No regular newsletter would be complete without addressing the elephant in the room. The ongoing conflict in Iran is affecting oil supply, costs, and prices. This is fundamental to Australia’s economy. It affects every business across every industry. The Federal Government’s handling has attracted considerable debate. Everything these days gets labelled a crisis. But oil is a critical component of our way of life. Australia remains deeply dependent on it, whether we like it or not.

Roughly 55–60% of every barrel is refined into transport fuels. That includes petrol, diesel, and jet fuel. The remaining 40–45% becomes feedstock for everyday products. Oil derivatives are present in more than 6,000 items we use daily. Understanding this value chain is central to understanding what we now face. Diesel shortages are spreading across regional Australia. These shortages are cutting into the logistics networks that underpin our food supply. Some farmers cannot plant or harvest. The consequences for consumer demand, food delivery, and service levels are real.

The Government insists supply is not the problem — demand is. Any supply chain consultant will disagree. Balancing supply and demand is precisely what supply chain consulting services exist to do. This reminds me of the toilet paper disruptions during COVID. In 2005, our team produced a report for the Federal Department of Health and Ageing. It focused on managing vulnerabilities in Australia’s health supply chains. The strategy was designed to build supply chain capabilities for exactly this kind of crisis. It was clearly never implemented. This phenomenon is not new. What we are witnessing is a failure of operations strategy. Supply chain professionals call this the bullwhip effect. Consumer demand spikes outpace the current supply. The impact amplifies as it travels through distribution networks.

This represents a critical gap in national business planning and procurement strategy. Effective forecasting and inventory management are not luxuries. They are core supply chain capabilities. They support cost reduction, efficiency, and business continuity. When supply chain expertise is absent, early signals go unheeded. The result is the kind of disruption we are watching unfold now.

Previous newsletters discussed the 4V supply chain model. It covers how we manage visibility and velocity of information and materials. This is central to the current problem. Visibility into accurate product information is critical. It drives decision-making and response time across the entire logistics network. Neither government nor industry received adequate early warning. Demand was spiking across key markets and sourcing channels.

Since COVID, I have worked with two of Australia’s largest toilet paper manufacturers. Together, they represent approximately 52% of the domestic market. Both told me they never missed a single delivery to supermarket distribution centres. Yet we all saw the empty shelves. This shows the complexity of managing an end-to-end supply chain. Many actors are involved — suppliers, manufacturers, logistics providers, and retailers. Each operates across interconnected networks. Each actor has limited control and limited visibility. Each has little influence over how quickly information moves upstream or downstream. The toilet paper example revealed the critical importance of the retailer’s distribution network. It also highlighted the collaboration required between all supply chain partners. Suppliers were meeting their customers’ demands. It was retailers who lacked the capabilities to move products to shelves quickly enough.

Sound familiar to the farmers who cannot buy diesel in regional Australia? If supply gets genuinely impacted, the challenge becomes far more serious. The war is ongoing, and Iran continues to threaten the closure of the Strait of Hormuz. That makes deeper supply disruption more likely every day. That scenario demands a far more sophisticated supply chain strategy. Nothing we have seen from government or industry so far comes close.

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