Supply chain risk and resilience

A resilient supply chain is one that has the capacity to withstand instability, to be agile and flexible where necessary and through uncertainty. There are many external and uncontrollable influencing factors that can destabilise a supply chain, everything from economic instability, changes in government, policy or regulation, and some deeply affecting issues like the outbreak of war or natural disasters.

If a supply chain has resilience at its core, it has the opportunity to flex, adapt or respond more quickly to the change it is experiencing for whatever reason. This is why we need to support UK supply chain businesses to recognise the risks of being blindsided by these events and encourage them to adopt new technologies, shift the way they do things and embrace interoperability to survive and thrive in the future.

Supply and demand imbalances

Supply chain disruptions accompanied by sudden surges in demand can catch many businesses off guard. Understanding the flow of data, information, goods and finance is critical to supply chain businesses. A simple fluctuation in one, can have dramatic effects elsewhere and for others in the supply chain ecosystem. How we learn about these fluctuations is critical, but so too is what we capture as being the core metrics that inform our just in time decision making.

As our demand for goods and services increases, so too does the resources needed, and potentially, additional waste. The impact of this increased demand is a recognisable shift in the availability of resources. This is why we are exploring what more intelligent supply and demand sensing systems might look like and encouraging supply chain businesses to expand on the tools and technology they use and prepare them better for the inevitable changes ahead and mitigate against the risks of supply-demand imbalance.

Supply chain sustainability and the move to net zero

With the UK government’s push to get to net zero by 2050, supply chains will come under increasing pressure to act and reduce the emissions they emit. It is widely known that supply chains typically account for 80-97% of a businesses CO2 emissions (scope 3). Though some protocols and methodologies exist for the measurement of scope 3, they are not widely accessible to businesses. Getting access to the right level of data is complex and much shared is either generic, out of date or both. Altogether this situation is also holding back the market for new business models and the opportunity to tackle the route to net zero together.

We believe this presents a significant opportunity for the growing ecosystem of technology companies to improve the quality, availability and visualisation of data so as to open up the market for the creation of new incentives to improve performance and accelerate decarbonisation.

The circular economy

There is a move to start rethinking supply chains as not linear and end-to-end but circular where possible, with returning and remaking built into supply chain processes where suitable. Old models of ‘take-make-dispose’ are losing relevance in the face of supply chain shortages and increasing demand both now and in the future for the goods and materials within our supply chains. Manufacturers are looking to reuse materials and remake goods, using the materials and elements in produced goods again.

There is opportunity to investigate and amplify the current state of play for circular supply chains. Through the implementation of design thinking and action, the increase in use of renewables, and the encouragement of manufacturers to create goods which can be reused and recycled, the Hub will be exploring the circular economy.

End-to-end supply chain visibility

The current state of play for supply chains is increasingly impacted by disruptive events and this is causing far reaching consequences for businesses and consumers. The standard at the moment is that retailers can see their tier one suppliers, but the further down a supply chain that a supplier is, the less likely that the brand or retailer has visibility – and so, any challenges caused by tier 2,3 and 4 suppliers can cause unexpected disruption.

Digital tools and innovations offer a new vision of supply chains. One with visibility across the whole chain, where suppliers, manufacturers and retailers collaborate to build and sustain more dynamic, responsive supply chains. The Hub will be supporting activity in this area, testing, supporting and building fully networked ecosystems.

Finance, working capital and inventory

The money that businesses require to run day-to-day operations has increased markedly during the past few years, due to challenges around sourcing materials and parts leading to higher costs, storing inventory, and other challenges. Supply chain organisations face increasing working capital requirements across logistics, supply chain and inventory as issues beset global markets.

With the growth of cross-border supply chains, increased numbers of transactions, alongside insufficient credit quality for smaller players and the complexities of multidimensional supply chain ecosystems, the Hub has identified key challenges to be overcome in this space.

Last mile logistics

From a warehouse to the door of the consumer, last mile logistics are the final stages in a supply chain. There are challenges around inefficiencies, with multiple stops for those delivering goods with low drop sizes. Rural areas could see miles between delivery points along a route, and in cities, the perils of traffic congestion mean that while there are much more deliveries to be made close to each other, there is constant delay and also potentially increased emissions from idling vehicles.

Finding and taking up efficiencies in last mile logistics, introducing robotics and automation, using collaborative models and IoT solutions will be some of the solutions we’ll be exploring at the Hub.

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