Small to medium sized enterprises (SME) employ 95% of the Australian workforce. Most of the organisations, employing most of the workforce, do not have any formal quality management systems. As such, Australian businesses, particularly SME’s, have remained somewhat isolated in terms of operational and competitive readiness compared to their peers in other countries. Based on research conducted in 2010, using a series of structured focus groups of logistics and supply chain professionals from a diverse spectrum of industries across a pan-Australian base, it has been determined that over 85% of the participants in the focus groups had no formal quality management systems within their own organisations or indeed within their immediate supply networks. Interestingly, most of the participants of the focus groups indicated that they thought formal quality systems would have a limiting factor on their operations. Further investigation into organisations who were outsourcing products and services from Australian companies indicated that, post the Global Financial Crisis, there has typically been a change in policy, and most organisations are now precluding once qualified local suppliers because of their lack of formal quality systems. This decision is typically based around issues such as risk mitigation and further moves into more comprehensive corporate social responsibility. This paper discusses this recent research and the implications of the widening gap in Australian supply and demand based on the lack of formal quality systems in a significant percentage of the supply base.