Supply chain disruption 'to last six months or more'

20 December 2021

A third of UK supply chain managers who have experienced disruption have replaced international suppliers with UK alternatives, according to a CIPS survey.

The study, which polled 228 UK supply chain managers, found 85% had experienced supply chain disruption this year as businesses continued to grapple with the impact of the Covid-19 pandemic.

Of this group, a third have brought production back to the UK as ties are cut with international suppliers.

Most of this group expected supply chain issues to continue well into 2022, with nearly three-quarters (71%) expecting supply chain interruptions to last for six months or more. More than a third (36%) expected shortages to continue for over a year. Some 60.25% of all respondents who experienced disruption expected supply chain disruption to last six months or more.

More than one in 10 (12%) intended to replace overseas suppliers but had not found any suitable UK replacement suppliers yet, while 15% reported international suppliers had stopped working with them as a direct result of supply chain disruption.

Almost half (48%) of those impacted have increased prices as a result of disruption, with 14% forced to completely stop selling some products.

Supply chain disruption has also caused significant financial issues for firms, with 91% of disrupted organisations saying shortages had put financial pressure on them in the last year.

According to the survey, 71% of supply chain managers had experienced delivery delays and 49% had been forced to over order stock. Sustainability was receiving less emphasis for 34%, while 17% had revised their product offering.

John Glen, CIPS chief economist, said the situation had highlighted how important smooth running supply chains were to the business community, the economy and the public.

“As supply chain managers continue to grapple with the magnitude of the challenges of the last year, businesses and consumers alike should brace for increased prices and a lack of product choice for some months to come,” he said.

However Glen cautioned against relying on a small pool of suppliers due to the unpredictability of supply chains.

“Supply chain managers looking ahead to the new year should diversify their supply chain as much as possible and aim to build strong relationships with their existing suppliers to ensure they are in the best possible place to adapt to any future disruption,” he said.

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