In recent years, managing supply chains has been a challenge for most companies, but especially for those in the British Isles. Brexit, COVID-19, wars in Europe, and rapid inflation have led companies to quickly reassess how and where they source supplies from. Increasingly, this is prompting businesses to seek solutions closer to home. 

Software Advice U.K.’s 2024 Supply Chain Plans Survey, which polled 200 supply chain and logistics professionals, reveals 57% of respondents already have suppliers in or near the UK, whilst 69% say they plan to source all or most of their goods from the UK or neighboring countries in 2024. This shift has also been reflected by a 3.6% decrease in national imports between March 2023 and 2024.

Nearshoring is a fast-developing trend for the U.K.’s supply-focused businesses for a number of reasons. Britain isn’t alone in nearshoring its supply chains. This trend affects U.S. and EU-based companies, too. However, the U.K. has a few unique challenges that make this goal a particular priority. 

Brexit Border Checks Are Biting 

This year has been a tricky one for those receiving supplies from the EU. The long-promised Brexit border checks on imports are now a reality, having been delayed for many years. This is leading to longer wait times for goods to arrive, and more uncertainty that deliveries will be able to pass through. This is being compounded as IT system failures, and unfamiliarity with the new checks on items take their toll.   

Delays caused by the new border checks are raising costs on the supply side. Additionally, these uncertainties are slowing down the arrival of critical goods needed to replenish just-in-time (JIT) inventories, and putting perishable goods at risk of spoilage before being sold. This is leading some to rethink their options and choose suppliers in Britain itself, where possible.

Companies Want to Lower Supply Chain Risk More Broadly

The world has faced many unforeseen circumstances over the last five years, and this has had a major impact on supply chains. Countries such as China have benefited heavily from offshoring trends over the last 30 years. However, this tendency has gradually been reversing, and there are a variety of reasons for this. 

The COVID-19 shutdown led to bottlenecks in worldwide supply chains, causing major disruptions for businesses and for companies to reassess longer-distance supply options. These concerns have only intensified as attacks on shipping in the Red Sea, increasing trade competition, and tariffs set by China, the EU, and the US take their toll on business confidence.

Nearshoring Offers Better Control Over Products and Production

Another reason supply chains are getting shorter is companies' desire to have better control and more flexibility over product modifications and production processes. For example, when nearshoring, a manufacturer wanting to make changes to a product to meet changing customer demands can benefit from simpler channels of communication and lead times, in order to allow changes to be made quicker. Moving goods sources and supply chains closer to home can help businesses scale to demand and adapt to changes in their buyer’s market.

Customer dynamics are ever-changing and can alter quickly. Being prepared to face this is crucial. Nearshoring offers a big advantage in this capacity by providing faster solutions and shorter delivery times that adapt to customer needs.

The Desire For Solid Sustainability Credentials

Nearshoring also gives companies a chance to enhance their sustainability credentials. This is increasingly compelling for supply chain businesses, with a Gartner report highlighting that circular economy activities are a vital concern for 75% of supply chain leaders.  

Moving supply chains closer to home can help drive better sustainability practices in a few ways. Firstly, shorter supply chains can reduce the energy needed to transport goods between their source and destination. Also, by locating to the U.K. or a nearby country, professionals can ensure their goods are supplied and manufactured following more reliable environmental protection legislation.  

There are also many green energy, sustainability, and circular economy programs being pursued in the U.K. and the EU at present, which companies can use to improve their supply chain sustainability practices.

Three Ways That Companies Can Fortify Their Supply Chains

Secure supply chains are the aim for almost any company, and nearshoring can help businesses get closer towards that goal. However, in these times of uncertainty and increasing complexity with imported goods, U.K. businesses have a number of directions they can take to ensure their supply chains remain reliable.

Embrace available technology. Research and Development (R&D) is an evergreen area of focus for supply chains, and new technology offers businesses a key solution for keeping their supply chain operations stable.  

At the moment, organizations are focusing their technology acquisitions to support their logistics in several ways. The 2024 supply chain survey shows that most supply chain professionals surveyed (47%) are planning to target investment in artificial intelligence, with many others prioritizing spending on advanced cybersecurity (42%) and advanced data analytics (41%) tech.  

Gartner also identifies a major priority for supply chain companies: moving beyond real-time analytics to real-time decision execution. It is important to build a culture that can proactively act when discrepancies are noticed in supply chain data, taking advantage of existing real-time business intelligence (BI) data.

Shore up safety stock supply. Delays in the supply chain are a factor businesses should be ready for, whether it is localized or covers long distances. Having good reserves of inventory safety stock is therefore an important step toward safeguarding against interruptions in supplies. 

To adapt to the current challenges businesses might need to tweak a few processes. In practice, it could be necessary to reassess warehousing capacity, or plan contingency suppliers ahead of time. The British Business Bank highlights the importance of deploying cloud solutions to enhance efficiency in reallocating production facilities.

Invest in training and development of supply-focused staff. Talent is becoming trickier to source for supply chain-focused companies. More than a quarter (27%) of the professionals surveyed say the availability of skilled workers is one of the biggest concerns for supply chains in 2024.  

Whilst moving supply chains from further afield locations like Asia to the EU or Britain can help increase opportunities to grow talent closer to home, the U.K. still faces some unique challenges. For example, European workers may now require visas, which can decrease the appeal of working with a British company, and complicate the hiring process overall. 

Investing in training and development of supply chain-focused roles can help avoid these issues in the longer term. Supply chain professionals said they were most likely to struggle to hire or retain talent in logistics, data, and quality control. These would therefore represent good starting points for businesses to focus on. 

Supply chains are never simple, but in recent years they’ve proven extra complex for British businesses. Planning around disruption is now especially crucial and businesses can achieve that by focusing primarily on being prepared for it.    

David Jani is a U.K. Analyst at Software Advice.