Task force needed to protect UK supply chains from ‘economic shocks’
A bespoke task force to assess the health of the UK’s current and future supply chain must be created to protect manufacturers from unpredictable ‘economic shocks’, industry leaders have warned.
Manufacturing experts have called on a cross-industry and government group to assess the country’s “supply chain resilience and capabilities” now and in the years to come.
They also called for an “action plan” to protect businesses from recent disruptive global events, such as the COVID-19 pandemic.
It follows a major report from Make UK and Infor, ‘Operating Without Borders – Building Resilient Global Supply Chains‘, which revealed that the pandemic and Brexit have caused significant disruption to businesses.
The same report finds that disruptive events globally have upended supply chains and increased market volatility, forcing companies to dramatically increase the number of suppliers they use and rely more on companies based in the UK.
He also points out that the “just in time” delivery model is now being replaced by a new “just in case” style of management as companies seek to protect themselves against disruption.
According to the survey, which asked the opinions of 132 companies, the biggest disruptor of the past two years has been the pandemic, with 93% saying it has caused some form of disruption. Almost half (47%) said the impact was catastrophic or major. A total of 87% of businesses said Brexit had caused some form of disruption.
Almost two-fifths of businesses (38%) said they had increased their number of suppliers in the past two years, while slightly more (42%) had strengthened their UK supply base – with more a quarter stepping up supply from Western Europe, including Turkey.
Commenting on the survey results, Make UK Policy Director Verity Davidge, said: “For decades, manufacturers have used increased globalization and supply chains to increase efficiency and create better manufacturing processes. lean, which helped them grow and stay competitive.
“However, the economic shocks of recent years have created a perfect storm, which has upended these patterns, and forced companies to re-evaluate their business strategies and seek suppliers much closer to home.
“As a result, we may now be seeing the age of globalization reach its zenith, with disruption and volatility in global trade rapidly becoming normal. For many companies, this means abandoning ‘just in time’ and embracing ‘ just in case “. “
UK supply chains have suffered from rising energy, transport and raw material costs, as well as transport availability in recent months.
Building News reported last week that some wood products – made from Russian wood – from the Far East may be illegal to import, following sanctions imposed on the country since the invasion of Ukraine.
Concerns about rising fuel and raw material costs are also likely to persist, following new government restrictions on Russian gas and oil imports.