Building supply chain resilience is top of mind – but execution lags behind

With supply chains now in a constant state of disruption, building resilience has become increasingly important. Yet SCALA research underlines a key reality: execution is easier said than done. Chris Clowes, executive director at the firm, explains why and outlines what is needed to achieve long-term resilience.

Supply chain leaders have always dealt with disruption, but what was once occasional has now become constant. Whether that’s geopolitical conflict, trade disruption, cyber risk, or extreme weather, the question for businesses is how well prepared they are when disruption arrives.

That is the backdrop to SCALA’s latest research report, ‘The Resilience Gap’. Based on a survey of senior supply chain leaders from organisations with a combined turnover of more than £8 billion, the report examines how resilient supply chains really are in practice, not just in principle.

The findings show that while most businesses understand the need for resilience, there remains a stark gap between understanding the risk and being ready to respond. Just a third (33%) of businesses say they have already implemented the strategies needed to respond effectively to disruption, with the majority (52%) only partway there, and 14% have not yet started at all.

Resilience Breaks Down Under Pressure

The report shows that readiness becomes more uneven when supply chains are tested against specific risks.

More than half (57%) of businesses say they could not continue sales order processing or purchasing if their main system failed, highlighting how dependent operations have become on digital continuity. The data also exposes vulnerabilities linked to natural disasters, war, and political instability.

That said, there are signs lessons have been learned, with many forward-thinking organisations putting measures in place to strengthen resilience. Nearly one in five (19%) respondents said they felt very prepared for a pandemic, suggesting some businesses can adapt to and withstand major disruption when the right contingency plans are in place.

Dependency creates exposure

One of the clearest themes in the report is the risk created by geographical concentration of facilities. For many businesses, manufacturing remains heavily centred on China, Europe, and the UK, with limited diversification beyond these regions.

Warehousing shows a similar pattern, with a significant proportion (38%) of respondents operating a single UK warehouse, and many (43%) claiming no other site could fulfil dispatches if their primary warehouse went out of action.

In many cases, supply chains have been built for efficiency and cost control, but concentrated networks leave less room to manoeuvre when disruption hits. If production is tied to a small number of regions, or stock and fulfilment are dependent on a limited warehouse footprint, the operational and financial impact of disruption can escalate quickly.

This is also why the nearshoring versus offshoring debate needs to be considered under a more practical lens. Nearshoring can improve responsiveness and reduce lead times, but it can also bring higher costs and capacity constraints. Offshoring still offers scale, cost advantages, and access to specialist capability, but it carries greater exposure to geopolitical and logistical shocks.

For many businesses, the answer is likely to be a more balanced model that spreads risk without losing sight of commercial reality.

Customer concentration matters too

The report also highlights that businesses should be looking at both demand and supply dependencies when assessing resilience.

Nearly half (47%) of businesses surveyed generate more than half of their sales from their top three customers. Therefore, if disruption impacts specific customers, causing them to pull their orders, the commercial consequences can quickly become disastrous.

This serves as an important reminder that resilience planning needs to go beyond suppliers and sourcing. It also has to reflect how exposed a business may be if a key customer relationship comes under pressure at the wrong moment.

From awareness to action

Most supply chain leaders know that disruption is, paradoxically, now a permanent feature of the landscape; the challenge is turning that awareness into practical capability. That means looking hard at the full risk picture across suppliers, systems, warehousing, transport, and customer concentration. It also means challenging assumptions before real-world events do it for you.

The organisations that close the gap between intent and action will be in a much stronger position to withstand disruption and protect performance over the long term.

About the author: Chris Clowes is Executive Director at SCALA, a supply chain and logistics consultancy firm.