In response to uncertain geopolitical conditions, manufacturing companies are expediting the process of “relocalization” in their supply chains, opting to rely more on local suppliers
A recent study by Make UK, a prominent industry lobby, sheds light on the significant challenges faced by companies in their supply chains. Rising costs and geopolitical uncertainty have exerted relentless pressure, resulting in unacceptable delivery delays.
As a consequence, the manufacturing industry has witnessed a notable trend of relocating suppliers, with 40% of manufacturers having already done so in the past year, and a similar number planning to do so in the upcoming twelve months. This information, confirmed by the industrial lobby in a press release, aligns with findings from a previous report published in May.
The association further highlights that British companies are actively investing in technological tools to enhance supply chain management, while also making adjustments to the number of their suppliers.
According to Make UK’s survey, the primary factor disrupting supply chains is the escalating costs, particularly driven by the surge in prices of raw materials, transportation, and energy.
Make UK further notes that suppliers from the European Union and other regions are showing reduced inclination to provide goods to companies in the UK. This trend is attributed to the challenging political relations between London and Brussels, among other factors.
The significance of this issue is further underscored by the fact that over one-fifth of suppliers in the UK are based in the European Union, as highlighted by Make UK.
According to another press release, Stephen Phipson, the Chief Executive of the organization, is scheduled to deliver a speech on Tuesday, calling for a reset of the UK’s political and trade relationship with the EU. Phipson aims to put an end to the rancor and political chaos that has characterized recent years.
Mr. Phipson specifically commends the compromise reached between London and Brussels, which was announced in late February and pertains to post-Brexit provisions in Northern Ireland. He expresses hope that this development marks the beginning of a new chapter in the relationship between the United Kingdom and the European Union.