Don McCombe, Supply Chain Advisor for Leeds City Region Supply Chain Programme explains how current global events affect local supply chains and how Leeds City Region Supply Chain Programme can support manufacturing SMEs in mitigating risks and make contingency plans.
The recent issues across the planet seem to be more disastrous than the previous reported issues. The recent Corona virus reported in China and the subsequent effect into the wider population only heightens the fears that following on from SARS, Ebola and Bird flu or any other infectious disease that may affect the human race, normal life is unduly affected.
As Humans become ever more transient and international travel is so common it should be no surprise that the likelihood of a serious infection spreading through countries will come as no surprise. Add to this the issue of natural (or even as a result of mankind) disasters, we have noticed tsunami and Australian wild fires, mud slides, earthquakes, rising sea levels and erupting volcanoes producing no fly zones due to ash clouds, and more closer to home almost annual flooding of many towns and villages. To further exasperate this we have always the issue of terrorism and the many issues that can cause to the global population and the restrictions on movement of people and cargo across borders.
Immediate to the current supply chain is the flooding in UK, Coronavirus and a wider issue of Brexit, Already to the UK manufacturing industry we are experiencing comments through news channels or indeed directly from companies that the supply of goods from far east is starting to raise concern in UK as some parts of industrialised China still has not returned to full output. The recent spread of Coronavirus has now also been reported to have shut down two large manufacturing supply centers in Italy (Milan and Modeno) and South Korea is also placing restrictions on movement of people affecting daily life, floods in certain parts of the UK may have a direct affect (although smaller) on the manufacturing industry, adding to this the uncertainty of the Trade Agreement with EU as we look to exit the transition period on 31st December 2020 , without any clear direction for imports or indeed exports from the UK to Europe at present.
It is clear that through the late 90’s and the 2000’s the far east was the place to go for supply of raw material or goods for manufacturing supply chain, now with wages increasing in China and more and more pressure for a reduced carbon footprint of manufacturers the time has come to try and address the risk to the supply chain for UK manufacturing.
Now is probably not the time to re-shore wholesale but all Manufacturing businesses need to be armed with a “Supply Chain Risk Assessment and a Business Contingency Plan” with a structured ‘Risk Assessment’ of a manufacturers supply chain we should be looking to move a certain percentage of supply back to the UK. Most companies I have been talking to have large portions of supply single sourced in far east and with support and help every manufacturer should be looking to dual source any non-commodity parts (preferably back to the UK) but each company must make the best option available. I also advocate that any second supplier should have the capacity to gain 80% of the available required quantity so that any untold disaster can be easily negated by moving demand to the second supplier. In essence the tools (Supply Chain Risk assessment & Business Contingency Plan) are readily available and companies will find it easy to be able to engage with LCR Supply Chain programme.
If you would like to find out how LCR Supply Chain Programme can help you and support with building resilience, get in touch by registering your interest here.