This startling statistic was revealed by the British Chambers of Commerce from those who completed their 2025 International Trade Survey. This was taken before the conflict in Iran or the legal ruling on the lawfulness of America’s tariffs. Only 15% of businesses are confident of a very resilient supply chain, meaning that 85% foresee some disruption. According to Statista, there are 27 active wars raging that involve military forces at the time of writing. Add to this the rewriting of the world order, echoing the now infamous quote from the late Henry Kissinger, stating that “America has no permanent friends or enemies, only interests”. Since many large businesses rely on stable, robust and predictable supply chains, we thought it worth discussing what you can do.
Resilient supply chains
Resilient supply chains are adaptable, flexible and recoverable in the face of unexpected disruption or change. In other words, fail fast and recover quickly. Vulnerable supply chains are the juxtaposition of resilient supply chains. They allow shocks, disruptions or change to interrupt operations. The consequences of a vulnerable supply chain can be a production line grinding to a halt, empty warehouses or even unpredictable fluctuations in the price of inputs, such as raw materials.
Resilient supply chains find a way to carry on almost seamlessly over the short-medium term in the face of a range of potential disruptions. Long-term disruptions are more challenging to completely mitigate, such as a prolonged conflict causing the price of a resource to increase due to reduced supply. There is also the opposite end of the supply chain, with goods requiring transport to a warehouse, an intermediary or an end customer. A supply chain spans from acquiring raw materials and inputs through to the end user. Ideally, this should be done at the lowest acceptable cost and highest possible efficiency.
Very resilient supply chain
A very resilient supply chain helps you to maintain operational efficiency, competitiveness and customer experience. The interconnectedness and digitisation of a supply chain with a multitude of suppliers, producers and distributors brings ever greater complexity. Ensuring that this lattice work of organisations, connecting you to materials and customers, is immune to delays, price hikes and stoppages is a complex task. So, what can we do to create a very resilient supply chain?
We recommend 3 steps to create a very resilient supply chain:
- Review procurement processes;
- Review your sourcing strategy;
- Risk management.
Now, lets look at them in a little more detail.
1. Review procurement processes
The definition of procurement may differ in each organisation. Some have centralised procurement teams, some have procurement and vendor management and others have local buyers. In general, the approach taken is an end-to-end process to source, contract and obtain your inputs and then ensure effective performance over time. This begins at supplier assessment to establish the relative capabilities of each organisation. It then moves onto a commercial negotiation and the agreement of often complex, contractual terms. Finally, you obtain the supply to the specification of the contract. As the ongoing relationship matures, you can focus on increasing effectiveness and how to manage risks.
2. Review sourcing strategy
Although you may have reliable or even ‘favourite’ suppliers that deliver a great experience, they may not have been tested. Given the current geopolitical instability, tariffs and positions on trade agreements, it makes sense to review how you source. Do you single source? This may be higher price but lower risk for a trusted, unique or specialist supply. Do you have multiple sources? This may mean lower volumes per vendor but it provides alternatives. Do you source regionally or globally? This may mean supply closer to production facilities or importing from the lowest cost internationally. Whilst the focus of this article refers to physical inputs such as raw materials, it could equally apply to people and talent.
3. Risk management
No supply chain is resilient if it pays little attention to risk management. If anything, the attention paid to risks, their likelihoods and potential mitigations should be obsessive at the present time. It could also be a regular item at senior leadership team meetings and items added to the business’ overall risk register with owners and action plans to mitigate. Both steps 1 and 2 come with risks. For example, awarding lower volumes to multiple suppliers may be more expensive and unpredictable, especially if ordering is inconsistent. Similarly, sourcing globally comes with geopolitical risk, particularly if they are in opposition to US interests right now. We would recommend a fastidious approach to sources of risk and plans to mitigate them, both leaning on current relationships and forging new ones.
85% of businesses need more supply chain resilience
There are around 270k UK manufacturers, according to Make UK. These contribute around £220bn of economic output and nearly 2.6m jobs. If 230k or 85% of these have concerns over the resilience of their supply chain, then there is a great deal of work to do. While manufacturers represent less than 6% of UK companies, it represents 9% of employment and 10% of GDP, according to the Government. The majority are SMEs, which may lack the resources and skills to deploy robust procurement and vendor management frameworks. As disruption continues and headwinds grow stronger, this leaves UK manufacturing vulnerable.
Private Equity (PE) is looking favourably on UK manufacturers as value for money acquisition targets. There are nearly 13k companies owned by PE houses, according to the Government, representing about 8% of employment. Given our lagging robotisation, slow adoption of AI and sluggish productivity, there are gains to be made. Furthermore, with the UK having one of the easiest markets to do business with, according to the Institute of Directors (IoD), exports could easily grow. PE brings rigour and intense scrutiny of data and the financial metrics behind decisions and performance. Such a mindset would fit well with manufacturing, bringing rigour, scenario modelling, investment appraisal and risk management tools to the forefront. A very resilient supply chain will undoubtedly be one of the focus areas for predictable and scalable returns.
A final thought on supply chain confidence
If the prices of your raw materials frequently change by more than a few percentage points, the financial impacts can be large. If suppliers ‘stock out’ or show little interest in fulfilling your order quickly (or at all), you may face production delays and unhappy customers. Where multi-sourcing or global sourcing strategies are involved, there is greater risk of fraud, loss and delay. Although you can point to a favourable purchase price variance (PPV) in the stable good times, this can easily be wiped out by disruption. Where a contract negotiation brings procurement savings versus a predictable buying pattern, this also does not help if you can no longer obtain those supplies. If Just-in-Time (JIT) is the aim for efficiency but the production line has stopped and the shelves are bare, contract penalties may ensue for breach of SLAs. In summary, we recommend doubling-down on supply chain management.
Supporting you to have a very resilient supply chain
Think Beyond provides research, assurance, planning and change services. We can help you to identify the optimum sourcing strategies, balancing risk and efficient operations. We can also provide assurance over processes, risk management frameworks and planning efficacy. So, if you need support to make your supply chain as resilient as possible, we are happy to support you.
If you would like to discuss an engagement with us, simply reach out to our team today. Alternatively, why not drop us a line on email with any question you have.
Finally, why not read our blog on sourcing resilience and dealing with business uncertainty.