Small businesses are the backbone of the UK economy. They account for 99% of all businesses in the country and employ 60% of private-sector workers. For these businesses to thrive, it is essential that they have a clear understanding of supply chain risks and how to mitigate them. This article will provide an overview of some of the most pressing supply chain risks currently facing UK small businesses, as well as tips on how to plan for and respond to unforeseen disruptions.
Supply chain risks, such as the COVID-19 pandemic, Brexit, and now the Ukraine-Russia crisis have had a significant impact on UK small businesses. The pandemic has caused widespread supply chain disruptions, with many businesses having to source alternative suppliers or find new ways to get their products to market. Meanwhile, Brexit has created uncertainty around tariffs, customs procedures and the supply of goods from EU countries. The UK government has provided some guidance on how to prepare for and respond to these risks, but small businesses need to be proactive to protect their supply chains. Regarding the Ukraine-Russia crisis, sanctions imposed on Russia are adding a new strain to supply chains across the globe as resources such as oil, gas, and other products is significantly limited. Dun & Bradstreet data reveals that at least 374,000 businesses worldwide rely on Russian suppliers. Supply chains are hard-pressed to come up with a full-proof plan to navigate the increasingly complex global trade landscape.
There are several things that small businesses can do to mitigate supply chain risks. Firstly, they should build strong relationships with suppliers and other partners. This will help to ensure that communication is clear and that any problems can be quickly resolved. Secondly, businesses should have contingency plans in place for disruptions. This could involve stockpiling key supplies, sourcing alternative suppliers, or using different transportation routes. Finally, small businesses should make sure that their employees are trained in supply chain management and understand the importance of supply chain resilience to protect their business.
It is essential to understand the risks and have a plan in place to mitigate them. Supply chain risks are ever-changing, and UK small businesses need to be prepared for anything. By following these tips, they can ensure that their supply chains are resilient and able to weather any storm.
Supply chain finance is a tool that can be used to help accelerate supply chain risk mitigation with newfound flexibility in the supply chain. By unlocking working capital and preserving cash flow, small businesses focus on what's important and protect their supply chains from any future disruptions with peace of mind.
These past two years have shown us that supply chain risk is a reality that UK small businesses need to be prepared for, for the foreseeable future. While the combination of the pandemic, Brexit, and the Russia-Ukraine crisis has caused unprecedented and widespread disruption, there are things that businesses can do to mitigate supply chain risk. By building strong relationships with suppliers, having contingency plans in place, and training employees in supply chain management, small businesses can protect their supply chains from any future disruptions.
What supply chain risks are you most concerned about? What steps have you taken to mitigate supply chain risk in your business? Let us know in the comments below.