Urgent call for action to tackle disruption to UK supply chains

A call for urgent action has been made by UK manufacturers and exporters to secure the country’s current and future supply chains.

A report by the trade association Make UK is urging the creation of an industry and Government task force to assess the problems.

Unprecedented economic shocks

The report blames a series of unprecedented economic shocks over the last few years which have badly affected the supply chains and, as a result, many businesses are turning inwards to find new suppliers.

In addition, the rocketing costs of energy, plus higher transport and supply costs are having a debilitating effect on businesses.

Make UK has made a series of recommendations to Government to help ensure the UK economy is in a stronger position to respond to future disruption.

The establishment of the task force

  • Supply chain software management should be included in the ‘Help to Grow: Digital’ scheme
  • To help businesses plan ahead, public data reports on lead times of raw materials should be developed and published.
  • Explore how larger firms can provide greater visibility of supply chains at higher tiers to share information with SMEs with limited scope
  • Capital allowances or a form of
  • Tax breaks like capital allowances to be introduced to help businesses adapt to digital solutions.
  • Regional initiatives to deliver supply chain support

Its survey of members, reported in the Manufacturer online magazine highlight how the ‘just in time’ process,  has been affected as previously guaranteed transport systems and low-cost production has been disrupted. Just in time that aligns raw-material orders from suppliers directly with production schedules.

As a result, this has led to companies significantly increasing the number of suppliers so they have more options in the event of disruption, with these suppliers increasingly sourced back in the UK or Western Europe

Production lines re-shored

The continuing war in Ukraine and lockdowns in China are likely to further accelerate these trends in the near future, so manufacturers are now ‘reshoring’ production lines in the UK as a result of the economic shocks of the pandemic and Brexit, according to the FT.

In the survey, 75 per cent of the 132 companies surveyed say they have increased the number of UK suppliers over the past two years, with more than half intending to boost their UK supply base in the near future.

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Posted in Business, Economy.