How manufacturing is changing in the UK
Supply chain challenges have impacted many sectors in the UK. In January 2023, one in eight (12%) businesses with 10 or more employees experienced global supply chain disruption*.
Becoming resilient to global shocks has become more important to businesses with an additional focus on contingency planning. Many SME’s have used the experiences of Brexit and Covid lockdowns to become more dynamic, offsetting disruptions to labour shortages, delivery delays or scarcity.
Successful companies now see value is moving away from ‘just in time’ manufacturing to ‘just in case’. Trends are no longer in line with the lowest cost of production, with many consumers now willing to spend more for consistency, reliability and transparency from brands and businesses.
With businesses preparing for the future, securing repeat custom may come down to navigating supply chain disruption. This will include acknowledging the up-front costs in getting ahead with production.
How to get ahead of supply chain disruption
1. Improve technology
Automated systems and increases in available data will highlight potential impacts to production. Improving technology within manufacturing and shipping will add value for many throughout the supply chain.
2. Change supply networks
Diversifying and expanding suppliers, gives businesses the flexibility to minimise the effects on unplanned events. Building a reliable network, that can be accessed globally, gives more room to adapt should orders become delayed.
3. Buying in bulk
Some industries will have the ability to amass required items for added reassurance. The increase in upfront expenditure may reduce production costs and allow for negotiation with suppliers.
4. Improve cashflow
Ensuring adequate cashflow can aid all the above solutions but also gives businesses flexibility to prioritise where funding needs to be allocated for best performance and keeping their supply chain moving.
Whether it is having cashflow to make payments to suppliers promptly or to facilitate greater storage options for buying in bulk, cashflow will give stability to operations and allow for focus on growth.
SME’s looking for alternative financing options, such as invoice discounting, invoice factoring and asset-based lending, to improve cash flow for businesses can get in touch to find out more.
*Business insights and impact on the UK economy: 9 March 2023
