Firms look closer to home to solve supply chain problems
MANUFACTURERS are increasingly using home-grown suppliers after chaos caused by Covid and Brexit.
A survey of more than 130 firms found almost half have more British sources than two years ago – and the trend is set to continue.
Manufacturers body Make UK said its findings showed businesses were reconsidering long-held practices of off-shoring and operating lean and “just in time”.
Disruption and increased volatility were “fast becoming normal”, it said.
As a result, companies were significantly increasing the number of suppliers so they have more options to allow for problems.
A report by Make UK found that those providers were increasingly sourced in the UK or western Europe.
Verity Davidge, Make UK’s director of policy, said: “For decades, manufacturers have used increased globalisation and supply chains to drive efficiency and create lean manufacturing processes which have helped them to 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’.”
Andrew Kinder, of software firm Infor, which helped with the Make UK report, said: “Following a succession of shockwaves – Brexit, Covid and instabilities in Europe – strategists are examining the vulnerabilities of their supply chains. “Long-held beliefs in lean, just-intime and off-shoring are being questioned as volatility and uncertainty replaces predictability and reliability. The rules of supply chain are being redrawn.”
Make UK said manufacturers are calling for a cross-industry and Government taskforce to assess Britain’s current and future supply chain resilience and capabilities.