More SMEs are considering strengthening domestic supply chains

More small and medium enterprises (SMEs) are being advised to strengthen their domestic supply chains in the UK, following the Brexit vote.

The vote resulted in many SMEs choosing a “wait and see approach” to logistics, due to the unsettled atmosphere it created.

However, many businesses are considering transferring assets to the UK, with 32% of supplier looking to replace EU suppliers with UK ones, according to a report released by CIPS.

“There may be an opportunity for some component manufacturers, particularly those serving the UK’s automotive industry, to de-risk their supply chains by encouraging supply partners to set up operations in Britain,” said Caroline Milton, Partner and Manufacturing Sector Specialist at Menzies LLP.

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“Recent moves by some of the larger OEMs, such as Nissan, to strengthen their UK-based supply chains could encourage them to behave similarly.”

“For small and medium-sized businesses however, taking such decisions can be complex and involve a high level of supply chain collaboration.”

“For example, a trusted supplier based in Poland may lack the funds to transfer operations to the UK and require some assurance of order volumes based on reliable business forecasts.”

“Instead of moving operations lock, stock and barrel, suppliers could set up smaller satellite operations in the UK to store goods or perform some post-production finishing.”