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Defense Wins Supply Chains?
Liza Amlani --  Retail Strategy Expert Liza Amlani -- Retail Strategy Expert
For Immediate Release:
Dateline: Toronto, Ontario
Thursday, May 9, 2024


I was invited to a lunch meeting at the Economic Club of Canada last week to hear remarks from Canada’s Minister of National Defense, the Honorable Bill Blair.

It might seem a bit askew to attend such an event, but the subject matter is directly relevant to the retail industry as a whole. No doubt, you have read about world events impacting supply chains. Boats getting stuck in the Suez Canal, a fatal crash of a ship in Baltimore and attacks by Houthi rebels on ships in the Red Sea. The WSJ reports that supply chain managers think about geopolitical risk more than any other risk. The challenge now is to build a resilient and secure supply chain — one that withstand the impact of world events.

Because a secure supply chain is a profitable one.

As such, there is a need for alternative routes to ensure goods can arrive in a timely manner while those operating the ships can move freely and safely. Minister Blair spoke about creating more infrastructure way up north in the Arctic.

Ice is melting in the Arctic at a pace that opens up the possibility of shipping through the region. More routes, increased investment in transportation and infrastructure in the north could give brands access to more distribution routes, raw materials and other resources.

(No surprise, these comments coincide with an announcement in early April that Canada will increase its military spending to the tune of $73 billion.)

But, nothing is ever that simple. Even if Arctic shipping routes become more accessible, Russia is already ramping up investments to ship through the region. There are a number of environmental concerns and current boats are not immediately ready to endure arctic conditions.

Nearshoring of manufacturing suddenly takes on more importance. It’s not only about supporting “Made in USA/Canada” but it adds a layer of security to the supply chain. Also, cutting out time to market in other ways becomes a necessity; you can’t influence what is happening in the Red Sea but you can influence what happens within your own four walls.

I’m also curious to the extent to which brands, industry groups and government agencies are working together. Supply chains are highly complex and are further complicated by foreign policy. For instance, is the NRF just as sedulous for supply chains as it is for retail theft?

Whether or not a Northern Canadian/Arctic route becomes viable will be answered over time. What is of immediate concern is think about proactive measures to help keep the supply chain secure. Doing so means preserving profitability for brands and retailers alike.

Retail Strategy Group works with market-leading brands to help them improve profitability and increase organizational effectiveness. For more information, visit www.retailstrategygroup.com.

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