Large UK enterprises in denial with many expecting current supply chain disruption to be done with by year-end

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Nearly two-thirds (63%) of senior decision-makers working for large enterprises across the UK say the business disruption they are currently facing around lack of access to, or availability of raw materials or component parts in the supply chain will be over by the end of 2022.

Over half (55%) say the same about skills shortages in their supply chain, while 57% even believe that the disruption they are confronting around increased regulatory burdens, such as Brexit trade friction, will be over by Christmas this year. These are among the findings of new research commissioned by IFS, the global cloud enterprise software company.

The findings from the survey also bring to light the stop-gap measures many organisations are relying on to mitigate ongoing supply chain disruption. These include keeping more stock on hand, as reported by 76% of survey respondents, increasing supplier numbers (75%) or sourcing a higher proportion of materials/products from domestic suppliers (76%). While these actions are helping to keep supply chain cogs moving in an uncertain landscape, combined, they are likely to adversely impact efficiency and agility in the long-term by adding complexity.

Maggie Slowik, Global Industry Director, IFS, says: “We are seeing many large enterprises across the UK still putting their heads in the sand and refusing to be realistic about how long the current supply chain disruption will last, and the response needed to mitigate the challenges being faced. In particular, our survey highlights that the majority of respondents believe that current disruption will be over by the end of this year – with Brexit one of the areas they are most bullish about.”

Slowik continues: “Whilst nobody can fault a desire for a positive outlook after a tough couple of years, the truth is that the impact of supply chain disruption is, in many cases, here for the long haul, and not only that, disruptive events are bound to happen at an accelerated pace in the future. Rather than focusing on short-term fixes like stock hoarding and increased vendor networks, businesses should be taking a longer-term perspective and concentrating on bolstering their supply chain management capabilities.”

Positively, the survey does show signs of greater emphasis being placed on enhancing supply chain management, with this being seen by 36% of these UK respondents as being among the top three priorities their organisation is trying to solve through investment in technology.

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