As freight and energy markets contend with renewed uncertainty driven by escalating tensions in the Middle East, new research from global supply chains and logistics consultancy SCALA highlights a growing vulnerability among UK businesses: an over-reliance on too few supply chain options.
Drawing on a survey of senior supply chain leaders, SCALA’s latest report, The Resilience Gap: Assessing the Risks and Readiness of Global Supply Chains, reveals that ‘single points of failure’ persist across production locations, transport routes and customer concentration. The findings come at a time when heightened risks to shipping lanes and energy flows are increasing the likelihood of disruption, rerouting and cost volatility, with direct consequences for lead times and service performance.
The research shows that manufacturing footprints remain heavily concentrated in China, Europe and the UK. ‘Other South East Asia’, including Taiwan and Vietnam, is emerging as a secondary hub, but respondents reported limited expansion beyond these regions. At the same time, customer concentration presents a parallel challenge: nearly half (47%) of businesses generate more than half of their sales from just their top three customers.
Progress towards improving supply chain resilience is also uneven. Only 33% of businesses say they have fully implemented the strategies needed to respond effectively to disruption. A further 52% have begun to implement measures but remain only partially prepared, while 14% have yet to take any meaningful action.
Together, these findings highlight two interconnected pressure points. A narrow geographic footprint increases exposure to geopolitical tensions, trade restrictions, climate-related disruptions and transport bottlenecks. Meanwhile, reliance on a small number of key customers amplifies the commercial impact when disruption occurs.
Chris Clowes, executive director at SCALA, said: “Many supply chains were built over time to optimise cost and service in a more stable operating environment. But in today’s conditions, heavy dependence on a small number of manufacturing regions or a handful of major customers can leave less headroom when disruption, like that which we face today, hits.
“Our advice to organisations looking to boost their resilience is to identify where the business has too few options, then build practical alternatives into sourcing, transport and the customer portfolio – before the next shock tests the system.”
The report emphasises the importance of addressing ‘single points of failure’ through a more strategic and proactive approach. This includes developing a clearer understanding of risk across the entire supply chain, from suppliers and transport routes to systems and customer dependencies. It also highlights the need to expand sourcing strategies across multiple regions, establish secondary manufacturing or assembly capabilities, and rebalance operational footprints to reduce bottlenecks. In parallel, businesses are encouraged to diversify their customer base while maintaining strong service levels for key accounts.
With global supply chains facing ongoing disruption risks, the findings underline a clear message: resilience is no longer optional. Businesses that fail to broaden their operational and commercial base risk being disproportionately affected when the next shock occurs.
To read the full report, visit: https://www.scalagroup.co.uk/new-scala-report-the-resilience-gap/
