Government and business must increase collaboration in 'new reality' for supply chains

A whole new paradigm is needed in the relationship between government and business in the “new reality” of supply chain management, an event was told.

Post-pandemic disruption will require governments to develop local capacity, decentralise manufacturing hubs, cut down on bureaucratic processes and red tape, and collaborate more with the private sector.

“The old theories about business being left alone, government doing their own regulation, supply chain management being left to private sector, quite frankly don’t hold,” said Dr Fred Matiang’i, cabinet secretary for the Ministry of Interior and Coordination of National Government in the Republic of Kenya.

During a panel on global supply chains at the Qatar Economic Forum, Matiang’i warned governments that “remain steeped in bureaucracy” will worsen disruption moving forward. He suggested further decentralisation of manufacturing hubs, so countries are not dependent on a singular region avoiding disruption. 

He continued: “The world was not used to departing from traditional methods of production so that we could face the challenges we found ourselves in. Governments were not ready to shave off some of their bureaucratic challenges so that business would be hastened and made faster.

“Many governments, especially in sub-Saharan Africa, maintain a very old red-tape system of supporting business. In some parts of the south, solid relationships between business and government do not exist. The gaps that do exist are mediated by long red tape and bureaucracy, which worsened the disruption as a result of Covid. 

“The challenges we faced have introduce a whole new world order, and a whole new reality, in terms of supply chain management. Most importantly, the way in which governments deal with business has been redefined forever. Only governments who reorient their perspectives and engage with businesses are going to succeed in serving their people.”

Ahmad bin Mohammad Al-Sayed, minister of state and chairman of the Qatar Free Zones Authority, said: “Governments collectively and international organisations should ease the policy here to ease goods transportation and the trade logistics. In addition to policy intervention, different measurements, there is no way we can rely on normal international trade without building local storage capacity.”

Matiang’i went on to say in each case where decisions were made to increase resilience, governments were involved directly. “Governments cannot retreat now from supply chain capacities and building local resilience infrastructure. One critical lesson we must learn is looking inside, building local capacities.”

Abdulrahman Salim Al Hatmi, CEO of logistics solutions provider the Asyad Group, said businesses would move into a “multiple sourcing reality”.

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