioritise improvement initiatives based on evidence rather than intuition.

KPI and governance design

Embedding DIFOT into broader performance frameworks with clear ownership, escalation and review processes.

Independent, practical advice

Trace is not aligned to technology vendors or logistics providers. Our advice is independent, solution-agnostic and focused on outcomes.

When should organisations revisit how they measure DIFOT?

Common triggers include:

• DIFOT scores that look “good” but customer complaints persist
• Ongoing disputes about what DIFOT actually means
• Repeated service failures with the same customers or products
• Limited insight into why performance fluctuates
• Increased complexity from growth, new channels or new partners

These are often signs that DIFOT is being measured, but not managed.

Final thoughts

DIFOT is one of the most powerful service metrics in the supply chain – but only when it is defined, measured and used properly.

Effective DIFOT measurement requires clarity, discipline and a willingness to look beyond the headline number. It demands an understanding of customer expectations, operational realities and behavioural impacts.

For Australian and New Zealand organisations navigating cost pressure, service expectations and increasing complexity, getting DIFOT right is not about chasing a percentage point. It is about building a supply chain that is reliable, transparent and accountable.

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Across Australia and New Zealand, organisations are under sustained pressure to do more with less. Labour costs continue to rise, skilled resources are harder to attract and retain, and service expectations from customers, patients, citizens and stakeholders have never been higher.

Despite this, workforce planning, rostering and scheduling are still treated in many organisations as operational or administrative activities rather than strategic levers. Rosters are built based on historical patterns, spreadsheets or static templates. Labour decisions are made reactively to short-term issues. Performance is measured through blunt metrics such as total labour cost or overtime spend, without a clear line of sight to productivity or outcomes.

The result is a familiar set of problems: inconsistent service, frustrated frontline staff, over-reliance on agency or contractors, and limited accountability for how labour is actually deployed.

This article explores how organisations can take a more disciplined approach to workforce planning, rostering and scheduling – and how the right KPIs can be used to lift labour productivity while holding both internal teams and external suppliers more accountable.

Why workforce planning, rostering and scheduling matter more than ever

Labour is typically one of the largest cost lines on the profit and loss statement, particularly in service-intensive sectors such as health, aged care, disability, retail, hospitality, logistics, facilities management and government services.

Unlike many other cost categories, labour is also highly visible. It directly affects customer experience, safety, compliance and employee engagement. Poor workforce decisions show up quickly on the frontline.

Several structural trends are making effective workforce management even more critical:

• Persistent labour shortages across key roles
• Rising wage and on-cost pressure
• Greater variability in demand by time, location and channel
• Increased use of external suppliers, contractors and agencies
• Higher expectations of service consistency and responsiveness

In this environment, organisations that rely on intuition, historical averages or static rosters are increasingly exposed. Those that invest in better planning, smarter scheduling and clearer performance accountability create a tangible competitive advantage.

Understanding the workforce planning continuum

Workforce planning, rostering and scheduling are related but distinct activities. Confusing them – or focusing on one in isolation – limits their effectiveness.

Workforce planning: setting the foundation

Workforce planning is about understanding what labour is required, where, when, and with what skills, to deliver the organisation’s service or operational objectives.

Effective workforce planning considers:

• Demand drivers and volume forecasts
• Service level expectations
• Workforce mix (full-time, part-time, casual, contingent, outsourced)
• Skills, qualifications and accreditation requirements
• Productivity assumptions and constraints
• Geographic and site-specific factors

Done well, workforce planning provides a clear view of labour requirements over different horizons – short, medium and long term.

Rostering: translating demand into shifts

Rostering converts workforce plans into actual shifts and coverage patterns. It determines who works, when they work, and under what conditions.

Good rostering balances:

• Demand variability by day and time
• Industrial agreements and award conditions
• Fatigue, fairness and staff preferences
• Skill coverage and supervision requirements
• Cost efficiency and compliance

Poor rostering is one of the most common drivers of overtime, agency reliance and staff dissatisfaction.

Scheduling: managing execution in real time

Scheduling is about managing change. Absences, demand spikes, late deliveries and unplanned events all require adjustments to the roster.

Strong scheduling capability allows organisations to respond quickly without defaulting to expensive or inefficient solutions. It also provides valuable feedback into workforce planning assumptions.

The productivity problem: why labour underperforms

Many organisations struggle to improve labour productivity not because staff are unproductive, but because the system around them is poorly designed.

Common issues include:

• Mismatch between demand and labour deployment
• Overstaffing in low-demand periods and understaffing in peaks
• Limited visibility of how labour is actually used
• Weak accountability for outcomes rather than inputs
• Over-reliance on external suppliers without clear performance measures

In these environments, even well-intentioned managers struggle to make good decisions.

Why KPIs are often the missing link

Most organisations have KPIs related to labour. The problem is that many of them do not drive the right behaviour.

Common examples include:

• Total labour cost
• Overtime hours
• Agency spend
• Headcount

While these metrics are useful, they are lagging indicators. They tell you what has already happened, not whether labour is being deployed effectively.

The real opportunity lies in designing KPIs that connect labour input to service output and outcomes.

Designing the right KPIs for workforce productivity

Effective workforce KPIs share several characteristics:

• They are clearly linked to demand and service outcomes
• They are controllable by the teams being measured
• They balance cost, productivity and quality
• They are simple enough to be understood and acted upon

Below are key KPI categories that organisations should consider.

Demand-aligned productivity KPIs

These KPIs measure how well labour supply aligns to demand.

Examples include:

• Labour hours per unit of demand (orders, clients, patients, tasks)
• Coverage ratio versus forecast demand
• Productive hours as a percentage of paid hours

These metrics shift the conversation from “how many people do we have?” to “are we deploying the right capacity at the right time?”

Roster efficiency and stability KPIs

These KPIs highlight how effective rosters are before execution.

Examples include:

• Planned versus actual labour variance
• Roster adherence rates
• Last-minute roster changes
• Overtime as a percentage of planned hours

High levels of roster churn are often a symptom of poor planning rather than poor performance.

Service and outcome-based KPIs

Labour productivity must be measured alongside service outcomes.

Depending on the sector, this may include:

• On-time service delivery
• Response times
• Throughput or turnaround times
• Safety or quality indicators

This ensures that productivity improvements do not come at the expense of service or compliance.

Workforce mix and flexibility KPIs

These KPIs help organisations understand whether they are using the right mix of labour.

Examples include:

• Permanent versus contingent labour mix
• Agency utilisation by role or site
• Internal backfill versus external sourcing
• Skill coverage ratios

Over-reliance on external suppliers often reflects underlying planning or rostering issues.

External supplier accountability KPIs

For organisations using contractors, labour hire or outsourced services, KPIs are essential to drive accountability.

Examples include:

• Cost per unit of output
• Fill rates and response times
• Compliance with roster requirements
• Productivity versus internal benchmarks

Without clear metrics, external labour costs can escalate with limited scrutiny.

Holding internal teams accountable – without damaging culture

One of the risks in introducing stronger workforce KPIs is that they are perceived as punitive or purely cost-driven.

To avoid this, organisations should:

• Be transparent about why KPIs are being introduced
• Focus on system improvement rather than individual blame
• Give managers the tools and authority to act on insights
• Pair accountability with support and capability building

When done well, KPIs empower managers to make better decisions rather than constrain them.

The role of technology – and its limitations

Technology can play a powerful role in workforce planning, rostering and scheduling, but it is not a silver bullet.

Systems can:

• Automate complex rostering rules
• Provide real-time visibility of coverage and demand
• Capture accurate labour and activity data
• Enable reporting and performance tracking

However, without clear processes, governance and KPIs, technology often reinforces existing problems rather than solving them.

Organisations should be clear on what decisions they want to improve before investing in systems.

From insight to action: making KPIs stick

Introducing KPIs is only the first step. Real value comes from embedding them into daily and weekly management routines.

This includes:

• Regular review of workforce performance dashboards
• Clear escalation paths for variances
• Linking KPIs to planning and budgeting cycles
• Using insights to refine demand forecasts and rosters

Over time, this creates a virtuous cycle of continuous improvement.

How Trace Consultants can help

Trace Consultants works with Australian and New Zealand organisations to design and implement practical, fit-for-purpose workforce planning, rostering and scheduling frameworks.

Our support typically includes:

Workforce planning and demand modelling

Helping organisations understand true labour requirements by role, location and time period, based on demand drivers and service expectations.

Rostering and scheduling optimisation

Reviewing roster structures, rules and practices to improve efficiency, flexibility and fairness while reducing unnecessary cost.

KPI design and performance frameworks

Defining the right KPIs to drive productivity and accountability across internal teams and external suppliers – and embedding them into management processes.

Operating model and governance design

Clarifying roles, decision rights and escalation pathways so workforce decisions are made at the right level with the right information.

Independent and practical advice

Trace is not aligned to workforce software vendors or labour providers. Our advice is solution-agnostic and focused on what will genuinely work in your operating environment.

When should organisations act?

Common signals that workforce planning and rostering need attention include:

• Rising labour or agency costs with no clear explanation
• Persistent overtime or fatigue issues
• Inconsistent service performance
• Frustrated frontline managers and staff
• Limited visibility of workforce productivity

If these challenges sound familiar, it may be time to take a more structured approach.

Final thoughts

Workforce planning, rostering and scheduling are no longer back-office activities. They are strategic capabilities that directly influence cost, service, safety and staff engagement.

Organisations that invest in better planning and clearer accountability – supported by the right KPIs – are better positioned to navigate labour constraints, improve productivity and deliver consistent outcomes.

For Australian and New Zealand organisations facing ongoing workforce pressure, the opportunity is not just to reduce cost, but to build a more resilient, transparent and accountable workforce model for the future.

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Across Australia and New Zealand, Procure to Pay (P2P) systems are increasingly seen as a cornerstone of modern finance and procurement operating models. When implemented well, they provide visibility over spend, enforce governance, streamline workflows, and reduce the administrative burden on teams. When implemented poorly, they can become expensive systems that frustrate users, slow down purchasing, and sit alongside spreadsheets and workarounds.

The challenge is not a lack of technology. The P2P market is crowded with solutions promising automation, compliance, analytics and control. The challenge lies in making the right decisions at the right time – starting with a clear business case, followed by disciplined system selection, and culminating in a well-governed implementation that genuinely changes how the organisation operates.

This article provides a practical, end-to-end perspective on Procure to Pay systems: what they are, why organisations invest in them, where programs typically fail, and how to approach business case development, selection and implementation in a way that delivers lasting value.

What is Procure to Pay – and why does it matter?

Procure to Pay refers to the end-to-end process that governs how organisations request, approve, purchase, receive, and pay for goods and services. In its simplest form, it spans:

• Requisitioning and approvals
• Purchase order creation and management
• Goods and service receipt
• Invoice processing and matching
• Payment and financial posting
• Reporting and compliance

In many organisations, these steps are fragmented across emails, spreadsheets, shared inboxes, finance systems and manual controls. This fragmentation creates risk, inefficiency and a lack of transparency over spend.

A well-designed P2P system provides a single workflow and system of record that connects procurement policy, supplier catalogues, approvals, invoicing and payment into one controlled process.

For CFOs, it improves visibility and financial control.
For procurement leaders, it supports compliance and category management.
For operational teams, it simplifies how they request and receive what they need.

The value is not just transactional efficiency – it is better decision-making across the organisation.

Why organisations invest in Procure to Pay systems

While each organisation has its own drivers, common motivations for investing in P2P systems include:

• Lack of visibility over spend, particularly indirect and services spend
• Poor compliance with procurement policies and preferred suppliers
• Manual invoice processing driving cost, delays and errors
• Limited ability to enforce approvals and delegations
• Supplier dissatisfaction due to late or inconsistent payment
• Audit findings related to controls and segregation of duties
• Pressure to reduce operating costs without cutting service

Increasingly, P2P systems are also seen as an enabler for broader transformation – supporting strategic procurement, better contract management, and more robust ESG and compliance reporting.

The reality: why many P2P programs underdeliver

Despite the clear value proposition, many Procure to Pay implementations fail to deliver their promised benefits. In some cases, organisations end up with a system that technically works, but is poorly adopted, heavily customised, or bypassed entirely.

Common causes include:

Weak or generic business cases

Business cases that focus purely on licence costs and high-level efficiency assumptions often fail to build genuine executive alignment or set realistic expectations.

Treating P2P as a technology project

When P2P is led solely as an IT implementation, process design, operating model alignment and change management are often underdone.

Selecting systems before defining requirements

Jumping to vendor demonstrations without clarity on what the organisation actually needs leads to mismatched solutions.

Over-customisation

Excessive tailoring to replicate legacy processes undermines standardisation, increases cost and complicates future upgrades.

Underestimating change management

P2P changes how people buy, approve and engage with suppliers. Without structured change and engagement, resistance is inevitable.

Understanding these pitfalls is critical before embarking on the journey.

Step 1: Building a robust Procure to Pay business case

A strong business case is the foundation of a successful P2P program. It does more than justify investment – it aligns stakeholders on what success looks like and why change is necessary.

Clarifying the problem to be solved

Effective business cases start with a clear articulation of current pain points, supported by evidence rather than anecdotes. This might include:

• Process mapping to identify inefficiencies and duplication
• Analysis of invoice volumes, touchpoints and exception rates
• Spend visibility assessments, particularly for indirect categories
• Compliance gaps against procurement policies and delegations
• Audit findings or risk exposures

The goal is to create a shared understanding of the current state and the cost of doing nothing.

Defining benefits beyond cost savings

While efficiency savings are important, P2P business cases should also capture qualitative and strategic benefits, such as:

• Improved governance and control
• Faster cycle times for requisition to payment
• Better supplier relationships
• Stronger data for procurement and finance decision-making
• Reduced reliance on key individuals and workarounds

These benefits are often more durable than short-term headcount reductions and resonate strongly with executive stakeholders.

Establishing realistic assumptions

One of the most common weaknesses in P2P business cases is overly optimistic assumptions about automation rates, compliance uplift or behavioural change.

A credible business case is conservative, transparent and grounded in the organisation’s maturity, culture and operating environment. It clearly articulates what needs to change operationally for benefits to be realised.

Step 2: Defining requirements before going to market

Once the business case is endorsed, organisations should invest time in clearly defining their requirements before engaging vendors.

Understanding the operating model

P2P systems must align to how procurement and finance actually operate. Key questions include:

• What level of centralisation or decentralisation is required?
• How will approvals work across different spend types?
• What categories require catalogues versus free-text purchasing?
• How will services procurement be managed?
• What role will procurement play versus finance?

Without clarity on the operating model, system selection becomes guesswork.

Distinguishing “must haves” from “nice to haves”

Not every feature matters equally. Clear prioritisation helps avoid over-engineering and keeps selection focused on what will genuinely drive value.

This discipline also prevents vendors from steering conversations towards features that sound impressive but are rarely used.

Considering integration and data architecture

P2P systems do not operate in isolation. Integration with finance, ERP, contract management and supplier master data is critical.

Requirements should explicitly consider:

• Data ownership and governance
• Master data management
• Reporting and analytics needs
• Future scalability

Ignoring these considerations early can create long-term constraints.

Step 3: Procure to Pay system selection

With requirements defined, organisations can move into a structured selection process.

Creating a level playing field

A disciplined approach ensures that all shortlisted vendors are assessed against the same criteria, scenarios and assumptions. This avoids decisions being driven by presentation quality rather than substance.

Looking beyond demonstrations

Vendor demonstrations often show idealised scenarios. Selection teams should test how systems handle real-world complexity, exceptions and edge cases relevant to their organisation.

Understanding total cost of ownership

Licence costs are only one component of cost. Implementation effort, configuration, support, internal resourcing and ongoing change all contribute to the true investment required.

Assessing vendor fit, not just product fit

Long-term success depends on more than functionality. Vendor stability, local support capability, implementation ecosystem and product roadmap all matter – particularly for Australian and New Zealand organisations operating in smaller markets.

Step 4: Implementation – where value is won or lost

Implementation is where many P2P programs struggle. Success depends less on technical execution and more on how well the organisation manages change.

Process first, system second

Implementation should reinforce standardised, future-state processes rather than replicating legacy ways of working. This often requires difficult conversations about policy, authority and accountability.

Governance and decision-making

Clear governance is essential to manage scope, resolve trade-offs and avoid uncontrolled customisation. Decisions delayed during implementation inevitably surface later as cost or usability issues.

Change management and user adoption

Procure to Pay systems affect a broad user base, many of whom do not see procurement or finance as their core role. Effective change management focuses on:

• Clear communication of “what’s in it for me”
• Simple, intuitive user journeys
• Role-based training
• Early engagement of influential users

Adoption is not automatic – it must be designed and managed.

Measuring success post-go-live

Organisations should define success metrics early and track them after go-live. These might include:

• Adoption and compliance rates
• Invoice cycle times
• Exception handling volumes
• User satisfaction
• Realisation of business case benefits

Without measurement, it is impossible to know whether the system is delivering value.

Procure to Pay as an enabler, not an end in itself

A P2P system is not the destination. It is an enabler for stronger procurement, better financial control and more informed decision-making.

Organisations that see P2P as a foundational capability – rather than a one-off system implementation – are better positioned to leverage it for:

• Strategic sourcing and category management
• Contract compliance and leakage reduction
• Supplier performance management
• ESG and regulatory reporting

This requires ongoing ownership, continuous improvement and alignment with broader business strategy.

How Trace Consultants can help

Trace Consultants supports Australian and New Zealand organisations across the full Procure to Pay journey – from initial business case through to selection and implementation support.

Our approach is grounded in a few key principles.

Independent and solution-agnostic advice

Trace is not aligned to any P2P software vendor or implementation partner. This ensures that recommendations are based solely on what is right for your organisation, not on selling licences or services.

Business-led, not system-led

We focus on clarifying the operating model, processes and governance first – ensuring that technology supports the business rather than dictating it.

Practical experience across procurement and finance

Our team brings hands-on experience across procurement, finance and supply chain, allowing us to bridge the gap between strategy and execution.

Structured selection and implementation support

From requirements definition and vendor evaluation through to implementation governance and benefits tracking, Trace provides end-to-end support to reduce risk and maximise value.

When should organisations revisit their Procure to Pay capability?

Common triggers include:

• Poor visibility over indirect or services spend
• Increasing invoice volumes and processing costs
• Audit or compliance issues
• Supplier dissatisfaction
• Growth, restructuring or system upgrades
• A desire to mature procurement capability

If these challenges sound familiar, it may be time to step back and reassess whether your current P2P capability is fit for purpose.

Final thoughts

Procure to Pay systems can deliver significant value – but only when approached as a business transformation, not a technology purchase.

The organisations that succeed are those that invest the time to build a clear business case, define what they actually need, select the right solution for their context, and manage implementation with discipline and care.

For Australian and New Zealand organisations navigating cost pressure, compliance requirements and increasing complexity, getting Procure to Pay right is not just about efficiency – it is about control, confidence and capability for the future.

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For many Australian and New Zealand organisations, the distribution centre and warehousing network has evolved over time rather than being deliberately designed. New sites are added as the business grows. Temporary solutions become permanent. Leases roll over. Service issues are patched rather than solved. Before long, the network becomes complex, expensive, and increasingly misaligned with customer expectations.

Network optimisation is the discipline of stepping back and asking some deceptively simple questions:

• How many distribution centres or warehouses do we actually need?
• How big should each facility be – today and in the future?
• Where should they be located to balance cost, service, risk and growth?

When done properly, network optimisation can unlock step-change improvements in operating cost, service performance, working capital, resilience and sustainability. When done poorly – or with the wrong incentives – it can lock organisations into expensive, inflexible decisions that are very difficult to unwind.

This article explores how organisations should think about DC and warehousing network optimisation, the common traps to avoid, and why independent, solution-agnostic advice is critical to getting it right.

Why network optimisation matters more than ever

Supply chains across Australia and New Zealand are operating in a fundamentally different environment than they were even five years ago.

Customer expectations around speed, reliability and visibility continue to rise. E-commerce and omnichannel fulfilment have shifted order profiles and delivery patterns. Labour availability and cost pressures are persistent. Transport markets are volatile. And boards and executives are paying closer attention to resilience, risk exposure and sustainability.

At the same time, DCs and warehouses represent some of the largest and least flexible cost commitments in the supply chain:

• Long-term property leases or owned assets
• Fixed labour and overhead structures
• Embedded technology and automation decisions
• Transport and inventory dependencies that cascade across the network

Once a network decision is made, it often shapes the business for a decade or more. That makes getting the fundamentals right – how many, how big and where – critically important.

The three core questions of network optimisation

1. How many DCs or warehouses do we need?

There is no “right” number of DCs. The optimal answer depends on the trade-off an organisation is willing to make between cost, service and risk.

At one end of the spectrum, a highly centralised network can deliver scale efficiencies, simpler inventory management and lower fixed costs. At the other end, a highly decentralised network can reduce transport lead times, improve service responsiveness and enhance resilience.

Key factors that influence the optimal number of facilities include:

• Customer service expectations – delivery speed, cut-off times, order frequency
• Product characteristics – size, weight, value, shelf life, handling complexity
• Demand patterns – geographic dispersion, variability, seasonality
• Transport economics – linehaul versus last-mile cost trade-offs
• Inventory strategy – safety stock policies and service level targets
• Risk tolerance – exposure to single-site disruptions

A common mistake is assuming that “more DCs equals better service” or that “fewer DCs equals lower cost”. In reality, both extremes can be sub-optimal if not supported by data and a clear operating model.

Network optimisation provides a structured way to test different scenarios and understand the real cost-to-serve and service implications of each option.

2. How big should each facility be?

Warehouse size decisions are often driven by what is available in the property market or what feels “safe” for growth. This can result in facilities that are either constrained from day one or materially oversized for years.

Sizing a DC correctly requires a deep understanding of:

• Current and future volume profiles (units, pallets, cartons, orders)
• Peak versus average demand and how peaks are managed
• Storage and handling requirements by product category
• Operating model assumptions – shifts, labour productivity, automation levels
• Inventory policies – days of cover, decoupling stock, buffer strategies
• Growth scenarios – organic growth, range expansion, channel shifts

Oversized facilities lock in unnecessary capital and operating costs. Undersized facilities drive congestion, inefficiency, safety risks and costly short-term workarounds.

Effective network optimisation links facility sizing directly to demand forecasts, inventory strategies and operational assumptions – not just high-level growth percentages.

3. Where should facilities be located?

Location decisions are among the most sensitive and visible outcomes of a network optimisation exercise.

In Australia and New Zealand, geography plays a particularly important role. Long distances, population concentration in major cities, regional service requirements, and limited labour pools all shape the optimal answer.

Key considerations include:

• Proximity to customers and service time commitments
• Access to transport infrastructure – road, port, intermodal
• Labour availability and cost
• Property market dynamics – availability, lease structures, escalation risk
• Exposure to risk – natural hazards, congestion, single-point failures
• Alignment with upstream suppliers or downstream partners

Location optimisation is not about picking a suburb on a map. It is about understanding how location interacts with transport cost, service performance, workforce sustainability and long-term flexibility.

Beyond cost: what good network optimisation really delivers

While cost reduction is often the initial trigger for a network review, the most successful programs deliver value across multiple dimensions.

Improved service performance

Well-designed networks reduce lead times, improve DIFOT performance and create more predictable service outcomes. This is increasingly important as customers expect tighter delivery windows and greater transparency.

Lower working capital

Network structure has a direct impact on inventory duplication and safety stock requirements. Optimisation can materially reduce working capital without compromising service when inventory is positioned deliberately rather than organically.

Greater resilience

Events over recent years have highlighted the fragility of overly centralised or poorly designed networks. Network optimisation allows organisations to test disruption scenarios and design in resilience where it matters most.

Better labour sustainability

Facility location and size decisions influence access to labour, turnover, productivity and safety outcomes. A network that looks efficient on paper but cannot be staffed reliably will struggle in practice.

Clearer investment decisions

Network optimisation provides a fact base for decisions on property, automation, systems and outsourcing. It ensures that downstream investments are aligned to a future-ready network design rather than locking in today’s constraints.

Common traps in DC and warehousing network decisions

Despite the strategic importance of network optimisation, many organisations fall into avoidable traps.

Letting property availability drive the answer

Choosing locations or sizes based primarily on what is available in the market often leads to compromised outcomes. Property constraints should be tested against the optimal network – not the other way around.

Optimising in isolation

Network decisions are sometimes made without fully considering inventory strategy, transport design, labour models or systems capability. This leads to local optimisation that underperforms end-to-end.

Over-reliance on rules of thumb

Heuristics such as “one DC per state” or “X square metres per pallet” can be useful starting points, but they are not substitutes for data-driven modelling.

Designing for today only

Networks designed around current volumes and channels can quickly become obsolete. Scenario testing and future-state thinking are essential.

Taking advice with embedded incentives

Perhaps the most significant trap is relying on advice from parties whose commercial interests are linked to a particular outcome – whether that is property development, automation deployment or technology selection.

Why independent, solution-agnostic advice matters

Network optimisation decisions shape millions – and often billions – of dollars of future cost and investment. The stakes are too high for advice that is not truly independent.

Independent, solution-agnostic advice means:

• No incentive to recommend more buildings than necessary
• No incentive to oversize facilities to sell automation or technology
• No incentive to bias location decisions towards specific property assets

Instead, decisions are driven by what is genuinely optimal for the organisation’s strategy, service promise and risk profile.

For executives and boards, this independence is critical. It provides confidence that recommendations are grounded in evidence, not sales targets or asset pipelines.

The role of data and modelling in network optimisation

Modern network optimisation goes well beyond simple spreadsheets. Effective analysis typically combines:

• Demand and volume forecasting by region and channel
• Cost-to-serve analysis across transport, warehousing and inventory
• Scenario modelling across different network configurations
• Sensitivity testing for growth, service and disruption scenarios

Importantly, the outputs of modelling should not be treated as a black box. The value lies in understanding the trade-offs and assumptions behind each scenario, not just the “optimal” answer.

Good network optimisation balances analytical rigour with practical operational insight.

Network optimisation is not a one-off exercise

One of the biggest misconceptions is that network optimisation is something you do once every ten years.

In reality, leading organisations treat it as a repeatable strategic capability, revisited as conditions change:

• Growth or contraction
• Channel shifts
• Changes in service strategy
• Cost pressure or margin erosion
• Mergers, acquisitions or divestments

Regularly revisiting network assumptions allows organisations to make proactive decisions rather than reacting under pressure.

How Trace Consultants can help

Trace Consultants supports Australian and New Zealand organisations to design DC and warehousing networks that are fit for purpose today and resilient for the future.

Our approach to network optimisation is grounded in a few core principles.

Independent and solution-agnostic

Trace is not linked to property developers, automation vendors or technology providers. This allows us to provide genuinely independent advice, focused solely on what is best for your organisation.

End-to-end perspective

We design networks in the context of the broader supply chain – integrating demand planning, inventory strategy, transport design, workforce considerations and systems capability.

Practical and implementable

Our recommendations are grounded in operational reality. We focus on designs that can actually be staffed, operated and scaled in the Australian and New Zealand context.

Scenario-led decision making

Rather than presenting a single “answer”, we help executives understand the trade-offs between different network options and make informed decisions aligned to strategy and risk appetite.

Support beyond the model

Trace supports clients from initial network strategy through to business case development, stakeholder engagement and implementation planning – ensuring that network decisions translate into real outcomes.

When should organisations consider network optimisation?

While every organisation’s context is different, common triggers include:

• Rising warehousing or transport costs
• Declining service performance
• Capacity constraints or congestion
• Major lease expiries or property decisions
• Growth into new regions or channels
• Mergers or organisational restructuring
• Increased focus on resilience and risk

If these signals are present, it is often a sign that the network has drifted away from what the business actually needs.

Final thoughts: getting the fundamentals right

“How many, how big and where” may sound simple, but these questions sit at the heart of supply chain performance.

Network optimisation is not about chasing theoretical efficiency. It is about deliberately designing a DC and warehousing network that supports your strategy, your customers and your people – now and into the future.

For Australian and New Zealand organisations facing ongoing cost pressure, service expectations and uncertainty, there are few levers with more impact than getting the network right.

Independent, solution-agnostic network optimisation provides the clarity needed to make confident, long-term decisions – and avoid locking in tomorrow’s problems.

Reducing COGS % and Improving Margin Through Range & Inventory Optimisation

Waste and SLOBs Reduction

Cost of Goods Sold (COGS) is often treated as something largely fixed—set by suppliers, market conditions and scale. Yet for many organisations across Australia and New Zealand, COGS % creeps up over time not because unit costs increase dramatically, but because inefficiencies accumulate quietly across the range and inventory portfolio.

New products are added. Old ones linger. Forecasts become less accurate. Inventory ages. Waste increases. Slow-moving and obsolete stock (SLOBs) grows. Markdowns become routine. Expediting costs rise. Eventually, margin erosion is accepted as inevitable.

In reality, a significant proportion of COGS pressure is self-inflicted.

Organisations that systematically optimise their product range and inventory policies can materially reduce COGS %, improve gross margin and release working capital—often without renegotiating a single supplier contract.

This article explores how range and inventory optimisation directly impacts COGS, why waste and SLOBs are persistent challenges, and how organisations can tackle them in a practical, sustainable way. It also outlines how Trace Consultants helps organisations drive measurable margin improvement through structured, data-led approaches.

Why COGS % Creeps Up Over Time

COGS rarely deteriorates overnight. It erodes gradually through a combination of small decisions that, individually, seem reasonable.

Range Expansion Without Discipline

New products are often introduced to:

• Respond to customer requests
• Match competitors
• Support promotions or growth initiatives

However, older products are rarely removed with the same rigour. Over time, ranges expand well beyond what demand can support efficiently.

The result:

• Lower volume per SKU
• Reduced forecast accuracy
• Smaller production or purchase runs
• Higher unit costs and logistics inefficiencies

Inventory Policies That Don’t Reflect Reality

Inventory parameters are often set once and rarely revisited. Safety stock, minimum order quantities and reorder points may no longer reflect:

• Actual demand variability
• True lead times
• Service priorities

This misalignment drives both excess stock and stock-outs—each of which increases COGS in different ways.

Poor Visibility of Waste and SLOBs

Waste and SLOBs are frequently treated as:

• “One-off write-offs”
• “The cost of doing business”

Without clear ownership and ongoing monitoring, these losses repeat year after year.

Forecast Bias and Optimism

Forecasts often reflect what the business hopes to sell, rather than what demand signals support. This optimism flows directly into excess inventory, markdowns and obsolescence.

How Range Complexity Drives COGS Up

Range complexity is one of the most powerful—and underestimated—drivers of COGS %.

The Hidden Cost of Too Much Choice

Each additional SKU introduces:

• Forecasting effort
• Inventory holding cost
• Planning variability
• Procurement and logistics overhead
• Risk of obsolescence

Even if a SKU is profitable on paper, it may still dilute overall margin by consuming capacity and attention.

Long-Tail SKUs and Margin Dilution

In many organisations, a small proportion of SKUs drive the majority of volume and margin. The long tail often:

• Sells infrequently
• Requires higher safety stock relative to demand
• Contributes disproportionately to waste and SLOBs

Without active range management, these SKUs quietly erode performance.

Range Decisions Are Often Decoupled from Supply Chain Reality

Product decisions are sometimes made without full consideration of:

• Minimum order quantities
• Shelf life or expiry risk
• Storage and handling complexity
• Transport and packaging inefficiencies

When these costs are not visible at decision time, they show up later in COGS.

Inventory Optimisation as a Margin Lever

Inventory is not just a balance sheet item. It is a direct driver of COGS through waste, write-downs, handling cost and inefficiency.

Excess Inventory Increases More Than Holding Cost

Holding cost is only part of the story. Excess inventory also increases:

• Damage risk
• Expiry and obsolescence
• Picking inefficiency
• Space constraints and overflow handling
• Discounting and markdown activity

All of these inflate COGS or reduce realised margin.

Stock-Outs Also Increase COGS

While counterintuitive, stock-outs can increase COGS by:

• Driving expediting and premium freight
• Forcing suboptimal substitution
• Increasing small-batch purchases
• Reducing production efficiency

Optimisation is about balance, not just reduction.

Waste: The Most Visible Symptom of Poor Alignment

Waste is one of the clearest indicators that demand, supply and inventory decisions are misaligned.

Common Drivers of Waste

Across industries, waste often stems from:

• Over-forecasting
• Poor promotion planning
• Inflexible minimum order quantities
• Long lead times combined with volatile demand
• Range changes not reflected in inventory run-down plans

Waste is rarely caused by one bad decision. It is the cumulative effect of many small misalignments.

Why Waste Is So Hard to Eliminate

Waste persists because:

• Accountability is diffuse
• It is often discovered too late
• Root causes are not systematically addressed

Without structural changes, waste reductions achieved one year often reappear the next.

SLOBs: The Silent Margin Killer

Slow-moving and obsolete stock is one of the most stubborn problems in supply chains.

What Creates SLOBs

SLOBs typically arise from:

• Range rationalisation delays
• Product lifecycle mismanagement
• Forecast bias
• Supplier constraints
• Lack of clear exit strategies for underperforming items

Once inventory becomes slow-moving, options narrow quickly.

The True Cost of SLOBs

Beyond write-offs, SLOBs:

• Occupy valuable warehouse space
• Complicate picking and replenishment
• Mask true demand signals
• Consume management attention

Left unchecked, they distort planning decisions and perpetuate poor outcomes.

Connecting Range, Inventory and COGS %

COGS improvement requires seeing the system as a whole.

Range decisions affect:

• Demand predictability
• Purchase economics
• Inventory requirements

Inventory policies affect:

• Waste and obsolescence
• Service levels
• Expediting and handling cost

Together, they determine:

• Gross margin
• Cash tied up in stock
• Operational efficiency

Treating these levers separately limits results. The biggest gains come from addressing them together.

Practical Approaches to Range Optimisation

Effective range optimisation is not about cutting aggressively. It is about making deliberate, evidence-based choices.

Segmenting the Range

Segmenting SKUs by:

• Volume contribution
• Margin contribution
• Demand variability
• Strategic importance

allows organisations to apply differentiated strategies rather than blanket rules.

Identifying Candidates for Rationalisation

Common indicators include:

• Persistent low volume
• High forecast error
• Disproportionate waste or markdowns
• Duplication or close substitutes

Importantly, decisions should consider total cost-to-serve, not just sales.

Managing Range Change Properly

Rationalisation without inventory exit planning simply creates SLOBs faster.

Effective programs include:

• Clear sell-down strategies
• Adjusted replenishment rules
• Supplier engagement
• Defined end-of-life processes

Inventory Optimisation Levers That Reduce COGS

Recalibrating Safety Stock

Safety stock should reflect:

• Actual demand variability
• True lead time performance
• Service priorities by SKU or segment

Many organisations carry excess safety stock because parameters were never revisited.

Improving Forecast Quality Where It Matters

Not all SKUs require the same forecast effort.

Focusing improvement on:

• High-value items
• High-risk items
• Items with high waste exposure

delivers far greater returns than chasing marginal gains everywhere.

Aligning Inventory Targets to Service Strategy

Different products justify different service levels.

Explicitly linking service targets to inventory investment:

• Improves margin transparency
• Prevents over-investment in low-impact areas

Governance: Where Most Initiatives Succeed or Fail

Many range and inventory initiatives start strongly and then fade.

Clear Ownership Is Critical

Successful programs clearly define:

• Who owns range decisions
• Who owns inventory targets
• Who is accountable for waste and SLOBs

Shared ownership often results in no ownership.

Embedding Ongoing Review Cadence

Range and inventory optimisation is not a one-off project.

Effective organisations embed:

• Regular range reviews
• Ongoing SLOB monitoring
• Periodic inventory parameter recalibration

This prevents issues from re-accumulating.

The Role of Data and Technology (Without Over-Engineering)

Advanced tools can help, but they are not a prerequisite for success.

What Matters Most

The biggest gains usually come from:

• Better use of existing data
• Clear metrics and definitions
• Consistent decision-making

Technology should support decisions, not complicate them.

Avoiding the “Tool First” Trap

Investing in sophisticated optimisation software without fixing:

• Data quality
• Governance
• Decision rights

often leads to underwhelming results.

How Trace Consultants Can Help

Trace Consultants works with organisations across Australia and New Zealand to reduce COGS %, improve margin and release cash through practical range and inventory optimisation.

Our approach focuses on sustainable improvement, not short-term fixes.

Diagnosing the True Drivers of Margin Leakage

We help organisations understand:

• Where COGS is really being lost
• How range complexity, waste and SLOBs interact
• Which levers will deliver the greatest impact

This creates a clear, prioritised improvement roadmap.

Range Optimisation and Rationalisation

Trace Consultants supports:

• SKU segmentation and performance analysis
• Identification of rationalisation opportunities
• Development of structured exit and transition plans
• Governance frameworks to prevent re-expansion

All decisions are grounded in data and operational reality.

Inventory Policy and Parameter Optimisation

We help recalibrate:

• Safety stock and reorder policies
• Service level targets by segment
• Inventory deployment across networks

The focus is on reducing excess without increasing risk.

Waste and SLOB Reduction Programs

Trace Consultants helps design and implement:

• Waste tracking and root cause analysis
• SLOB identification and disposition strategies
• Preventative controls to stop recurrence

This turns waste reduction into an ongoing discipline.

Embedding Capability and Governance

Sustainable results require capability uplift. We support:

• Role clarity and decision rights
• KPI design and performance management
• Review cadences and operating rhythms

This ensures improvements hold beyond the initial program.

Final Thoughts

Reducing COGS % and improving margin is rarely about one big initiative. It is about addressing the cumulative impact of range complexity, excess inventory, waste and SLOBs.

For organisations across Australia and New Zealand, the opportunity is significant:

• Margin improvement without supplier renegotiation
• Cash release without service degradation
• Simpler, more resilient operations

The key is treating range and inventory optimisation as core commercial disciplines—not just supply chain housekeeping.

When organisations align product decisions, inventory policies and governance around a shared understanding of value and risk, COGS % comes down, margin improves and performance becomes far more predictable.

If COGS pressure feels persistent despite strong sales or procurement efforts, the answer may lie not in buying cheaper—but in carrying, managing and ranging smarter.

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Demand Planning and Inventory Optimisation Using AI

Demand planning and inventory optimisation have always sat at the heart of supply chain performance. Get them right, and organisations unlock lower working capital, higher service levels and calmer operations. Get them wrong, and the consequences show up everywhere: stock-outs, excess inventory, expediting costs, frustrated customers and stressed teams.

Across Australia and New Zealand, many organisations feel like demand planning has become harder, not easier. Forecasts are less stable. Product ranges are broader. Promotions are more frequent. Supply is less predictable. And decision-makers are expected to respond faster, with fewer buffers and less tolerance for error.

This is where interest in artificial intelligence (AI) has surged.

AI is often positioned as a silver bullet for forecasting and inventory management. In reality, its value is far more nuanced—and far more powerful—when applied thoughtfully. AI does not replace demand planners or inventory managers. Instead, it augments their judgement, improves signal detection, and enables faster, more consistent decision-making at scale.

This article explores how AI is being used in demand planning and inventory optimisation, where it genuinely adds value, where organisations need to be careful, and how Trace Consultants helps organisations apply AI in practical, outcome-focused ways.

Why Demand Planning and Inventory Optimisation Are Under Pressure

Before looking at AI, it’s important to understand why traditional approaches are struggling.

Demand Has Become Less Predictable

Many planning processes were built around relatively stable demand patterns. Today, demand is influenced by:

• Rapid product innovation and SKU proliferation
• Promotional intensity and price volatility
• Channel shifts (B2B, B2C, online, omnichannel)
• Customer-specific ordering behaviour
• External disruptions and uncertainty

Simple time-series forecasting methods struggle to keep up with this level of complexity.

Inventory Buffers Are No Longer Acceptable

Holding excess inventory used to be the default response to uncertainty. Today, rising capital costs, storage constraints and executive focus on cash have reduced tolerance for “just in case” stock.

Organisations are expected to:

• Reduce inventory
• Improve availability
• Maintain resilience

Doing all three at once requires better planning tools and smarter trade-offs.

Manual Planning Doesn’t Scale

Spreadsheets, judgement-based overrides and manual exception handling can work in small, stable environments. They do not scale well when:

• SKU counts grow
• Lead times vary
• Supply constraints change frequently

Planners end up spending more time firefighting than improving outcomes.

What AI Really Means in Demand Planning and Inventory Optimisation

AI is a broad term that means different things to different people. In demand planning and inventory optimisation, it typically refers to the use of advanced algorithms to identify patterns, relationships and signals in large, complex datasets.

This often includes:

• Machine learning models that adapt as new data becomes available
• Pattern recognition across multiple demand drivers
• Probabilistic forecasting rather than single-point forecasts
• Scenario analysis and simulation
• Automated segmentation and parameter tuning

AI does not “guess the future.” It improves the quality of insights used to make decisions about the future.

How AI Improves Demand Planning

Moving Beyond Single-Number Forecasts

Traditional forecasting often produces a single number for each item and period. AI-based approaches are more likely to produce a range of outcomes, reflecting uncertainty.

This allows planners to:

• Understand forecast confidence
• Identify high-risk items
• Make differentiated decisions

For example, two items with the same average forecast may require very different inventory strategies if one has high volatility and the other is stable.

Better Use of Multiple Demand Signals

AI models can incorporate far more inputs than traditional methods, such as:

• Historical sales patterns
• Promotions and pricing changes
• Seasonality at different levels
• Customer behaviour
• External drivers (where relevant and available)

This helps surface patterns that are difficult to identify manually.

Improved Forecast Accuracy for Long-Tail Items

Low-volume or intermittent demand items are notoriously difficult to forecast. AI-based approaches are often better at identifying underlying patterns and reducing noise for these items, improving planning confidence.

Faster Adaptation to Change

Machine learning models can recalibrate more frequently as new data becomes available. This helps planners respond faster when demand patterns shift, rather than waiting for periodic forecast reviews.

How AI Improves Inventory Optimisation

Demand planning is only half the story. Inventory optimisation is where AI often delivers the most tangible financial impact.

Smarter Safety Stock Setting

Traditional safety stock formulas rely on simplified assumptions about demand variability and lead time. AI enables more nuanced approaches that:

• Reflect actual demand distributions
• Account for variable lead times
• Adjust dynamically as conditions change

This often leads to:

• Lower overall inventory
• Better service at critical items
• Reduced overstock in low-value areas

Differentiated Inventory Strategies

AI enables automated segmentation of inventory based on:

• Demand patterns
• Value
• Criticality
• Service requirements

This allows organisations to apply different inventory policies where they matter most, rather than treating all items the same.

Scenario Modelling and Trade-Off Analysis

AI-powered tools can simulate scenarios such as:

• Changes in service targets
• Supplier lead time variability
• Volume growth or decline
• Network changes

This helps decision-makers understand trade-offs before committing to changes.

Exception-Based Management

Rather than planners reviewing thousands of SKUs manually, AI helps identify:

• Items at risk of stock-out
• Items at risk of excess
• Items behaving abnormally

This shifts planning from reactive to proactive.

What AI Does Not Do Well (and Why That Matters)

AI is powerful, but it is not magic. Understanding its limitations is critical.

AI Does Not Replace Business Context

Algorithms do not understand:

• Strategic priorities
• Customer relationships
• Regulatory constraints
• Commercial commitments

Human judgement remains essential, particularly for exceptions and strategic decisions.

AI Is Only as Good as the Data

Poor data quality leads to poor outputs. Common challenges include:

• Inconsistent item master data
• Poor promotion tracking
• Incomplete lead time data
• Misaligned hierarchies

AI amplifies both good and bad data.

AI Cannot Fix Broken Processes

If planning processes are unclear, roles are poorly defined, or governance is weak, AI will not solve these problems. In fact, it may make them more visible.

Common Pitfalls in AI-Enabled Planning Initiatives

Many AI initiatives underperform because of predictable mistakes.

Starting with Technology Instead of the Problem

Organisations sometimes invest in AI tools without being clear on:

• What decisions need to improve
• Which outcomes matter most
• How success will be measured

This leads to impressive dashboards with limited real-world impact.

Over-Automation Without Trust

Planners need to trust AI outputs. If models are opaque or poorly explained, users override them or ignore them altogether.

Transparency and explainability matter.

Ignoring Change Management

AI changes how people work. Without structured change management, organisations see:

• Resistance
• Shadow spreadsheets
• Reversion to old habits

Successful programs invest as much in people as in algorithms.

Where AI Delivers the Most Value in Practice

Across industries in Australia and New Zealand, AI tends to deliver the most value when applied to:

• High SKU-count environments
• Networks with variable lead times
• Organisations under pressure to reduce working capital
• Businesses with complex promotional or seasonal demand
• Operations where planners are overloaded with manual tasks

The biggest gains often come not from perfect forecasts, but from better inventory decisions made faster and more consistently.

Integrating AI into Sales & Operations Planning (S&OP)

AI-enabled demand planning and inventory optimisation are most powerful when integrated into S&OP or Integrated Business Planning (IBP) processes.

This allows organisations to:

• Align demand and supply assumptions
• Quantify trade-offs between service, cost and cash
• Run scenarios collaboratively
• Make decisions with a shared fact base

AI strengthens S&OP by improving the quality and timeliness of inputs, not by replacing the process.

Technology Choices: One Size Does Not Fit All

There is no single “best” AI solution. Options range from:

• Advanced features within existing planning platforms
• Specialist inventory optimisation tools
• Low-code or spreadsheet-based solutions enhanced with AI
• Custom-built models for specific use cases

The right choice depends on:

• Business complexity
• Data maturity
• Internal capability
• Speed-to-value requirements

Overly complex solutions can delay benefits and increase dependency. Simpler, well-targeted tools often deliver faster results.

The Role of Low-Code and Practical AI

Not all AI needs to sit in large enterprise platforms. Increasingly, organisations are using:

• Low-code tools
• Smart spreadsheets
• Embedded algorithms

to automate specific planning decisions and workflows.

These approaches can:

• Deliver rapid benefits
• Improve planner productivity
• Complement core planning systems

They are particularly useful where flexibility and speed matter.

How Trace Consultants Can Help

Trace Consultants helps organisations across Australia and New Zealand improve demand planning and inventory optimisation using AI in a practical, outcome-focused way.

We do not start with tools. We start with decisions.

Clarifying the Planning Problem

We work with clients to define:

• Which planning decisions matter most
• Where value is being lost today
• What “good” looks like in terms of service, cost and cash

This ensures AI is applied where it makes a real difference.

Designing Fit-for-Purpose Planning Models

Trace Consultants helps design planning approaches that:

• Match business complexity
• Balance automation and human judgement
• Integrate with existing processes and systems

This includes demand forecasting, safety stock design and replenishment logic.

Supporting Technology Selection and Deployment

We support clients to:

• Assess AI-enabled planning tools objectively
• Avoid over-engineering
• Implement solutions that deliver value quickly

Our approach is vendor-agnostic and grounded in practical experience.

Embedding Change and Capability

We help organisations:

• Redesign planning roles and responsibilities
• Build trust in AI outputs
• Establish governance and review cadences
• Train teams to use insights effectively

This ensures benefits are sustained, not short-lived.

Linking Planning to Financial Outcomes

Critically, we help connect demand and inventory decisions to:

• Working capital
• Service performance
• Cost-to-serve

This allows executives to see the impact of planning decisions clearly.

Final Thoughts

AI is changing demand planning and inventory optimisation—but not in the way headlines often suggest.

The real value of AI lies in:

• Better visibility of uncertainty
• Smarter inventory trade-offs
• Faster, more consistent decisions
• Reduced manual effort

For organisations across Australia and New Zealand, the opportunity is significant. But success depends less on algorithms and more on how AI is integrated into everyday decision-making.

When applied thoughtfully, AI does not replace planners. It gives them better tools, clearer insights and more time to focus on what matters.

If your organisation is struggling with volatile demand, rising inventory pressure or planning processes that no longer scale, the question is not whether to explore AI—but how to do so in a way that genuinely improves outcomes.

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Transport Networks and Finding the Right Transport Providers

Benchmarking & KPI Management for Success

Transport is one of those supply chain functions that only gets attention when something goes wrong.

A delivery misses a cut-off and a customer escalates. A distribution centre runs out of dock space because linehaul arrives late. Freight invoices spike without explanation. One carrier performs brilliantly in metro areas but struggles in regional lanes. Suddenly, transport is no longer a background function—it is the business.

Across Australia and New Zealand, freight networks are becoming harder to manage. Costs are rising, service expectations are tightening, and disruption is more frequent. Many organisations are also dealing with more complex delivery profiles: e-commerce fulfilment, store replenishment, direct-to-site deliveries, bulky items, time-window commitments, reverse logistics and heightened compliance requirements.

In this environment, the difference between average and excellent transport performance often comes down to three things:

1. A transport network designed to suit your demand and service promise
2. Transport providers selected objectively, based on capability and fit (not familiarity)
3. Benchmarking and KPI management embedded into day-to-day operations and governance

This article walks through how to build a transport network that performs, how to select the right providers, and how to manage success using benchmarking and KPIs—without turning the function into a spreadsheet contest. It also outlines how Trace Consultants can help organisations in Australia and New Zealand improve transport outcomes with practical, independent support.

Why Transport Networks Matter More Than Ever

Transport is not just a cost line. It is a service engine, a risk exposure and, increasingly, a brand experience.

When transport networks are designed and managed well, organisations can achieve:

• Lower freight cost per unit without sacrificing service
• Higher DIFOT (Delivered In Full, On Time) and fewer customer escalations
• Better capacity certainty through seasonal peaks
• Reduced damage and claims
• Improved dock and warehouse flow (less congestion and rescheduling)
• More reliable inventory positioning and replenishment cycles
• Better data and visibility for decision-making

When networks are not designed or managed well, the opposite happens: operational workarounds grow, costs become opaque, service performance erodes, and the organisation becomes dependent on a few “hero operators” who keep things moving through sheer effort.

Transport networks deserve structured attention because they shape performance outcomes for years. Yet many organisations treat transport as something to “shop” every few years on rates alone, rather than designing a model that can sustain service and cost performance long term.

What Is a Transport Network, Really?

A transport network isn’t just which carrier moves freight from A to B. It is the complete set of decisions and structures that determine how freight flows through the business.

A transport network includes:

• The lanes and flows (DC to store, DC to customer, supplier to DC, inter-DC, returns)
• Service tiers (standard, express, timed, same-day, regional, remote)
• Mode choices (linehaul, courier, parcel, rigid/tautliner, containerised, dedicated fleet)
• Consolidation and deconsolidation points (cross-docks, hubs, metro depots)
• Cut-offs and lead times (how transport interacts with warehouse operations)
• Provider mix (single carrier, multi-carrier, primary/secondary, specialist providers)
• Governance and accountability (who owns decisions, escalation, improvement)
• Commercial structure (contracts, rate cards, minimums, fuel, accessorials)
• Performance management (KPIs, reporting cadence, claims process, root cause)

When these elements are aligned to the business strategy, transport becomes predictable. When they are not aligned, transport becomes a daily negotiation.

The Most Common Triggers for Reviewing a Transport Network

Organisations don’t usually set out to redesign their network for fun. It happens when pressure builds. Typical triggers include:

1. Cost Growth Outpaces Sales or Volume

Freight costs rise due to:

• accessorial charges creeping in
• poor consolidation
• inefficient lane allocations
• under-utilised vehicles
• non-compliant bookings
• fuel or surcharge complexity

Cost blowouts are often symptoms of network design and governance issues, not just carrier rates.

2. Service Performance Has Become Unreliable

Service declines show up as:

• late deliveries
• missed timed windows
• increased damaged freight
• rising customer complaints
• higher re-delivery costs

This often indicates capability mismatch between service requirements and provider model.

3. Growth, Channel Shift or SKU Complexity

New product ranges, new customer segments, and growth in direct-to-consumer fulfilment often break legacy networks.

4. Carrier Dependency Risk

Relying heavily on one provider can become a strategic risk, particularly during peak periods or industrial disruptions.

5. M&A, Footprint Changes or Network Moves

Warehouse moves, new facilities, or acquisitions often require lane redesign and provider reallocation.

When these triggers appear, the right approach isn’t to “retender everything immediately.” It’s to start by understanding the network and defining what “good” looks like, before going to market.

Finding the Right Transport Providers: Start With Fit, Not Familiarity

Provider selection in transport can be surprisingly subjective. Many organisations default to the carriers they know, or those that have “always been there.” But transport markets have evolved. Capability, technology, footprint, fleet profile and service models differ widely.

Selecting the right transport providers starts with a clear definition of:

• Your customer promise (what you must deliver, and when)
• Your freight profile (pallets, parcels, bulky, hazardous, temperature-controlled)
• Your lane structure (metro vs regional vs remote, density, frequency, variability)
• Your operational realities (dock constraints, cut-offs, packaging, loading)
• Your risk appetite (single source vs multi-carrier, contingency requirements)

Only once these are clear does “who is the best provider” become an objective question.

The Provider Selection Process That Actually Works

A strong provider selection process is structured, comparable and evidence-based. In practice, it usually includes these steps:

Step 1: Segment Your Freight and Lanes

Not all freight is equal. A good selection process segments:

• parcel vs pallet
• metro vs regional vs remote
• fast-moving vs low-frequency
• high-value vs low-value
• fragile vs robust
• timed vs standard

This segmentation enables targeted selection rather than forcing a single provider to do everything.

Step 2: Define Service Standards in Plain Language

Service definitions must be unambiguous, including:

• lead times by lane
• time window compliance requirements
• POD requirements
• claims and damage thresholds
• escalation processes
• booking cut-offs
• exception notification expectations

If you can’t describe service clearly, you can’t select providers fairly—or manage them effectively later.

Step 3: Run a Capability Assessment (Not Just a Rate Comparison)

Rates matter. But capability mismatch costs more than a higher linehaul rate.

Capability assessment should cover:

• network footprint and depot coverage
• linehaul schedules and frequency
• fleet profile and equipment availability
• subcontracting models and governance
• peak capacity approach
• safety and compliance maturity
• claims performance and handling processes
• technology and visibility capability
• customer service model and escalation response

Step 4: Align Commercial Structure to Behaviour

Commercial terms should encourage the behaviours you want:

• incentives for service and compliance
• clear treatment of accessorials
• transparent fuel mechanisms
• controls for rate variation over time
• clarity on minimums and volume commitments

Many transport relationships deteriorate not because a provider “gets worse,” but because the contract structure creates constant friction.

Step 5: Validate Through Lane Modelling

Where possible, compare providers on:

• total cost-to-serve across representative lanes
• service feasibility against your cut-offs
• operational constraints (dock hours, trailer swap models, equipment)

This moves the evaluation beyond rate cards.

Transport Benchmarking: What It Is (and What It Isn’t)

Benchmarking is one of the most powerful tools for improving transport performance—when done properly.

Benchmarking is not:

• asking a carrier if your rates are “competitive”
• comparing your rate card line-by-line with another organisation without context
• using generic industry averages that don’t reflect your lane mix

Good benchmarking is:

• a structured comparison of cost and performance relative to similar networks
• adjusted for volume density, distance, freight profile and service requirements
• used to identify improvement opportunities, not just negotiate harder

What to Benchmark in a Transport Network

Cost benchmarking can include:

• cost per pallet / carton / consignment
• cost per kilometre by lane
• cost-to-serve by customer segment or region
• accessorial and surcharge incidence
• claims cost and redelivery cost

Service benchmarking can include:

• DIFOT by lane and service tier
• on-time pickup performance
• damage rates
• exception rates (missed scans, lost freight)
• POD compliance times
• customer complaint incidence
• rework and rescheduling frequency

Operational benchmarking can include:

• dock-to-dispatch cycle time impacts
• trailer utilisation and cube utilisation
• consolidation rates
• booking compliance and despatch discipline

Benchmarking should lead to a short list of actionable initiatives, not a “report that sits on a shelf.”

KPI Management: Where Transport Relationships Win or Lose

Once providers are selected, performance management is where value is either realised or lost.

Many organisations have KPIs, but not KPI management. They produce reports, but don’t drive improvement. Or they manage performance through blame, which degrades relationships and encourages defensive behaviour.

High-performing transport organisations treat KPI management as a structured operating rhythm.

The Anatomy of Strong KPI Management

1. Choose KPIs That Influence Behaviour

Too many KPIs dilute focus. A strong set typically includes:

Service KPIs

• DIFOT (or on-time delivery) by lane and tier
• on-time pickup
• scan compliance / milestone visibility
• proof of delivery time compliance

Quality KPIs

• damage rate
• claims turnaround time
• loss incidence

Cost KPIs

• cost per unit (with clear unit definitions)
• accessorials as a percentage of spend
• invoice accuracy and dispute rate

Responsiveness KPIs

• exception notification timeliness
• time-to-resolution for escalations
• customer service response times

2. Define KPIs Precisely

A KPI that can be interpreted two ways will be argued two ways.

Define:

• time measurement basis (dispatch time vs booked time vs pickup time)
• what counts as “on time” (grace period, business hours, customer availability)
• what constitutes a “delivery attempt”
• how damages are attributed
• how exceptions are classified

Precision reduces friction and increases accountability.

3. Build a Cadence of Reviews

A strong cadence often includes:

• weekly operational reviews for exceptions and immediate fixes
• monthly performance reviews for trend analysis and root cause
• quarterly business reviews for strategic improvement and contract alignment

Without cadence, KPIs are just numbers.

4. Separate Root Cause from Blame

Performance problems are rarely caused by one party alone.

A missed delivery window could be:

• late linehaul
• poor booking data
• warehouse dispatch delays
• customer site constraints
• packaging failures

KPI management should drive joint root cause investigation and improvement actions.

5. Tie Performance to Commercial Outcomes (Carefully)

Incentives and penalties can work, but they must be:

• measurable
• fair
• controllable by the provider
• balanced

Overly punitive models drive gaming and degrade collaboration.

Building a Provider Portfolio: Single Carrier vs Multi-Carrier

There is no universally correct model. The right approach depends on network complexity, volume density, service requirements and risk appetite.

Single Carrier Models

Pros

• simplicity
• fewer interfaces
• consolidated negotiation

Risks

• dependency
• limited competitive pressure
• reduced flexibility in peak periods

Multi-Carrier Models

Pros

• resilience
• best-fit capability by segment
• competitive tension

Risks

• complexity
• governance burden
• risk of inconsistent customer experience

A common high-performing approach is:

• one or two primary carriers per segment or region
• secondary carriers for contingency and peak cover
• specialist providers for niche requirements (remote, bulky, temperature-controlled, timed)

This model balances simplicity and resilience.

The Hidden Value: Linking Transport KPIs to Warehouse and Customer Outcomes

Transport doesn’t exist in isolation. Some of the biggest gains come from aligning transport with warehousing and customer service.

Examples include:

• improving despatch discipline to reduce missed pickups
• adjusting cut-off times to improve linehaul performance
• slotting and loading practices that reduce damage
• packaging standards that reduce claims
• load building that improves utilisation and reduces cost per unit

When transport KPIs are linked to upstream warehouse metrics and downstream customer experience metrics, improvement becomes far more powerful—and far less political.

How Trace Consultants Can Help

Trace Consultants supports organisations across Australia and New Zealand to design transport networks, select transport providers objectively, and implement benchmarking and KPI management that drives sustainable outcomes.

We help clients move from reactive transport management to structured performance and cost control—without adding unnecessary bureaucracy.

Independent, Vendor- and Carrier-Agnostic Support

We are not a carrier, broker or software vendor. That independence allows us to:

• assess options objectively
• challenge assumptions
• focus on what fits your operation and service promise

Transport Network Review and Strategy

We can help define:

• the right transport network structure for your lanes and demand profile
• segmentation strategies for freight and service tiers
• risk and resilience approaches (capacity, contingency)
• service promise alignment and feasibility testing

Provider Selection and Go-To-Market Support

Trace Consultants can support:

• market scanning and capability assessment
• tender design and evaluation frameworks
• commercial structure design (including accessorial controls and governance)
• contract and KPI schedule development
• transition planning and implementation governance

The goal is not just to pick “the cheapest carrier,” but to build a provider portfolio that performs.

Benchmarking and Cost-to-Serve Analysis

We help clients benchmark:

• rates and cost drivers in context
• accessorial incidence
• lane density and utilisation opportunities
• cost-to-serve by segment and region

This provides a fact base for negotiation and improvement—without relying on generic industry averages.

KPI Management Operating Rhythms

We support clients to implement practical performance management including:

• KPI definition and measurement design
• reporting and dashboarding requirements
• weekly/monthly/quarterly review cadences
• root cause and continuous improvement frameworks
• escalation pathways and governance structures

This is where savings and service improvements become “sticky.”

Building Internal Capability

Sustainable transport improvement requires internal capability. Trace Consultants can help uplift:

• transport governance maturity
• team capability and role clarity
• operating procedures and decision rights
• performance management routines

This reduces reliance on individuals and creates a repeatable approach.

Final Thoughts

Transport networks and provider relationships succeed when they are designed and managed deliberately.

Benchmarking gives organisations a fact base. KPI management turns that fact base into action. Provider selection determines whether capability matches your service promise. And network design sets the foundation that everything else sits on.

For organisations across Australia and New Zealand, the opportunity is significant:

• transport is often a major spend line
• performance is highly visible to customers
• small improvements compound quickly over time

The best outcomes come when organisations stop treating transport as a periodic procurement event and start treating it as an operating system: designed, governed, measured and improved continuously.

If your transport costs feel opaque, your service performance feels inconsistent, or your provider relationships feel reactive, it may be time to step back and redesign the way transport is managed—starting with the network, the provider portfolio and the KPIs that drive success.

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Selecting the Right Solution to Improve Freight Visibility and Capture Freight Metrics

Transport is one of the largest and most complex cost lines in most supply chains. It is also one of the least visible.

For many organisations across Australia and New Zealand, transport spend is spread across dozens of carriers, contracts, rate cards, spreadsheets, email inboxes, and legacy systems. Freight activity is often fragmented, reactive and heavily dependent on individual experience rather than structured data.

In that environment, it is no surprise that many organisations seek a “system” to solve the problem.

Done well, the right solution can significantly improve:

• Freight cost control
• Service reliability
• Visibility and reporting
• Carrier performance management
• Scalability as volumes grow

Done poorly, it becomes another underutilised platform—expensive to implement, hard to maintain, and delivering only a fraction of its potential value.

This article explores:

• What freight visibility and metrics solutions actually do
• When a Transport Management System (TMS) is the right fit
• When a TMS is too complex—and what to do instead
• Common pitfalls in freight visibility programs
• What good implementation looks like
• How visibility and metrics fit within broader supply chain and operating model decisions
• How Trace Consultants can help organisations select and implement the right solution successfully

What Are Freight Visibility and Metrics Solutions?

At their core, freight visibility and metrics solutions help organisations capture, structure and use freight data to support better decision-making.

Depending on configuration and maturity, solutions in this space can support:

• Freight data capture across carriers, sites and channels
• Shipment tracking and milestone visibility
• Freight cost reporting and allocation
• Carrier performance measurement
• Exception management and proactive alerts
• Freight invoicing analytics and accrual accuracy
• Continuous improvement through lane, mode and service insights

Importantly, this capability is not merely “a dashboard”. It is an enabler of better freight management.

Without clear processes, governance and data discipline, even the best visibility tool will struggle to deliver value.

Why Freight Visibility and Metrics Are Getting More Attention in Australia and New Zealand

Several factors are driving increased focus on freight visibility and performance data across the region.

1. Transport Costs Continue to Rise

Fuel volatility, labour constraints, regulatory requirements and network congestion have all contributed to upward pressure on freight costs.

Organisations are under growing pressure to:

• Understand true landed cost
• Identify cost drivers
• Recover control over fragmented transport spend

Better visibility and metrics provide the data foundation required to do this effectively.

2. Complexity Is Increasing

Many organisations now operate:

• Multiple warehouses
• Multiple delivery channels
• A mix of linehaul, metro, regional and last-mile freight
• Outsourced and in-house transport

Manual tools struggle to handle this level of complexity—especially when data resides in many places.

3. Service Expectations Are Higher

Customers expect:

• Shorter lead times
• Reliable delivery windows
• Proactive communication

Transport performance is increasingly visible to customers—and failures are felt immediately. Internal visibility needs to align with external expectations.

4. Organisations Are Scaling

As volumes increase, informal freight management approaches break down.

The right solution enables organisations to scale insight and control without proportionally increasing headcount or risk.

When a TMS Is the Right Fit

A Transport Management System can be a powerful solution—but only in the right context.

A TMS is designed to plan, execute, monitor and optimise freight movements. That means it is most valuable when you need to actively manage freight operations—not just measure them.

Strong Indicators That a TMS Is Needed

Freight Execution Needs Structure and Control

If an organisation needs to consistently:

• Allocate carriers
• Apply freight business rules
• Manage bookings and dispatch
• Optimise loads and routes

…a TMS is often the right foundation.

Carrier Management Is Highly Manual

Common signs include:

• Bookings managed via email or phone
• Rate cards stored in spreadsheets
• Limited ability to compare carrier options

A TMS introduces structure and consistency.

Decision-Making Needs Governance

When different sites or teams make freight decisions independently, outcomes vary widely. A TMS enables governance while preserving operational flexibility.

You Need Both Visibility and Action

If visibility is useful only when paired with the ability to intervene—re-plan, re-book, reroute, escalate—then a TMS becomes a practical tool, not just a reporting layer.

When a TMS Is Too Complex (and What to Do Instead)

Just as important is knowing when not to start with a TMS.

In many organisations, the immediate need is visibility and metrics—not freight execution optimisation. In these cases, a full TMS can introduce unnecessary complexity and cost.

Scenarios Where a TMS May Be the Wrong First Step

The Goal Is Visibility, Not Execution

If the primary objective is to:

• Capture freight spend and volumes
• Track service performance
• Improve reporting consistency
• Create trusted metrics across carriers

…then a lighter solution may be more effective than implementing a full TMS.

Operations Are Low-Complexity

For low-volume, stable networks (or where carriers handle most execution steps), a TMS may incur overhead without a proportional return.

Underlying Processes Are Broken

If:

• Transport rules are unclear
• Rate structures are inconsistent
• Carrier performance expectations are undefined

…then automating those problems will not fix them.

Data Quality Is Not Ready

Visibility platforms and TMS solutions alike rely on:

• Accurate order data
• Clean master data
• Disciplined execution

Without this foundation, confidence in the system erodes quickly.

What to Use Instead of a TMS (When the Need Is Metrics and Visibility)

Depending on maturity, organisations often achieve faster outcomes through:

• Freight analytics and spend visibility platforms
• Track-and-trace visibility solutions
• Control tower reporting layers
• BI and data integration solutions built around clean freight data models
• Invoice audit and freight payment tools with reporting capability

What Freight Visibility Solutions Can (and Can’t) Do

Understanding boundaries is critical.

What Visibility and Metrics Solutions Can Do Well

• Consolidate freight data from multiple sources
• Create consistent reporting and KPI definitions
• Provide milestone tracking and exception visibility
• Measure carrier performance against service levels
• Highlight cost drivers and lane trends

What They Cannot Do Alone

• Fix poorly negotiated contracts
• Resolve carrier capacity issues
• Replace strong transport governance
• Compensate for unclear service strategy

Visibility amplifies the quality of the operating model it supports.

Common Pitfalls in Visibility and Metrics Programs

Across many organisations, similar issues appear time and again.

Treating It as a Reporting Exercise

One of the most common mistakes is treating visibility as “just dashboards”.

In reality, visibility programs are decision-support programs. They only succeed when:

• Metrics are trusted
• Decision rights are clear
• Actions follow insight

Over-Engineering the First Step

Trying to implement a full end-to-end solution from day one often leads to:

• Longer timelines
• Higher costs
• Lower adoption

Good programs stage capability: capture clean data first, then build sophistication.

Inconsistent KPI Definitions

If different teams measure different versions of:

• On-time delivery
• DIFOT
• Cost per unit
• Claims and exceptions

…then reporting becomes contested instead of useful.

Poor Carrier Engagement

Carriers are critical to visibility, especially for milestone events and exception data.

If they are not:

• Engaged early
• Supported through onboarding
• Clear on data expectations

…execution and data quality suffer.

What Good Implementation Looks Like

Successful visibility and metrics programs share several characteristics.

Clear Objectives from the Start

Organisations that succeed are clear on:

• Why they are improving visibility
• What problems they are solving
• What success looks like

This clarity shapes design decisions throughout the program.

A Strong Data Foundation

Good programs define:

• What data is required
• Where it will come from
• Who owns it
• How quality will be governed

Phased and Practical Delivery

Rather than trying to deliver everything at once, high-performing programs:

• Prioritise high-value metrics and use cases
• Roll out in stages
• Build trust early

Operational Ownership

The best implementations are owned by the business—not IT. Transport, supply chain and operations leaders actively shape the outcomes and embed the practices.

Visibility and the Broader Supply Chain

Freight visibility does not operate in isolation.

Integration with Warehousing

Warehouse cut-off times, dock schedules and load build processes all influence transport outcomes. Visibility must reflect operational reality—not just system timestamps.

Inventory and Network Strategy

Freight insights affect:

• Inventory placement
• Safety stock requirements
• Network design trade-offs

The value is not the data itself, but how it informs decisions.

Workforce and Capability

Introducing visibility changes:

• Roles and responsibilities
• Skills required
• Decision rights

This needs to be planned, not left to chance.

Measuring Success After Implementation

Organisations should track benefits beyond go-live.

Common measures include:

• Freight cost per unit
• Carrier performance against service levels
• On-time, in-full delivery
• Transport productivity
• Exception rates
• Data completeness and accuracy

Importantly, these metrics must be trusted by the business.

How Trace Consultants Can Help

Trace Consultants supports organisations across Australia and New Zealand to improve freight visibility, capture meaningful metrics, and implement solutions that deliver real, lasting value.

Our role is not to sell software. It is to help organisations make better transport decisions, supported by the right technology.

Independent and Vendor-Agnostic

We are not aligned to any specific platform. This allows us to:

• Objectively assess options
• Avoid over-engineering
• Select solutions that fit the operating model

Focus on the Operating Model First

We start with:

• Transport strategy and service design
• Governance and decision rights
• Carrier and contract structures
• KPI definitions and reporting needs

Only then do we select the technology approach—whether that is a TMS or something lighter.

Practical Implementation Experience

Our approach is grounded in real operational experience across:

• Retail
• Manufacturing
• FMCG
• Healthcare
• Government and complex service environments

We understand how transport actually runs—not just how systems are configured.

End-to-End Support

Trace Consultants can support organisations through:

• Freight visibility feasibility and business case development
• KPI and reporting framework definition
• Requirements definition and data model design
• Vendor evaluation and selection
• Implementation governance
• Change management and adoption
• Post-implementation performance optimisation

Avoiding Common Traps

Perhaps most importantly, we help organisations:

• Avoid over-engineering
• Set realistic expectations
• Sequence change effectively

This significantly increases the likelihood of success.

Final Thoughts

Selecting the right solution to support freight visibility and capture metrics can be transformative—but only when done for the right reasons and in the right way.

A TMS is not the answer to every visibility problem. It is a powerful enabler when:

• Freight execution needs structured control
• Decision-making must be governed at scale
• Visibility must be paired with the ability to act

In other cases, a lighter visibility and analytics solution can deliver faster value with less complexity—particularly when the core need is trusted metrics, consistent reporting and performance insight.

For organisations across Australia and New Zealand grappling with rising freight costs, service pressure and increasing complexity, the goal is the same: visibility, control and scalability.

The key is not rushing to a specific technology category, but taking the time to design how freight information should flow, how decisions should be made, and what success should look like—then selecting the solution that makes that future state real.

If your freight operation feels increasingly opaque or reactive, the question may not be whether to implement a TMS—but what level of solution you truly need to create visibility that genuinely makes a difference.

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Warehouse Design – When and How It Can Make a Difference

Warehouse design is rarely top of mind until something breaks.

Orders start going out late. Labour costs creep up. Forklift congestion becomes the norm. Inventory accuracy declines. Safety incidents increase. Customer complaints rise. Growth plans stall because the site simply cannot cope.

At that point, organisations often jump straight to solutions: more automation, a new warehouse, racking upgrades, or a warehouse management system replacement. Too often, these decisions are made without stepping back to ask a more fundamental question:

Is our warehouse designed to support the way our business actually operates today—and where it needs to go next?

For organisations across Australia and New Zealand, warehouse design is one of the most powerful (and under-leveraged) levers available to improve cost, service and resilience across the supply chain. When done well, it delivers benefits for years. When done poorly, it locks in inefficiencies that are extremely hard and expensive to unwind.

This article explores:

• When warehouse design really matters
• The warning signs that a redesign is needed
• What “good” warehouse design actually looks like in practice
• Common pitfalls organisations fall into
• How warehouse design should align with operating models, workforce and technology
• How Trace Consultants can help organisations get warehouse design right

Why Warehouse Design Matters More Than Ever

Warehouses used to be viewed as simple storage facilities. Today, they are complex operational engines sitting at the centre of customer experience, working capital management and cost control.

Several trends are making warehouse design increasingly critical in Australia and New Zealand:

1. Rising Labour Costs and Workforce Constraints

Labour markets remain tight across logistics, with wage pressure, skills shortages and high turnover rates. Poorly designed warehouses amplify these challenges by:

• Requiring more manual handling
• Increasing travel time and congestion
• Making training more difficult
• Increasing fatigue and injury risk

Good design reduces reliance on brute labour by improving flow, layout and task efficiency.

2. Service Expectations Continue to Rise

Customers expect faster, more reliable fulfilment with fewer errors—regardless of whether the customer is a consumer, a hospital ward, a retail store or a construction site.

Warehouse design has a direct impact on:

• Pick accuracy
• Order cycle times
• Cut-off compliance
• Peak responsiveness

No amount of system configuration can compensate for a fundamentally flawed layout.

3. Growth, Volatility and Uncertainty

Many organisations are experiencing:

• Demand volatility
• SKU proliferation
• Channel complexity (B2B, B2C, omnichannel)
• Seasonal and promotional peaks

Warehouses designed for yesterday’s volumes and profiles struggle to cope without excessive overtime, temporary labour or service degradation.

4. Capital Is Expensive

Warehouses are capital-intensive assets. Poor design decisions can lock organisations into:

• Excessive operating costs
• Inflexible layouts
• Under-utilised space

Conversely, thoughtful design can defer or even eliminate the need for new sites.

When Warehouse Design Can Make the Biggest Difference

Not every warehouse needs a full redesign. However, there are clear moments in a business lifecycle when revisiting warehouse design delivers outsized value.

1. When Performance Has Plateaued

If productivity improvements have stalled despite:

• Process improvements
• Workforce initiatives
• Technology upgrades

…there is a strong chance that the physical design of the warehouse has become the limiting factor.

2. When Volumes or Profiles Have Changed

Warehouses are often designed around a specific:

• Throughput volume
• Order profile
• SKU mix

Over time, these assumptions change. What was once an efficient bulk-handling operation may now be dealing with high-frequency, small-order picking. Without design changes, inefficiencies compound.

3. When Safety Incidents Are Increasing

Congestion, manual handling risks, poor line-of-sight and ad-hoc storage solutions are often symptoms of layout issues rather than behavioural problems.

A redesign focused on flow and segregation can significantly improve safety outcomes.

4. When Automation Is Being Considered

Automation should never be the starting point. It should be the outcome of a well-designed operation.

Warehouse design work is critical before:

• Goods-to-person systems
• Conveyor networks
• Automated storage and retrieval systems
• Robotics

Without the right layout and flows, automation investments underperform or fail altogether.

5. When a New Warehouse Is Being Planned

New builds present a once-in-a-generation opportunity. Mistakes made at this stage are extremely costly to fix later.

Warehouse design must be completed before:

• Land is finalised
• Building footprints are locked in
• Services are positioned

The Difference Between “Storage Design” and “Operational Design”

One of the most common mistakes organisations make is treating warehouse design as a racking and space problem.

Good warehouse design is not about fitting pallets into a box. It is about designing how work flows through the facility.

Storage-Led Design (Common but Risky)

• Focuses on maximising pallet positions
• Prioritises cube utilisation over flow
• Treats people, equipment and technology as afterthoughts

Operational-Led Design (High-Performing)

• Starts with demand, order profiles and service requirements
• Designs end-to-end flows from inbound to outbound
• Aligns layout with operating model and labour strategy
• Uses storage solutions as enablers, not constraints

The difference between these two approaches is often the difference between a warehouse that looks good on paper and one that actually performs on the floor.

What Good Warehouse Design Looks Like in Practice

While every warehouse is different, high-performing designs share common principles.

1. Clear End-to-End Flow

Goods should move logically and predictably from:

• Receiving
• Putaway
• Storage
• Picking
• Packing
• Dispatch

Cross-flows, backtracking and congestion points are minimised.

2. Layout Aligned to Demand Profiles

Fast-moving items are located to minimise travel. Slow-moving or bulky items are positioned to reduce disruption.

Picking strategies (case pick, each pick, pallet pick) are reflected physically in the layout.

3. Appropriate Zoning and Segregation

Well-designed warehouses clearly separate:

• Pedestrians and material handling equipment
• Inbound and outbound traffic
• Value-added services
• Returns and quarantine stock

This improves both safety and productivity.

4. Flexibility for Change

Good designs allow for:

• Volume growth
• SKU expansion
• Changes in order profiles
• New technology

Fixed, highly constrained layouts often become obsolete faster than expected.

5. Workforce-Centric Design

Design decisions should consider:

• Walking distances
• Task variation
• Ergonomics
• Line-of-sight
• Ease of supervision

This has a direct impact on productivity, safety and staff retention.

6. Technology-Ready Infrastructure

Even if automation is not implemented immediately, the design should consider:

• Power and data
• Floor tolerances
• Clear heights
• Expansion zones

This avoids costly rework later.

Common Warehouse Design Pitfalls

Across Australia and New Zealand, Trace Consultants frequently see the same issues repeated.

Designing to a Single “Peak Day”

Designing a warehouse around a theoretical peak often leads to:

• Under-utilised space
• Excess capital spend
• Inefficient everyday operations

Better designs accommodate peaks through flexibility, not oversizing everything.

Locking in Assumptions Too Early

Early assumptions about:

• Volumes
• Automation
• Workforce models

…often change. Designs that cannot adapt become constraints rather than enablers.

Separating Design from Operations

When warehouse design is done in isolation from operations teams, the result often looks good in drawings but fails in reality.

Operational involvement is critical throughout the design process.

Over-Automating Too Soon

Automation can deliver value—but only when:

• Volumes are stable
• Processes are mature
• Data quality is strong

Poorly timed automation often locks in bad processes at scale.

Warehouse Design and the Operating Model

Warehouse design should never be done in isolation. It must be tightly aligned to the operating model.

Key questions include:

• What services are delivered from the warehouse?
• What are the cut-off times and service promises?
• What level of responsiveness is required?
• What is done in-house versus outsourced?

For example:

• A warehouse supporting healthcare operations has very different design requirements to one supporting retail promotions.
• A facility supporting construction or infrastructure projects requires different flows again.

Designing without clarity on the operating model almost always leads to compromise.

The Role of Data in Warehouse Design

Effective warehouse design is grounded in data, not assumptions.

Key inputs typically include:

• Historical order data
• SKU velocity and dimensions
• Inbound profiles
• Labour standards
• Seasonality and peak behaviour

However, data alone is not enough. It must be interpreted in the context of:

• Future strategy
• Growth plans
• Service commitments

Good design balances quantitative analysis with operational judgement.

When Incremental Changes Are Enough (and When They’re Not)

Not every situation requires a full redesign.

In some cases, targeted interventions can deliver meaningful improvements:

• Slotting optimisation
• Pick path reconfiguration
• Racking adjustments
• Workstation redesign

However, incremental fixes often stop delivering value once fundamental layout constraints are reached.

A key role of good advisory support is helping organisations understand when:

• Small changes are sufficient, and
• A more structural redesign is required

How Trace Consultants Can Help

Trace Consultants supports organisations across Australia and New Zealand to design warehouses that actually work—operationally, commercially and strategically.

Our approach is grounded in independence, practicality and deep operational experience.

Independent, Solution-Agnostic Advice

We do not sell automation, racking or systems. This allows us to:

• Assess options objectively
• Challenge vendor-led assumptions
• Focus on what is right for the business

End-to-End Perspective

Warehouse design does not exist in isolation. We consider:

• Network strategy
• Transport interfaces
• Inventory and working capital impacts
• Workforce models
• Technology architecture

This ensures the warehouse supports the broader supply chain.

Operationally Led Design

Our work starts with:

• Understanding how the operation actually runs
• Engaging frontline leaders and teams
• Designing flows that work in practice, not just on paper

Scalable and Future-Ready Designs

We help clients design warehouses that can:

• Grow with the business
• Adapt to changing demand
• Incorporate technology when the time is right

Support Across the Full Lifecycle

Trace Consultants can support organisations through:

• Early feasibility and option analysis
• Concept and detailed design
• Business case development
• Vendor and automation evaluation
• Implementation support and transition planning

Importantly, we help organisations avoid over-designing or over-investing before the fundamentals are right.

Final Thoughts

Warehouse design is one of the most powerful—but misunderstood—levers available to supply chain leaders.

When approached thoughtfully, it can:

• Reduce operating costs
• Improve safety and workforce outcomes
• Lift service performance
• Enable growth without constant firefighting

When approached poorly, it locks in inefficiency and frustration for years.

The difference lies not in how much is spent, but in when design decisions are made and how they are approached.

For organisations across Australia and New Zealand facing growth, volatility or performance challenges, revisiting warehouse design is often not just worthwhile—it is essential.

If your warehouse feels like it is working against you rather than for you, it may be time to step back and ask whether the design still fits the business you are today—and the one you are becoming.

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Supply Chain and Procurement Due Diligence Pre-Acquisition

Why operational insight matters before the deal is done

Mergers and acquisitions are won or lost long before contracts are signed. While financial, legal, and tax due diligence remain essential, experienced investors increasingly recognise that operational realities—particularly within supply chain and procurement—can materially alter deal value.

In Australia and New Zealand, where businesses often operate with complex logistics networks, long supplier relationships, geographic dispersion, and labour-intensive operations, supply chain and procurement due diligence has become a critical pre-acquisition discipline.

This article explores:

• Why supply chain and procurement due diligence matters
• What good looks like in a pre-acquisition context
• Common risks and value traps
• Where upside is often hidden
• How insights should shape valuation, deal structure, and post-acquisition priorities
• How Trace Consultants supports investors, private equity firms, and corporates through this process

Why supply chain and procurement due diligence matters more than ever

In theory, supply chain and procurement should be predictable contributors to earnings. In practice, they are often the largest controllable cost base and one of the least transparent parts of the business during a transaction.

For many organisations:

• Procurement spend can represent 40–70% of total operating costs
• Logistics, warehousing, and inventory materially impact working capital
• Supplier dependency creates hidden risk
• Service failures directly affect revenue, customer satisfaction, and brand

Yet supply chain performance is frequently assessed through high-level financial snapshots, rather than an understanding of how the operation actually works.

Pre-acquisition due diligence provides an opportunity to:

• Validate whether reported margins are sustainable
• Identify risks not visible in financial statements
• Understand execution capability post-deal
• Quantify realistic cost-out and improvement opportunities
• Avoid overpaying for “paper synergies”

Supply chain and procurement due diligence vs traditional operational reviews

It is important to distinguish transaction-focused due diligence from broader operational diagnostics.

Pre-acquisition supply chain and procurement due diligence is:

• Time-bound and hypothesis-driven
• Focused on value protection and value creation
• Designed to inform investment decisions, not just improvement roadmaps
• Grounded in what is achievable, not theoretical best practice

The objective is not to design the future operating model in detail, but to answer critical investor questions such as:

• Are costs sustainable?
• Where are the risks?
• What upside is real?
• How difficult will change be?

Core objectives of supply chain and procurement due diligence

1. Validate the true cost base

Headline procurement savings are often overstated. Due diligence tests:

• Whether current pricing reflects competitive market rates
• If rebates, incentives, or volume discounts are at risk post-transaction
• Whether cost allocations are accurate
• The impact of inflation pass-through clauses

This ensures the acquisition model reflects real, defendable costs, not optimistic assumptions.

2. Identify supply chain risk exposure

Supply chains fail quietly—until they don’t.

Key risks assessed include:

• Over-reliance on single suppliers or routes to market
• Contractual weaknesses
• Capacity constraints
• Labour availability and industrial exposure
• Technology obsolescence
• Safety, compliance, and regulatory risk

In Australia and New Zealand, geographic isolation, freight volatility, and workforce constraints amplify these risks.

3. Understand working capital dynamics

Inventory is one of the most misunderstood levers in a transaction.

Due diligence examines:

• Inventory quality, ageing, and obsolescence risk
• Forecast accuracy and demand volatility
• Safety stock logic (or lack thereof)
• Supplier lead time reliability
• The realism of inventory reduction assumptions

Poor inventory visibility often leads to post-deal cash surprises.

4. Test operational scalability

Many acquisition theses rely on growth.

Supply chain due diligence assesses:

• Whether existing networks can scale without disproportionate cost
• Warehouse and transport capacity constraints
• Supplier readiness to support growth
• The maturity of planning processes

Growth without supply chain readiness can destroy value quickly.

5. Assess execution capability

Savings only matter if they can be delivered.

This includes evaluating:

• Procurement maturity and capability
• Governance, decision rights, and accountability
• Data quality and systems
• Change readiness of the organisation

A business with theoretical opportunity but low execution capability presents a very different risk profile.

What is typically in scope for supply chain and procurement due diligence?

While scope varies by sector and transaction, it typically includes:

Procurement

• Spend analysis and categorisation
• Supplier concentration and dependency
• Contract coverage and commercial terms
• Price benchmarking and market testing
• Sourcing strategies and compliance
• Procurement operating model and capability

Supply Chain Planning

• Demand forecasting maturity
• Sales and operations planning (or equivalent)
• Planning data integrity
• Responsiveness to demand variability

Inventory Management

• Inventory segmentation and policies
• Obsolescence and slow-moving stock
• Service level alignment
• Working capital drivers

Warehousing and Logistics

• Network design and footprint
• Warehouse productivity and cost drivers
• Transport strategy and rate structures
• Third-party logistics arrangements

Technology and Data

• ERP and planning system capability
• Manual workarounds and spreadsheets
• Data visibility and reporting maturity
• Technology constraints to change

Common red flags uncovered during due diligence

Across transactions, several recurring issues emerge.

Over-dependence on key suppliers

Often masked by long-standing relationships, this risk becomes visible when:

• Contracts are informal or expired
• Pricing is not market-tested
• Knowledge sits with individuals
• Supplier terms change post-acquisition

Unrealistic procurement savings assumptions

Savings models frequently assume:

• Immediate renegotiation success
• No service or quality trade-offs
• Unlimited internal capacity
• Minimal supplier resistance

Due diligence helps distinguish aspirational targets from achievable outcomes.

Inventory bloat disguised as service protection

Excess inventory is often justified as “required for service”.

Closer examination reveals:

• Poor forecast accuracy
• Inconsistent replenishment logic
• Lack of segmentation
• Reactive planning behaviours

This ties up cash and hides systemic issues.

Logistics networks shaped by history, not strategy

Many networks evolve incrementally.

Due diligence identifies:

• Sub-optimal warehouse locations
• Inefficient transport routing
• Underutilised assets
• Contracts misaligned with current volumes

These issues often represent significant medium-term upside, but not always immediate savings.

Limited visibility and reliance on manual processes

Spreadsheets can run a business—until scale or complexity increases.

Risks include:

• Key person dependency
• Data errors
• Slow decision-making
• Inability to respond to disruption

Technology limitations materially affect post-deal execution.

Where value is typically found pre-acquisition

Supply chain and procurement due diligence does more than highlight risk—it identifies opportunity.

Common value levers include:

Procurement scope and demand rationalisation

Before negotiating price:

• Specifications are often inconsistent
• Demand is fragmented
• Services are over-scoped

Rationalisation can unlock savings without supplier conflict.

Supplier strategy reset

Opportunities often exist to:

• Consolidate fragmented spend
• Rebalance supplier portfolios
• Introduce competition where absent
• Improve commercial terms over time

This requires realism about timing and internal capability.

Inventory optimisation

Reducing inventory while maintaining service involves:

• Better segmentation
• Improved planning discipline
• Lead time reduction
• Policy redesign

These are achievable but rarely instant.

Network and logistics optimisation

Changes may include:

• Network redesign
• Contract restructuring
• Mode shifts
• Productivity improvements

These are often staged post-acquisition initiatives.

Using due diligence insights to shape the deal

The best investors use supply chain and procurement insights to actively shape transactions.

This may influence:

• Purchase price adjustments
• Earn-out structures
• Day 1 priorities
• Capital allocation
• Integration sequencing

Rather than treating due diligence as a gate, it becomes a value creation blueprint.

Sector considerations in Australia and New Zealand

Industrial and manufacturing

• Exposure to imported inputs
• Energy and freight volatility
• Long supplier lead times
• Capital-intensive networks

Retail and FMCG

• Demand variability
• Inventory risk
• Supplier power concentration
• Network scalability

Healthcare and aged care

• Regulatory constraints
• Critical supply assurance
• Workforce dependency
• Service sensitivity

Infrastructure and services

• Long-term contracts
• Asset maintenance exposure
• Labour availability
• Geographic dispersion

Each sector requires tailored diligence lenses.

How Trace Consultants can help

Trace Consultants supports investors, private equity firms, and corporates with independent, practical supply chain and procurement due diligence.

Our approach is designed specifically for pre-acquisition decision-making, not generic operational reviews.

What makes Trace different

• Deep supply chain and procurement specialists, not generalists
• Experience across Australian and New Zealand operating environments
• Commercially grounded insights that investors can act on
• Focus on achievable value, not theoretical benchmarks
• Clear articulation of risk, effort, and timing

How we support pre-acquisition due diligence

Trace typically supports transactions through:

• Rapid procurement spend and contract analysis
• Supply chain risk and resilience assessment
• Inventory and working capital diagnostics
• Logistics and network cost evaluation
• Validation of synergy and cost-out assumptions
• Post-deal value creation roadmap development

Our work is structured to integrate seamlessly with financial, legal, and commercial due diligence streams.

Supporting confidence in investment decisions

Whether supporting:

• Private equity acquisitions
• Corporate M&A
• Infrastructure investments
• Carve-outs and divestments

Trace helps decision-makers understand what they are really buying—and what it will take to improve it.

Final thoughts: due diligence is not about finding perfection

No supply chain is perfect. That is not the point.

Effective supply chain and procurement due diligence:

• Identifies what matters
• Separates risk from noise
• Distinguishes aspiration from reality
• Enables informed decision-making

In a market where operational performance increasingly defines enterprise value, ignoring supply chain and procurement due diligence is no longer an option.

For investors and acquirers operating in Australia and New Zealand, it is one of the most powerful tools available to protect downside and unlock upside—before the deal is done.

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For much of the last thirty years, global supply chains were built on a relatively stable foundation. Trade liberalisation expanded, shipping lanes were reliable, supplier relationships deepened, and efficiency was rewarded. Organisations optimised for cost, speed and scale, often assuming that geopolitical stability was a given.

That foundation has shifted. Today, geopolitical uncertainty is no longer a background risk, it is a structural feature of the global operating environment. Trade fragmentation, industrial policy, maritime security risks, energy transition pressures and defence priorities are reshaping how supply chains function. For Australian organisations, these changes carry particular weight.

Australia is geographically distant from many production centres, heavily reliant on maritime freight, and deeply integrated into global markets for energy, industrial inputs and consumer goods. That combination creates opportunity in stable times and heightened exposure when global systems are disrupted.

This article takes a macro perspective on supply chain resilience in uncertain geopolitical times. It explores what has changed, why it matters for Australian organisations, and how resilience can be built in a way that is practical, measurable and economically sound. It also outlines how Trace Consultants can help organisations strengthen resilience without overreacting or embedding unnecessary cost.

The Structural Shift in Global Supply Chains

The most important thing to understand about the current environment is that it is not driven by a single crisis. It is the result of a broader structural shift in how nations think about trade, security and economic sovereignty.

Global supply chains are increasingly shaped by:

• Strategic competition between major economies
• Greater use of tariffs, export controls and trade restrictions
• Policies aimed at securing domestic industrial capability
• Heightened scrutiny of technology, data and critical inputs
• A reassessment of concentration risk and single-point dependencies

This does not mean global trade is ending. It means that supply chains must now operate in a world where policy settings, access rules and political relationships can change quickly and with limited notice. For Australian organisations, this creates a new operating reality: resilience is no longer optional, and efficiency can no longer be pursued without reference to risk.

Maritime Dependence and Chokepoint Risk

Australia’s reliance on maritime freight is one of the most significant structural features of its supply chains. When shipping routes are disrupted, the impact is felt quickly through longer lead times, higher variability, and reduced planning confidence. Geopolitical tension has increased the risk profile of several global shipping corridors. When vessels are forced to reroute, the effect is not simply higher freight rates. Transit times lengthen, schedules become unreliable, and downstream planning assumptions break.

For Australian supply chains, this matters because:

• Long lead times amplify the impact of disruption
• Safety stock requirements increase when variability rises
• Service commitments become harder to maintain
• Cash is tied up for longer periods in in-transit inventory

From a resilience perspective, the question is not whether shipping risk exists, it is how quickly an organisation can adapt when conditions change.

Critical Minerals, Energy Transition and Strategic Inputs

Another macro force shaping supply chain resilience is the global competition for critical minerals and energy transition inputs. These materials underpin renewable energy, electrification, advanced manufacturing and defence systems.

Australia plays a central role as a producer of many of these resources, but resilience challenges remain:

• Global competition for supply drives volatility
• Processing and manufacturing capacity is often offshore
• Policy intervention can distort commercial supply signals
• Infrastructure, workforce and permitting constraints affect scalability

For organisations that rely on these inputs directly or indirectly, resilience requires more than secure contracts. It requires an understanding of where dependencies sit, how substitution can occur, and how supply chain decisions interact with national policy settings.

Defence and Industrial Policy as Supply Chain Drivers

Defence and industrial policy are increasingly influencing supply chain priorities, even outside defence-specific sectors. Governments are placing greater emphasis on sovereign capability, domestic manufacturing, and trusted supplier networks.

This has flow-on effects across the economy:

• Competition for skilled labour intensifies
• Certain inputs and capabilities attract priority demand
• Procurement expectations shift towards resilience and assurance
• Infrastructure investment becomes more targeted and strategic

For Australian organisations, this means supply chain planning must increasingly account for policy direction as well as market forces.

Trade Policy Volatility and Compliance Friction

One of the most disruptive and least predictable elements of geopolitical uncertainty is trade policy volatility. Changes to tariffs, export controls, compliance requirements or customs processes can alter supply chain economics almost overnight.

These changes often result in:

• Sudden cost increases that are difficult to pass on
• Forced supplier or country changes
• Longer border clearance times
• Increased administrative burden and documentation
• Delays to technology deployment or component sourcing

Resilient supply chains are not those that predict every policy change, but those that can absorb and respond to change faster than competitors.

Redefining Supply Chain Resilience

In many organisations, “resilience” is interpreted too narrowly. It is often equated with holding more inventory or reshoring production. While these may be appropriate in some cases, they are blunt tools that can create significant cost without proportional benefit. True supply chain resilience is about capability, not excess.

Resilience is:

• Visibility into dependencies and constraints
• Optionality in sourcing, logistics and production
• Adaptability in planning and execution
• Governance that supports fast, aligned decision-making
• Operational readiness to execute change under pressure

Resilience is not about eliminating risk. It is about managing risk deliberately and economically.

A Practical Macro Framework for Australian Supply Chain Resilience

1. Understand Exposure Beyond Tier One

Many organisations focus on direct suppliers but lack visibility beyond them. True exposure often sits at tier two or three, where single-source components, specialised tooling or country concentration exist.

Resilience efforts should prioritise:

• High-revenue or high-criticality products
• Long lead time inputs
• Limited substitution options
• Concentrated country or corridor dependencies

Perfect visibility is unrealistic. Targeted visibility is essential.

2. Segment Products and Customers by Criticality

Not all products or customers require the same level of protection. Resilience decisions should reflect service criticality, contractual obligations and reputational risk. Clear segmentation prevents over-investment and ensures resilience resources are focused where they matter most.

3. Build Real Optionality

Optionality is only valuable if it can be activated quickly. This may include:

• Pre-qualified alternate suppliers
• Approved substitute materials or specifications
• Alternative ports, routes or logistics partners
• Flexible contract structures
• Contingency production or packaging options

Options that exist only on paper do not provide resilience.

4. Use Inventory Strategically

Inventory remains one of the most powerful resilience levers, but only when used precisely. Blanket increases in safety stock often inflate cost without materially improving service.

Effective inventory resilience focuses on:

• Variability, not averages
• Lead time uncertainty
• Network positioning
• Replenishment flexibility

Smarter inventory beats more inventory.

5. Scenario Planning That Drives Action

Scenario planning must go beyond workshops. Effective scenarios are linked to predefined decisions and triggers.

For example:

• What changes if transit time extends by two weeks?
• How is demand allocated if supply is constrained?
• Which customers receive priority under disruption?
• What service commitments are adjusted first?

Scenarios should drive decisions, not just discussion.

6. Strengthen IBP as the Decision Engine

Integrated Business Planning is the mechanism that allows organisations to balance service, cost, working capital and risk under uncertainty. In volatile environments, IBP becomes the “nervous system” of the supply chain, enabling faster, aligned decisions at an enterprise level.

The Australian Context Cannot Be Ignored

Resilience strategies for Australia must account for:

• Geographic distance from suppliers
• Heavy reliance on sea freight
• Port and landside capacity constraints
• Workforce and skills shortages
• Regulatory and biosecurity requirements
• The economics of regional and remote servicing

Strategies that work in dense continental markets often fail when applied uncritically in Australia.

The Role of Technology

Technology supports resilience when it enables better decisions. It adds value by improving:

• Supply chain visibility
• Planning and scenario modelling
• Exception management
• Performance governance

Technology fails when it is implemented without clear processes, clean data or defined decision rights. Resilience starts with operating model design, not software selection.

How Trace Consultants Can Help

Trace Consultants works with Australian organisations to build supply chain resilience that is practical, defensible and commercially grounded.

Trace can support:

• Mapping supply chain exposure and vulnerabilities
• Designing resilience strategies aligned to business objectives
• Reviewing inventory and network resilience options
• Strengthening Integrated Business Planning for volatility
• Supporting technology and analytics enablement
• Embedding governance and decision-making capability

Trace’s approach is independent and confidentiality-led, focused on building lasting capability rather than one-off recommendations.

A Final Thought

Geopolitical uncertainty is no longer a temporary disruption. It is a defining feature of the operating environment. For Australian organisations, supply chain resilience is becoming a source of competitive advantage. Those that invest in visibility, optionality and disciplined decision-making will protect service, manage cost and maintain trust when volatility hits.

Resilience is not about doing everything differently. It is about being ready to act deliberately, quickly and confidently when the world changes.

Is Your Supply Chain Ready for Uncertainty, or Just Hoping for Stability?

Geopolitics is no longer a distant risk. It’s shaping lead times, costs, and availability in real time. At Trace Consultants, we help Australian organisations build practical supply chain resilience without overcorrecting or locking in unnecessary cost. Clear visibility, real options, and decision frameworks that hold up when conditions change.

Start a conversation with Trace to understand where your exposure really sits and how to strengthen resilience in a way that’s measured, commercial, and fit for Australia’s reality.

How APS Coupled with IBP Can Optimise Safety Stocks

Improving Service Levels and Releasing Working Capital

Few challenges frustrate supply chain, finance and executive teams more than inventory. Too much inventory ties up working capital, increases obsolescence risk and drives storage costs. Too little inventory leads to stock-outs, lost sales, expediting costs and damaged customer trust. In many organisations, both problems exist at the same time.

Across Australia and New Zealand, businesses are carrying historically high inventory levels while still struggling to achieve consistent service performance. Boards and CFOs are asking why working capital has ballooned. Operations teams are asking why service remains fragile. The uncomfortable truth is that inventory outcomes are rarely the result of a single decision or system. They are the product of how demand, supply and uncertainty are managed across the end-to-end planning process.

This is where Advanced Planning Systems (APS) and Integrated Business Planning (IBP) come together. Individually, each plays an important role. When properly coupled, they create a powerful capability for optimising safety stock — improving service levels while simultaneously releasing working capital.

This article explores why safety stock remains so difficult to manage, how APS and IBP address different dimensions of the problem, and why organisations that integrate the two are far better positioned to make confident, value-based inventory decisions. It also outlines how Trace Consultants can help organisations design and embed these capabilities in a practical, sustainable way.

Why Safety Stock Remains One of the Hardest Inventory Problems

Safety stock exists to protect service levels against uncertainty. In theory, it is a simple concept. In practice, it is one of the most misunderstood and poorly governed elements of inventory management.

The Hidden Complexity of Safety Stock

Safety stock sits at the intersection of:

• Demand variability
• Supply variability
• Lead time uncertainty
• Service level targets
• Network design decisions
• Commercial trade-offs

When any one of these inputs is poorly understood or managed in isolation, safety stock quickly becomes inflated or ineffective.

Why Organisations Default to “More Stock”

In many organisations, safety stock settings are driven by historical rules of thumb, static parameters or legacy system configurations. When service issues emerge, the easiest response is to add more buffer. Over time, this creates a ratchet effect — inventory increases, but service does not improve proportionally.

This behaviour is understandable. The cost of a stock-out is visible and immediate. The cost of excess inventory is often diffuse, delayed and poorly attributed. Without the right planning framework, the bias towards over-buffering is almost inevitable.

The Symptoms of Poorly Managed Safety Stock

Organisations struggling with safety stock optimisation often exhibit the same symptoms:

• High overall inventory levels with persistent stock-outs
• Inconsistent service performance by product, customer or region
• Large swings in inventory following demand shocks
• Limited confidence in inventory targets
• Frequent manual overrides of planning parameters
• Tension between supply chain and finance teams

These symptoms are rarely caused by a single failure. They are usually the result of fragmented planning processes and disconnected decision-making.

The Role of Advanced Planning Systems (APS)

Advanced Planning Systems are designed to improve the quality and responsiveness of supply chain planning decisions. When applied effectively, APS provides the analytical engine required to model uncertainty and calculate appropriate safety stock levels.

What APS Does Well

APS tools excel at:

• Forecasting demand with greater statistical rigour
• Modelling demand and supply variability
• Calculating safety stock based on service targets and uncertainty
• Optimising inventory across multi-echelon networks
• Recommending replenishment policies dynamically

Critically, APS moves organisations away from static, one-size-fits-all buffers towards differentiated, data-driven safety stock settings.

Why APS Alone Is Not Enough

Despite its analytical strength, APS is not a silver bullet. Many organisations implement APS and still struggle to realise sustained inventory benefits. Common reasons include:

• Service level targets are poorly defined or unrealistic
• Demand plans are not aligned with commercial assumptions
• Supply constraints are not fully understood or agreed
• APS outputs are overridden due to lack of trust
• Inventory trade-offs are not governed at an enterprise level

APS can calculate optimal safety stock — but it cannot decide what “optimal” means for the business. That decision sits at the IBP level.

The Role of Integrated Business Planning (IBP)

Integrated Business Planning is the governance and decision-making framework that aligns demand, supply, inventory and financial outcomes to enterprise objectives.

What IBP Brings to the Table

IBP provides:

• A single, agreed view of demand and supply
• Clear ownership of assumptions and risks
• Alignment between service, cost and working capital objectives
• Structured trade-off decision-making
• Executive visibility and accountability

In the context of safety stock, IBP answers the critical questions APS cannot:

• What service levels actually matter, and where?
• How much working capital are we prepared to commit?
• Where should we protect service versus accept risk?
• How do inventory decisions support broader strategy?

Why IBP Without APS Falls Short

While IBP sets direction, it relies on robust analytics to inform decisions. Without APS:

• Inventory discussions become subjective
• Trade-offs are debated without quantified impact
• Safety stock decisions revert to averages and heuristics
• Confidence in outcomes is limited

IBP without APS lacks precision. APS without IBP lacks alignment. Together, they enable better decisions.

How APS and IBP Work Together to Optimise Safety Stock

The real value is unlocked when APS and IBP are deliberately coupled as part of a single operating model.

Translating Strategy into Service Levels

IBP defines differentiated service targets based on customer value, product criticality and strategic intent. These targets are then fed into APS, which calculates the safety stock required to achieve them — given actual demand and supply variability.

This ensures safety stock is driven by strategy, not habit.

Quantifying Trade-offs Explicitly

APS enables scenarios to be modelled — for example:

• What happens to service if we reduce safety stock by 10 per cent?
• How much working capital is released if lead time variability improves?
• Which SKUs or locations drive the majority of inventory risk?

IBP provides the forum where these scenarios are evaluated and decisions are made consciously, rather than implicitly.

Creating Trust in the Numbers

When APS outputs are reviewed and endorsed through IBP, confidence in the planning system increases. Over time, manual overrides decrease, and safety stock settings become more stable and credible.

Safety Stock Optimisation Is Not About Minimisation

A common misconception is that safety stock optimisation is about cutting inventory. In reality, it is about placing inventory where it delivers the most value.

In many cases:

• Some items require more safety stock to protect service
• Others can carry significantly less without risk
• Overall inventory may reduce, but not uniformly

APS provides the analytics to differentiate. IBP provides the governance to agree.

Releasing Working Capital Without Damaging Service

One of the most powerful outcomes of coupling APS with IBP is the ability to release working capital without compromising service levels.

This is achieved by:

• Removing unnecessary buffers created by poor visibility
• Reducing duplication of safety stock across the network
• Aligning inventory to true demand variability
• Improving confidence in lead times and supply performance

Rather than blunt inventory reduction targets, organisations pursue targeted, defensible changes.

Improving Service Levels Through Better Buffer Placement

Paradoxically, many organisations improve service levels as they reduce total inventory. This occurs because safety stock is:

• Positioned closer to the point of demand
• Allocated to the right SKUs and customers
• Managed dynamically rather than statically

APS highlights where inventory actually protects service. IBP ensures those insights are acted upon.

The Role of Supply Variability and Lead Time Reliability

Safety stock is as much about supply behaviour as demand behaviour. APS can model lead time variability and supplier reliability, but IBP is where improvement actions are prioritised.

For example:

• Is it cheaper to hold more safety stock or improve supplier reliability?
• Should we invest in dual sourcing or accept higher buffers?
• Where does variability originate, and who owns it?

These are enterprise decisions, not planning parameters.

Why Many Organisations Struggle to Sustain Benefits

Even with APS and IBP in place, benefits can erode if the operating model is weak. Common pitfalls include:

• Treating APS as a project rather than a capability
• Allowing IBP to become a reporting forum instead of a decision forum
• Failing to maintain master data discipline
• Not refreshing service strategies as markets change
• Underestimating change management

Sustained safety stock optimisation requires ongoing governance and capability development.

How to Select and Deploy APS in an IBP Context

Technology selection should never be divorced from operating model design. Organisations should start by defining:

• How inventory decisions should be made
• What decisions belong at which level
• What scenarios executives need to evaluate
• How financial outcomes will be measured

APS should then be configured to support these decisions, not constrain them. The most successful implementations are those where planners, commercial teams and finance are involved early and jointly.

Measuring What Matters

To manage safety stock effectively, organisations need metrics that reflect both service and capital performance, such as:

• Service level attainment by segment
• Inventory turns and days of inventory
• Working capital tied up in safety stock
• Forecast accuracy and bias
• Supply and lead time variability
• Frequency of planning overrides

IBP provides the forum where these metrics are reviewed holistically.

How Trace Consultants Can Help

Trace Consultants works with Australian and New Zealand organisations to improve safety stock performance by designing and embedding integrated APS and IBP capabilities.

Trace supports organisations to:

• Diagnose inventory and service performance issues
• Design IBP frameworks aligned to strategy
• Define differentiated service and inventory policies
• Select and configure APS tools appropriately
• Improve demand, supply and inventory planning processes
• Build confidence in planning outputs
• Establish governance and performance management
• Release working capital sustainably while protecting service

Trace’s approach is independent, practical and grounded in operational reality — focused on enabling better decisions rather than implementing technology for its own sake.

Looking Ahead: Safety Stock as a Strategic Lever

In an environment of ongoing uncertainty, safety stock will remain essential. The question is not whether to hold inventory, but how intelligently it is held.

Organisations that couple Advanced Planning Systems with Integrated Business Planning gain:

• Greater confidence in service commitments
• Improved resilience to disruption
• Lower and more efficient working capital
• Stronger alignment between operations and finance

Those that treat safety stock as a static parameter will continue to oscillate between excess and shortage.

Optimising safety stock is not about perfection. It is about making informed, aligned and value-based decisions — consistently.

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Workforce Planning, Rostering and Scheduling in Emergency Services

Emergency services organisations sit at the sharp end of public service delivery. Ambulance, fire and police agencies operate 24/7, respond to unpredictable demand, and carry an unwavering obligation to protect community safety. When workforce planning, rostering and scheduling are effective, these organisations are ready to respond when it matters most. When they are not, the consequences are felt immediately — by frontline staff, by leadership teams, and by the public.

Across Australia and New Zealand, emergency services are under increasing pressure. Demand for services continues to rise, incidents are becoming more complex, workforce availability is tightening, and community expectations are higher than ever. At the same time, agencies must manage fatigue risk, comply with industrial agreements, and remain financially sustainable in a constrained funding environment.

In this context, workforce planning, rostering and scheduling are no longer back-office functions. They are strategic capabilities that directly influence operational readiness, response times, workforce wellbeing and public trust.

This article explores the unique workforce challenges facing emergency services, why traditional approaches are struggling to keep pace, what effective workforce management looks like in this environment, and how organisations can take a more structured, sustainable approach. It also outlines how Trace Consultants can help emergency services agencies strengthen capability while respecting the realities of frontline operations.

Why Workforce Management Is Critical in Emergency Services

Few sectors face the same combination of operational uncertainty, public scrutiny and workforce risk as emergency services.

Unpredictable and Volatile Demand

Unlike scheduled services, emergency demand fluctuates by time of day, day of week, season, weather, major events and unforeseen incidents. Peaks can be sudden and extreme, leaving little margin for error in workforce availability.

24/7 Readiness Requirements

Emergency services must maintain readiness at all times, regardless of demand variability. This requires sufficient staffing, appropriate skill mix, and fatigue-managed coverage — even when utilisation fluctuates.

Workforce Fatigue and Wellbeing Risk

Extended shifts, night work, overtime, and exposure to traumatic incidents place significant strain on emergency service personnel. Poor rostering and reactive scheduling compound these risks, contributing to burnout, injury and attrition.

Increasing Cost Pressure

Workforce costs make up the majority of operating expenditure for emergency services. Overtime, penalty rates and contingent labour can escalate quickly when base rosters are misaligned to demand.

Compliance and Industrial Complexity

Emergency services operate under complex industrial agreements, fatigue management rules, minimum crewing requirements and safety obligations. Manual processes struggle to consistently manage this complexity at scale.

Understanding Workforce Planning, Rostering and Scheduling in an Emergency Context

Although often grouped together, workforce planning, rostering and scheduling serve different purposes — and all three must be integrated to be effective.

Workforce Planning: Building Readiness into the System

Workforce planning determines what workforce is required to meet service objectives. In emergency services, this means translating demand, response standards and risk appetite into staffing requirements by role, location and time.

Effective workforce planning considers:

• Incident demand patterns and variability
• Target response times and coverage standards
• Skill and qualification requirements
• Fatigue management constraints
• Leave, training and non-operational time
• Long-term workforce supply and attrition risk

Without robust workforce planning, rosters are built on historical patterns rather than future needs.

Rostering: Structuring Coverage

Rostering allocates personnel to shifts over weeks or months. In emergency services, rosters must balance readiness, fairness, compliance, and workforce sustainability.

Key rostering considerations include:

• Shift structures and rotation patterns
• Minimum crewing and skill mix requirements
• Fatigue and recovery rules
• Equity across personnel
• Predictability and stability of rosters

Well-designed rosters reduce the need for constant adjustment during execution.

Scheduling: Managing the Day-to-Day Reality

Scheduling deals with real-time deployment — responding to absences, incidents, surges in demand and operational disruptions.

Strong scheduling capability allows organisations to:

• Redeploy resources quickly
• Maintain coverage without excessive overtime
• Reduce reliance on ad hoc solutions
• Protect workforce wellbeing under pressure

In emergency services, scheduling is often where good planning either holds together — or unravels.

Common Workforce Challenges Across Ambulance, Fire and Police Services

While each service has its own operating model, many workforce challenges are shared.

Reactive Workforce Management

Many agencies operate in a constant cycle of responding to yesterday’s problems. Rosters are adjusted at short notice, overtime is used to fill gaps, and long-term planning takes a back seat to immediate operational pressure.

Misalignment Between Demand and Coverage

Historical shift patterns may no longer align with when demand actually occurs. This leads to periods of overstaffing and understaffing — often within the same day.

Heavy Reliance on Overtime

When base rosters do not reflect demand, overtime becomes the default solution. Over time, this inflates costs, increases fatigue risk and undermines workforce sustainability.

Limited Visibility of True Workforce Cost and Risk

Many organisations struggle to clearly understand:

• The true cost of providing coverage by location and time
• How much demand is met through reactive measures
• Where fatigue and compliance risks are concentrated
• Which stations or units are most vulnerable to disruption

Fragmented Data and Systems

Workforce data is often spread across rostering tools, payroll systems, HR platforms and operational reporting. This fragmentation limits insight and slows decision-making.

Why Traditional Approaches Are Struggling

Historically, emergency services have relied on experience, local knowledge and manual processes to manage workforce complexity. While these approaches worked in more stable environments, they are increasingly strained.

Demand volatility, workforce shortages, compliance complexity and public scrutiny have increased to the point where manual approaches struggle to keep pace. More importantly, traditional methods often optimise for fairness or familiarity rather than readiness and sustainability.

To move forward, agencies need to treat workforce planning, rostering and scheduling as an integrated system — not a set of disconnected activities.

Designing Workforce Models Around Risk and Demand

At the core of effective workforce management in emergency services is a risk-based, demand-driven approach.

Understanding Demand Patterns

Demand analysis should go beyond headline volumes to understand:

• Time-of-day and day-of-week patterns
• Seasonal and weather-driven variation
• Incident types and complexity
• Geographic differences in demand

This allows organisations to align coverage more precisely to when and where it is needed.

Embedding Readiness into Workforce Design

Workforce planning must explicitly consider readiness — not just utilisation. This includes:

• Surge capacity for major incidents
• Redundancy for critical skills
• Fatigue-managed buffers
• Flexibility to redeploy resources

Readiness should be designed into the system, not created through last-minute intervention.

Building Sustainable Rosters

Good rosters in emergency services balance competing priorities. They must deliver coverage and readiness while also being fair, predictable and sustainable for the workforce.

Key principles include:

• Aligning shift structures to demand patterns
• Managing fatigue proactively through design, not enforcement
• Reducing excessive reliance on overtime
• Providing transparency and consistency
• Supporting workforce wellbeing and retention

Importantly, sustainable rosters reduce operational risk over time, even if they require change in the short term.

Scheduling for Operational Reality

No roster survives first contact with reality. Absences, unexpected incidents and surges are inevitable.

Strong scheduling capability enables agencies to:

• Respond quickly without defaulting to overtime
• Make informed trade-offs under pressure
• Maintain compliance and safety
• Protect workforce wellbeing during high-demand periods

Scheduling is not just about filling gaps — it is about managing risk dynamically.

The Role of Technology in Emergency Services Workforce Management

Technology plays a critical role in enabling better workforce decisions, but only when aligned to the operating model.

What Technology Should Enable

Effective workforce technology should:

• Support demand-driven workforce planning
• Enable compliant, optimised rostering
• Provide real-time visibility of workforce availability
• Support rapid, informed scheduling decisions
• Improve transparency of cost, risk and performance

The goal is not automation for its own sake, but better decision-making at every level.

Why Technology Alone Is Not the Answer

Many agencies have invested in workforce systems without realising expected benefits. Common reasons include:

• Poor demand modelling
• Inconsistent data quality
• Overly complex configurations
• Limited change management
• Misalignment with operational reality

Technology amplifies the strengths — and weaknesses — of the underlying operating model.

How to Select the Right Technology

Selecting the right workforce planning, rostering and scheduling technology requires clarity on the future-state operating model before assessing systems. Emergency services organisations should start by defining service standards, readiness expectations, decision rights and compliance requirements. The right technology is one that integrates with existing HR and payroll systems, supports both long-term planning and real-time operations, and is usable under operational pressure. Ease of use for planners, schedulers and frontline leaders is critical, as overly complex systems often lead to workarounds. Just as importantly, organisations should consider scalability, configuration effort, data requirements and the governance needed to keep the system effective as demand, agreements and workforce conditions change.

Measuring What Matters

To sustain improvement, organisations need clear, meaningful metrics. These may include:

• Coverage and readiness measures
• Overtime and premium labour usage
• Fatigue risk indicators
• Workforce utilisation
• Rostering stability
• Absenteeism and turnover
• Cost per hour of coverage

Metrics should support learning and decision-making, not simply compliance reporting.

How Trace Consultants Can Help

Trace Consultants works with emergency services organisations across Australia and New Zealand to strengthen workforce planning, rostering and scheduling capability in a way that respects operational reality and workforce culture.

Trace supports agencies to:

• Understand demand and risk drivers
• Design workforce models aligned to readiness objectives
• Improve workforce planning and forecasting
• Redesign rostering and scheduling processes
• Support technology selection and implementation
• Improve performance visibility and governance
• Reduce reliance on reactive workforce measures
• Build internal capability and confidence

Trace brings experience across complex, high-reliability operating environments and takes an independent, practical approach focused on outcomes rather than theory or tools.

Looking Ahead: Workforce Management as a Readiness Capability

The challenges facing emergency services are not temporary. Demand, complexity and workforce pressure are likely to continue increasing.

Agencies that invest in robust workforce planning, rostering and scheduling will be better positioned to:

• Maintain operational readiness
• Protect workforce wellbeing
• Control costs sustainably
• Build public confidence and trust

Those that rely on reactive solutions will continue to carry higher risk — both operational and human.

Workforce management is not just about filling shifts. In emergency services, it is about ensuring the right people are ready, in the right place, at the right time — safely and sustainably.

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