News 7
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 .
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 decisionmakers 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 decisionmakers 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 .
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