The End of Just-in-Time Orthodoxy

For three decades, UK manufacturers and retailers pursued supply chain efficiency with near-religious devotion. Just-in-time inventory, single-source supplier strategies, and extended global supply networks delivered impressive cost savings — until they didn't.

The period from 2020 to 2025 exposed the fragility of optimised-for-cost supply chains with brutal clarity. The COVID-19 pandemic, the Suez Canal blockage, semiconductor shortages, Brexit border friction, and escalating geopolitical tensions between the West and China have collectively destroyed the assumption that global supply chains would function smoothly.

According to the CBI, 73% of UK manufacturers have made significant changes to their supply chain strategy since 2020, with resilience overtaking cost as the primary design criterion for the first time in modern British industrial history.

Nearshoring and Reshoring Trends

The most visible strategic response has been a shift toward nearshoring — moving production and sourcing closer to the UK market. Eastern Europe, Turkey, and North Africa have been primary beneficiaries, offering lower costs than the UK while avoiding the extended lead times and geopolitical risks associated with Asian sourcing.

Full reshoring to the UK remains limited by cost considerations, but it has occurred in strategic sectors. Pharmaceutical companies, defence contractors, and some food manufacturers have brought critical production back to UK facilities, often supported by government incentives through the Advanced Manufacturing Plan.

The economics of nearshoring have been helped by rising Asian labour costs, increasing shipping expenses, and the hidden costs of managing complex global supply networks — quality control, intellectual property risk, communication overhead, and the working capital tied up in long supply pipelines.

Multi-Sourcing and Strategic Redundancy

UK companies are also moving away from single-source strategies toward deliberate multi-sourcing. Where a company might previously have awarded 100% of a component contract to one supplier for maximum volume discount, leading companies now split contracts between two or three suppliers in different geographic regions.

This approach sacrifices some unit cost efficiency for supply security. Rolls-Royce, JCB, and BAE Systems have been public advocates of multi-sourcing strategies, arguing that the modest cost premium is insurance against the catastrophic costs of supply disruption — factory shutdowns, lost revenue, and customer defections.

Technology is enabling more sophisticated multi-sourcing strategies. Digital supply chain platforms allow companies to switch between suppliers more rapidly than was previously possible, creating dynamic resilience that adapts to changing conditions rather than relying on static contingency plans.

The Digital Supply Chain

Investment in supply chain technology has accelerated dramatically among UK companies. Digital twins — virtual models of entire supply chains — allow companies to simulate disruptions and test response strategies before events occur. Predictive analytics identify potential bottlenecks weeks or months in advance, providing time for preventive action.

Blockchain technology is gaining traction for supply chain transparency, particularly in sectors where provenance matters — food, pharmaceuticals, and luxury goods. UK retailers including Sainsbury's and M&S have piloted blockchain-based traceability systems that provide end-to-end visibility of product journeys from source to shelf.

Strategic Implications for UK Business

The shift from efficiency-first to resilience-first supply chain design has profound strategic implications. Costs will be higher — McKinsey estimates that building genuine supply chain resilience adds 3-5% to total costs. This must be reflected in pricing strategies, margin expectations, and investor communications.

However, companies that invest in resilient supply chains gain competitive advantages during disruptions — maintaining product availability when competitors cannot. In sectors where switching costs are low, supply continuity during a crisis can permanently shift market share. The companies that thrive in the coming decade will be those that treat supply chain resilience as a strategic investment rather than a cost to be minimised.