University of Warwick: The three key actions to secure supply chain resilience after Brexit and COVID

• In a year with two major supply chain disruptions – Brexit and COVID, manufacturers’ supply chain resilience has never been more important

• Three practical solutions to ensure resilience have been identified by a consortium including WMG, University of Warwick

• If manufacturers take action now and follow the guidance, their supply chain could be more resilient to any other disruptions that may occur

Brexit and COVID were two major disruptions to manufacturers’ supply chains, however, a consortium of academic and industry partners including WMG, University of Warwick has identified key ways to build supply chain resilience.

A report by researchers from WMG, University of Warwick in conjunction with Argon & Co, Tata Consumer Products Ltd and Pinsent Masons has highlighted three practical solutions for supply chain resilience:

1. Risk management – Identifying risks throughout the supply chain to make wise decisions

2. Buffer management – Utilising inventory and capacity in the supply chain to react in a timely manner

3. Contract management – Increasing contracting agility to build a close tie with business partners

Supply chains have been under a significant amount of stress over the last year with Brexit and COVID-19, with three in four organisations likely to experience disruptions. Therefore, their resilience is key to recovery.

The complexity of supply chains means that disruptions can happen at any time. When COVID-19 hit the world in early 2020 firms had little time to prepare, but the report found that those that were able to adapt, supply flexibility and buffer manage were able to deal with the disruption more effectively.Caption: Types of supply chain resilient strategies pre-disruption, during disruption and post-disruption. Credit: WMG, University of Warwick

Huge uncertainties lie ahead when it comes to Brexit, however with time to prepare, the industries can be ready for a number of different scenarios. Research has found the use of proactive practices such as planning and visibility and collaboration were effective in initial Brexit preparation.

In order to improve supply chain resilience it’s essential that there is an understanding of what exactly supply chain resilience is and planning ahead for it. Assessing just how resilient a manufacturer is by identifying vulnerable areas is the first step in preventing disruption.

This then leads onto managing buffers, for example optimising inventory stocks and production capacity, and with that being cooperative. A coordinated approach to supply chain planning enables great visibility and mitigates risks.

Professor Jan Godsell, from WMG, University of Warwick comments:
“Supply chain risks will always be unavoidable, however the quick succession of Brexit and COVID has rung a bell for suppliers to be prepared for any situation that may arise. Areas of preparation include identifying risk throughout the supply chain to inform better decisions, managing buffers to respond faster and adopting flexible contracting enables greater collaboration.

“We encourage all firms to consider these solutions, so their supply chain is more resilient and that ultimately they’ll be more sustainable in the long term.”

Clare Francis, partner at Pinsent Masons LLP adds:

“The last year has seen supply chains disrupted on an unparalleled scale. As businesses have moved from the initial challenges of ensuring supplies in the short-term they now need to focus on rebuilding resilient supply chains for the future. There are a number of areas that businesses must consider when doing this but they have an opportunity to learn from the lessons of Covid-19 and implement more resilient and better supply chains for the future.”