Taskforce needed to shield UK supply chains against ‘economic shocks’

A bespoke taskforce to assess the health of the UK’s current and future supply chain must be established to protect manufacturers against unpredictable “economic shocks”, industry leaders have warned.

Manufacturing experts have called for a cross-industry and government group to assess the country’s “supply chain resilience and capabilities” now and in future years.

They have also requested an “action plan” to protect businesses amid recent disruptive global events, such as the COVID-19 pandemic.

It follows a major report by Make UK and Infor, ‘Operating without Borders – Building Global Resilient Supply Chains’, which found the pandemic and Brexit caused significant disruption to businesses.

The same report reveals that globally disruptive events have turned supply chains “upside down” and increased volatility in the market, forcing companies to significantly increase the number of suppliers they use and rely more on UK-based firms.

It also highlights that the “just in time” delivery model is now being replaced by a new “just in case” management style, as companies look to protect themselves against disruption.

According to the survey, which sought the views of 132 companies, the biggest disruptor over the last two years has been the pandemic, with 93 per cent saying it had caused some form of disruption. Almost half (47 per cent) said the impact was catastrophic or major. A total of 87 per cent of companies said that Brexit had caused some form of disruption.

Almost two-fifths of companies (38 per cent) said they have increased the number of their suppliers in the last two years, while slightly more (42 per cent) have boosted their UK supply base – with more than a quarter stepping up supply from Western Europe, including Turkey.

Commenting on the survey findings, director of policy at Make UK Verity Davidge, said: “For decades, manufacturers have used increased globalisation and supply chains to drive efficiency and create lean manufacturing processes, which have helped them grow and remain competitive.

“However, the economic shocks of the last few years have created a perfect storm, which has turned these models upside down, 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 era of globalisation passing its peak, with disruption and volatility for global trade fast becoming normal. For many companies this will mean leaving ‘just in time’ behind 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.

Construction News reported last week that some timber products – made from Russian wood – sourced from the Far East could be illegal to import, following sanctions imposed on the country since the invasion of Ukraine.

Concerns over rising fuel and raw material costs are also set to continue, after further government restrictions on Russian gas and oil imports.

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