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8 in 10 North West manufacturers experiencing supply difficulties

New research shows that £2 billion of goods are currently awaiting completion at North West manufacturers because of delays, forcing many to ‘near-shore’ or ‘friend-shore’ their supply chains.


In a survey of businesses with more than 10 employees, Barclays found that 67 per cent of North West manufacturers are holding items in their warehouses awaiting completion because raw materials, ingredients or component parts have not yet been delivered from suppliers. On average, this ‘unfinished business’ is worth over £735,000 to each company impacted.

The steel and metals sector is the most severely affected along with the food and drink, plastics and electronics sectors, the report shows.

In total, 78 per cent of North West manufacturers say they are facing supply issues exacerbated by the COVID-19 pandemic, the war in Ukraine and the UK’s exit from the EU – far higher than the nation’s manufacturers as a whole (59 per cent). Around two thirds (68 per cent) of North West manufacturers say their customers are having to wait longer for products as a result.

When asked how they are responding to the challenge, the most common response among North West manufactures was moving their UK suppliers closer to their production plant (46 per cent), followed by increasing their storage capacity (41 per cent). A third said they were ‘near-shoring’ to move their supply chains closer to home and a similar proportion have ‘friend-shored’ by choosing to work with suppliers in countries that have a strong trading relationship with the UK.

Across the nation as a whole, Barclays found that 37 per cent of manufacturers have increased the total number of suppliers they work with to spread their bets.

 

Lee Collinson, Head of Manufacturing, Transport and Logistics for Barclays Corporate Banking, said:

“The British manufacturing sector has faced a perfect storm of challenges this year, with rising costs, the war in Ukraine, labour shortages and ongoing COVID lockdowns in China hitting supply chains hard. As a result, billions of pounds worth of goods are trapped in warehouses unfinished, and this may hit industry turnover in the early part of next year.

“However, manufacturing firms have done what they do best and engineered new solutions to limit the impact of the issues they face. As a result, many businesses will enter the new year with a degree of cautious optimism and confidence.”

 

If you are a Greater Manchester SME facing supply delays, our Manufacturing Advisors are on hand to help you optimise your supply chain and manage inventory effectively. Contact our team today for more information.

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