UK Businesses in the Middle of a Chain Reaction, with Nearly Half Experiencing a Surge in Supply Chain Disruption
Ivalua study finds UK businesses believe supply chain disruption will increase over the next 12 months, with 60% saying supply chains are more fragile than ever.
London, U.K, 12th September 2024. Research from Ivalua, a global leader in spend management, has found that nearly half of UK businesses (47%) have experienced an increase in supply chain disruption in the last 12 months. In the last year alone, UK businesses have been disrupted by high inflation (79%), high energy/fuel costs (75%), the war in Ukraine (53%), and the Red Sea conflict (44%).
The study of 300 supply chain and procurement decision-makers in the UK found that over the next 12 months, 45% anticipate that supply chain disruption will increase. In fact, 60% of UK businesses agree that after years of disruption, their supply chains feel more fragile than ever.
To help supply chains recover, UK businesses said the following strategies have been very effective at mitigating the impact of supply chain disruption:
- Improving the geographical diversity of their supplier base (64%)
- Finding alternative suppliers for critical goods and services (64%)
- Increasing nearshoring (63%)
- Increasing onshoring (61%)
“Supply chain disruption continues to have a significant impact on business operations due to repeated, unpredictable ‘Black Swan’ events,” comments Ian Thompson, VP Northern Europe at Ivalua. “These major disruptions used to be rare, but now feel like a fact of life. This has meant global supply chains have become more fragile than ever, causing delays, shortages, and increased costs as factories shut down and transportation networks fall victim to delays. Consequently, UK businesses feel like they’re stuck in a loop of constant disruption, unable to fully recover after each event.”
Preparing for disruptions before they spark a chain reaction
The increasing number of supply chain disruptions have prompted organisations to re-evaluate supply chain strategies to insulate themselves from supply chain shocks. However, 46% don’t have enough visibility into which suppliers are impacted by supply chain disruption, while 43% of organisations say they can’t adapt quick enough.
To deal with ongoing uncertainty, UK businesses are focusing on adopting the right tools and processes. Over half (58%) of organisations said investing in technology to improve supply chain visibility has been very effective at helping to mitigate the impact of supply chain disruption, while 58% said the same for collaborating with suppliers to share more risk data. A further 71% said implementing AI to automate supplier risk management has been effective at reducing the effect of supply chain disruptions.
“Four-in-ten UK businesses agree that their supply chain recovery is moving at a snail’s pace, so it’s vital they take proactive measures to minimise the impact of disruptions,” continues Thompson. “This means arming procurement teams with the right tools to improve supply chain transparency and collaboration.”
“A smarter approach to their procurement is required. This includes utilising AI to become more agile by gathering better insights from disparate information sources in near real time, giving complete visibility into all suppliers and all spend, enabling better decision making. This smarter approach helps provide a 360-degree view of everything that’s happening within the supply chain, empowering procurement teams to anticipate disruption and be more agile in their response,” concludes Thompson.
About the research
The survey was conducted by Sapio Research on behalf of Ivalua from the 29th April to the 10th May. It is based on a survey of 300 supply chain and procurement decision-makers in the UK.
About Ivalua
Ivalua is a leading provider of cloud-based, AI-powered Spend Management software. Our unified Source-to-Pay platform empowers businesses to effectively manage all categories of spend and all suppliers, increasing profitability, improving sustainability, lowering risk and boosting employee productivity. We are trusted by hundreds of the world’s most admired brands and recognized as a leader by Gartner and other analysts. Learn more at www.ivalua.com. Follow us on LinkedIn and X.
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