The power of a strong supply chain
20 September 2021
20 September 2021
by Paul Lewis, Operations Director at Universal Wolf – leaders in complex metal fabrication.
A strong supply chain is the foundation of a strong company. Without it, your business could struggle. But how do you build a resilient supply chain? And how do you balance the search for value with building solid relationships? In this blog post, we’ll explore the importance of strong supply chains – and what to consider when building one.
When building a supply chain, resilience is often determined by the reliability of the businesses in your chain. Finding resilient, trustworthy partners is one way to ensure your supply chain is ready to deal with inevitable market shocks.
A case in point is the recent rise in demand for steel. Structural steel prices recorded double-digit inflation in 2021 as supplies struggled to meet demand. Recent data released by the Department for Business, Energy & Industrial Strategy (BEIS) showed the price of fabricated structural steel increased by 13.5 percent.
The strong demand for steel has had a knock-on effect on price. This has left many construction and manufacturing companies in a difficult position. Do they pass on the expense? Or do they swallow up the additional cost? Do they stick by the quote? Or raise it and risk damaging the relationship? Large business partners may be able to absorb the cost, but SMEs could struggle. It often comes down to the relationship that you build with your suppliers. A strong, reliable partner may not just absorb the cost, but also be able to suggest alternatives to expensive steel.
Steel is just one example. Diversity also plays a role in supply chain integrity. A modern supply chain needs to ensure it has a dependable network of suppliers. Not every supply chain has to be global but having diverse partners can provide added resilience. For example, Universal Wolf’s ability to work with partners in multiple locations means we have a resilience to shocks to the local economy.
The UK economy has recently been tested by the dual forces of the global COVID-19 pandemic and Brexit. In PwC’s recent Global Manufacturing Pulse Survey, flexibility in business partners was highlighted as one of six key qualities for manufacturers. The survey showed that UK businesses want efficient and adaptable partners. Over the next few years, efficiency and adaptability will become even more important in a digital-first, post-pandemic world.
The cost of failing to adapt can be significant. Companies that rely too heavily on one or two key suppliers could find their reputation – and even their profits – negatively affected if their supplier fails to adapt. Supply chain disruptions cost businesses $184 million annually, according to recent research. And a failure in one link in the chain can have devastating effects on customer relationships. For instance, if a supplier for an essential product lets you down, it can have a knock-on effect on your reputation.
At Universal Wolf, we’re fortunate to be part of a Tharsus Group, a global business with £81 million in revenue and over 450 employees. This means that, as well as being experts in metal fabrication, we have a degree of resilience that enables us to deal with changes to the market and prioritise strong customer relationships in a way that smaller independent firms may not be able to.
The most resilient supply chains of the future will be those that can provide what is demanded and expected without disruption or delay. A strong supply chain is based on solid relationships. That is why at Universal Wolf, we always put our partners first. As both suppliers and buyers, we understand the importance of strong supply chains from all angles. And our Power of the Pack approach means we pride ourselves on developing relationship that are built to last. Because an approach based on trust and mutual respect is worth its weight in steel. And with every strong relationship you build, you will be taking a big step towards ensuring your business thrives.
By Paul Lewis, Operations Director at Universal Wolf. Paul is a qualified Mechanical Engineer and joined us with a background in lean manufacturing, gained through roles within Oil & Gas, Automotive and Construction. He leads our manufacturing teams in championing systems and processes for operational excellence.