Search

In Short Supply

Updated: 1 day ago

Recently being thrown under a new government, the UK has already witnessed a whole host of impactful changes from tax cuts, to freezing energy bills. Now with new PM Liz Truss in power, the question on everyone's mind is how and whether any new parliamentary changes will honestly seek to benefit businesses.


Closely following the turbulence of both Brexit and the Covid-19 pandemic, the recent energy and cost of living crisis, combined with the cocktail of already lethal complexities that the UK is trying to mitigate, continues to assault the country and prevent things from returning to a pre-pandemic state.


2022 has been a whirlwind so far and shows no sign of slowing down. In this article, Supply Chain Network (SCN) Ltd, examines just what the UK has witnessed so far, and predicts – within this period of economic uncertainty – just how much more resilience is required for the remainder of the year, and onwards, to survive.



Supply and Demand

It is no secret that disruption to supply chains, since the summer of 2021, has been experienced both in the UK and globally. Recurring problems have included delivery delays, price increases, lack of available inventory and a lack of fuel.


According to the Institute for Government, it is short-sighted to blame these sporadic supply chain changes on the pandemic and Brexit alone. The complexity of these issues is associated more deeply with obstacles evolving over the years, including shortages of CO2 and fuel, as well as other more complicated supply difficulties, in addition to the impact of the reliability of suppliers in the FMCG and grocery sectors, have all shaped the landscape of trade that is accessible today.


Office for National Statistics (ONS) data reveals exactly how far-reaching these shortages of supply have been experienced. Figures show that between 20th and 31st October 2021, in Great Britain during the height of the fuel crisis, 1 in 6 adults suffered a lack of essential food items. While shortages in fuel were short-lived and had subsided by the start of 2022 an additional 37% were reported to have struggled to get fuel themselves between 6th and 17th October 2021.



Future of Freight

In response to the supply chain crisis, earlier this year the UK Government launched a campaign to recruit millions of people to join the logistics industry. The plans were implemented to strengthen the supply chain workforce, whilst also adhering to building a resilient and environmentally sustainable haulier sector.


Named the Future of Freight, this pioneering plan aimed to build on the unprecedented action taken by the UK Government during the pandemic whilst eCommerce and online shopping experienced rapid growth, caused by new global supply chain challenges.


The future vision for this plan is to establish a strategy that enables industry and government to form a close working relationship, and ultimately build the foundation for successfully delivering a world-class seamless flow of freight across the UK’s roads, railways, seas, skies and canals.



Previous Responses to Disruption

Various explanations have been provided by the UK Government for why supply chain disruption has occurred, and the Government has similarly issued several new policies to address these problems, many of which are focused on addressing the HGV driver shortage.


In short, business responses to these new measures have been received with mixed feelings. The Institute for Government revealed that on one hand the changes have been welcomed, as industry groups agreed with additional visas for lorry drivers. However, larger bodies such as the British Chamber of Commerce argued action was taken too late, and that measures such as visas proved to be useful to only a small proportion of people. Similarly criticised was the proposal to extend HGV driving hours, which was an idea deemed as not only potentially dangerous but also made the job appear unattractive and counterproductive.


However, in the short-term, according to the director-general of food, farming and bio-security at Defra, these policies – specifically issuing temporary visas for HGV drivers – helped to temporarily alleviate invoking panic buying in headlines about the possibility of food shortages. Overall, thankfully, many of these implantations were temporary and better, existing policies, such as the energy price cap for domestic consumers – have succeeded in alleviating the impact of what can be a challenging supply chain.



The Falling Pound and the Cost of Living

Most recently the new cause for concern is the drastic fall of the value of the pound. As a result of the UK's biggest tax cuts in 50 years, this blow coincides with the already excruciating cost of living crisis which is currently afflicting the UK.


As the cost of food and fossil fuels continues to rise, this fall in the value of the pound against the dollar and euro will sadly also serve to increase the price of goods and services imported into the UK from overseas. Incurring higher costs to buy things such as food, raw materials, or parts from abroad, companies in the UK may begin to pass on the higher prices to their customers.


However, some UK businesses could get a boost from this fall in the value of the pound. This diminished GBP value makes the British firms cheaper and therefore a competitive investment for international buyers, such as those from the USA. Already, bids are being received for fashion chains with recent the purchase of Ted Baker for £211m by an American company that owns Forever 21 and Juicy Couture.



Prepare your facility for the future with the SCN team

As many changes across all sectors continue to develop, the supply chain industry is also constantly adapting as best it can to much-needed - yet as of recently unprecedented - technology and labour shifts. Experts in all aspects of warehouse and network design, The SCN team understands the importance of remaining competitive in what is a very dynamic industry and the critical data analysis required to achieve this.


Specialists in Warehouse Design and Fit-Out, the SCN team can help you reach your facility’s fulfilment potential in 2022 and beyond. Visit www.scnuk.com to learn about the work that we do and to ensure you are ready, and future-proof your business plans and warehouse design. We work with our clients and ask questions about their supply chain at all levels. Email: admin@scnuk.com or call: 01529 455340


*All images sourced from Pexels

13 views0 comments

Recent Posts

See All