In partnership with Infor, MakeUK, the Manufacturers association has published a report, “NO WEAK LINKS: BUILDING SUPPLY CHAIN RESILIENCE”. The report was launched at the start of the MAKE UK National Manufacturing Conference.
The report highlights the importance of supply chain networks for manufacturing businesses in the UK. It looks at how organisations can strengthen their resilience through the help of technology.
The report considers the supply chain volatility that manufacturers have faced since the pandemic began in 2020. Global events have ensured that the disruption to supply chains continues. Organisations must look to support their supply chains. The authors highlight that one way is to improve supply chain monitoring, enabling them to react to emerging issues.
The report is based on a survey carried out by MAKE UK, though neither the press release nor the report itself indicates the demographics of the survey and how many respondents there were. It is 24 pages long, and after an executive summary, it is divided into 4 main sections:
- Supply chain state of play
- A Chain is only as strong as its weakest link: Supply Chain Strategies
- Supply Chain Technologies
- Unlocking Supply Chain transformation
The report concludes with several recommendations for the industry and Government. It concludes with a viewpoint from Andrew Kinder, Senior Vice President, Industry Strategy Infor.
What is in the report
The report contains a mix of statistics from the survey alongside analysis. There is no qualitative element to the survey, and therefore no manufacturer comments to further highlight organisations’ challenges. Some boxed-out sections look at the role of government, notably the relationship between the UK and the EU.
State of the supply chan
Much of the report is taken up by a detailed look at the state of the supply chain for UK manufacturers. 93% of manufacturers agreed that supply chains will remain under pressure through 2024 at least. Supply Chain risk is top of mind for 80% of respondents. 76% agree or strongly agree that they are confident in meeting the demand for goods and services. The report did not dive into why nearly a quarter was not confident.
Challenges such as increased material costs (71%), transportation costs (69%) and energy costs (68%) are top of mind at the moment. Supplier performance is the fourth highest at 56%. The volatile atmosphere has led to changes in the supply chain and reliance on the EU for customers and suppliers. The authors call for a reduction of tariff barriers with the EU.
The report also highlights what changes manufacturers have made to supply chain strategy. The top three implemented are:
- Increased supply chain monitoring – 47%
- Diversification of suppliers – 43%
- Long-term supply contracts – 39%
Manufacturers have evolved their supply chains by necessity, but have they transformed their technology enough?
Supply Chain Strategies
The second section looks at the state of supply chain monitoring. While 82% of manufacturers stated that supply chain monitoring is critical to their business, around a quarter neither monitor up or down the supply chain—63% monitor up the supply chain, and 64% monitoring down it by two tiers.
There is vast room for improvement. 62% of businesses have not changed their strategy to invest in supply chain technology. However, 47% have increased supply chain monitoring. This is woefully short of what is needed, though.
The report breaks down the findings by the size of the manufacturer. However, the tables in the report that Enterprise Times had access to were unclear on which applied to diversification, consolidation or supply chain monitoring.
Since the pandemic, manufacturers are finding suppliers close to home. 40% said they had increased their UK suppliers, and 20% have increased suppliers in the EU, despite barriers. The report also discussed the friend shoring trend, though it offers no evidence that this is happening, just emerging interest.
Supply chain technologies
Supply chain technology can help transform an organisation’s supply chain resilience. However, manufacturers appear to be falling short of other industries in terms of transformation. Only 46% use dashboards and analytics, 14% have supply chain control towers, and 8% utilise AI and machine learning. Manufacturers believe that data and cloud computing will positively impact productivity and efficiency.
Challenges remain for those companies looking to build resilient supply chains.
- 28% cited a lack of skills and training
- 22% cited a lack of timely data
- Only 13% see no barriers
Unlocking Supply Chain transformation and recommendations
Something needs to happen with 1/3 of manufacturers concerned about meeting the demand for goods and/or services in the next two years. Only 15% have sought government advice. They need help, with the recommendation section indicating that manufacturers should talk to vendors, such as Infor, that offer supply chain solutions.
MAKE UK, as an industry association, identifies three things government or other organisations can do in its recommendations
- Establish a regional SME advisory service for digital adoption
- Introduce a tax break for businesses that adopt digital solutions
- Introduce a Manufacturing Mentor Scheme
In conclusion, Kinder notes that the volatility continues adding, “There is no cure for volatility – it is here to stay. However, we can use technology to rapidly identify or predict supply chain disruptions, analyse alternatives, prescribe remedial actions and automate responses.
Decision velocity won’t prevent volatility and disruption, but it is perhaps the best antidote to mitigating its impact.”
Enterprise Times: What does this mean
This report is worth a read. However, it falls short of offering real advice to manufacturers. The calls to the government are most valid, and no doubt the same calls will be heard today at the event. What would have been useful in this whitepaper is for the authors to pose questions of challenges that the manufacturers could ask themselves about their approaches to supply chain resilience.
These could have included:
- Do you have visibility of your supply chain?
- If a supplier suddenly disappears from your network, what processes are in place to address the shortfall?
- Can you identify a partner/consultant you can work with to discuss supply chain resilience?