Supply chain risk in Canada

15 February 2019

Challenges facing the Canadian construction industry.

Challenging climatic conditions, political risk and the sheer scale of Canada’s geography weigh most heavily on the minds of Canadian developers when considering the integrity of their supply chains.

That being said, supply chain risk remains an area to which contractors and project owners often fail to devote sufficient attention towards.

In recent years, disputes over the North American Free Trade Agreement (NAFTA) have strained relations between Canada and its neighbour to the south, as have steel tariffs.

Consequently, developers are increasingly moving to a global sourcing model for infrastructure projects in order to mitigate the negative impact that tariffs can have upon material availability.

Transportation and weather risk

A further supply chain risk that is particularly relevant to Canada concerns transportation and weather risk.

The size of the country and the harshness of the winters make transportation challenging and different regions present natural catastrophe risks, including flooding and earthquakes.

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To best manage this disparate range of risks, developers must ensure that they have a full and proper understanding of the interdependent relationships that exist between all the project stakeholders.

With this in mind, it is important that the supply chain is mapped at every level, from sourcing raw materials to hiring plant and equipment and beyond.

Mapping the supply chain often reveals issues the company was previously unaware of, such as supplier concentration or lack of diversity where, for example, a key supplier and the alternative are both located in the same region and potentially have the same exposures.

For more information, please contact Justin Campisi, Vice President in JLT Canada on +1 416-644-4819