ASCI Connect

Hi everyone,

As a prospective member of the ASCI forum, I wanted to open a discussion on procurement challenges currently shaping the Australian market, particularly across regulated and multi-channel environments.

From both public sector frameworks and private enterprise operations, several recurring pressure points are becoming more pronounced.

Supply chain volatility continues to be a major concern. Australian procurement remains highly exposed to international dependencies, particularly across Asia-Pacific manufacturing hubs. Disruptions linked to freight, geopolitical factors, and production delays are still affecting lead times and pricing consistency, while limited domestic manufacturing capacity reduces flexibility.

Cost escalation is another key pressure. Procurement teams are increasingly operating in an environment where inflation impacts raw materials, logistics, and supplier pricing. This creates ongoing tension between maintaining service levels and protecting margins, especially in sectors like retail, construction, and government-funded projects.

Regulatory and compliance complexity also plays a significant role. Organisations must navigate Australian Consumer Law requirements, ethical sourcing standards, modern slavery obligations, and strict government procurement frameworks. Managing these obligations while remaining commercially agile is becoming more resource-intensive.

Supplier risk and concentration remain persistent challenges. Many organisations still rely heavily on a narrow supplier base, which increases exposure to disruptions. Concerns around supplier financial stability, limited sourcing diversification, and lack of visibility across extended supply chains continue to impact resilience.

There is also a noticeable gap in digital transformation. While procurement functions are evolving, adoption of automation, integrated systems, and data-driven decision-making is inconsistent. Manual processes and fragmented tools continue to limit efficiency and strategic insight.

At the same time, stakeholder expectations are rising. Procurement is increasingly expected to operate as a strategic business partner, balancing cost savings with quality, supporting ESG objectives, and managing complex internal stakeholder demands across legal, finance, and operational teams.

I would be interested to hear how others in the forum are approaching supplier diversification in the current market, balancing compliance with speed, leveraging AI or automation in procurement workflows, and managing cost pressures without compromising service delivery.

Looking forward to learning from the collective experience here.

Thanks,

Your discussion points are valid and timely.

You may be aware of recent announcements concerning the Australian Government's $1 billion Economic Resilience Program, which forms part of the National Reconstruction Fund Corporation initiative. The program aims to support Australian manufacturers and logistics companies, particularly in sectors such as freight, fuel, fertiliser, and plastics, that have been significantly impacted by market disruptions arising from the conflict in the Middle East.

In addition, to strengthen and safeguard the Australian market, the Federal Government amended the Commonwealth Procurement Rules on 17 November 2025. The Commonwealth procurement framework plays a critical role in shaping Australia's economic landscape.

Notably, the updated rules introduce, for the first time, requirements to prioritise Australian businesses in procurements below specified thresholds. Furthermore, the non-construction procurement threshold has been increased for the first time in two decades, thereby expanding procurement opportunities for Australian businesses.

Many Tier 1 companies are also introducing mandatory local content requirements, further reinforcing this shift toward domestic participation.

Having said that . For example, in the West Gate Tunnel Project in Victoria, a significant portion of the steel fabrication was undertaken overseas. Additionally, there have been instances where major infrastructure projects-valued at over AUD 50 million-have been awarded to overseas enterprises, including Chinese firms.

Amit Roy