The UK logistics networks could be operating with too little headroom to withstand the rising pressure on the food system, according to new findings from SCALA Consulting.
The report, which is based on a survey of senior supply chain leaders, found that over half of firms hold less than a quarter contingency or safety stock, while 71% could increase their UK warehouse capacity by no more than 25%. A further 43% said that no other site could fulfil dispatches if their primary warehouse became unavailable, and only a third had fully implemented the necessary response strategies, with 52% having partially done so and 14% yet to begin altogether.
While individual businesses have unique requirements that call for tailored supply chain and logistics networks, together, the challenges of limited stock, restricted capacity and a lack of tested alternatives can fuse - leaving logistics networks less able to absorb disruption caused by extreme weather, labour shortages, transport problems or geopolitical events.
The survey results have come at a time where extreme heat in the UK could lead to poor harvests, shortages and higher prices. Farming, retail, food manufacturing and hospitality leaders have all recently called for a national food resilience plan, warning that secure and affordable food supplies can no longer be taken for granted. This pressure could be further compounded by higher business rates for large logistics properties, encouraging businesses to shift to more efficient rather than resilient supply chains.
Amid this context, SCALA is calling for warehousing and transport to be treated as critical national infrastructure, advising businesses to implement robust contingency plans with alternative sourcing options identified where possible.
Chris Clowes, executive director at SCALA, said that their research suggests that many businesses are entering the next major disruption underprepared, primarily due to a focus on efficiency over resilience within their logistics networks. He advised businesses to identify the suppliers, facilities and processes that could interrupt supply, establish back-up arrangements, and test how quickly stock, people and vehicles could be redirected.