A Breakdown of the Government’s New Critical Imports and Supply Chains Strategy
The Department for Business and Trade has launched a new strategy to safeguard UK supplies of critical goods, this includes medicines, minerals and semiconductors. The critical imports and supply chain strategy has been introduced as a way to ease the impact of supply chain shock. When an unexpected event occurs, it changes the availability of a commodity. This, in turn, affects the price. This can affect supplies, which leads to a negative impact on businesses, consumers, and the economy.
What is Supply Chain Shock?
Supply chain shock is an event that occurs unexpectedly. For example, in 2021, a giant container ship (the Ever Given) blew off course by strong winds and blocked Egypt’s Suez Canal. The Suez Canal is one of the world’s busiest trade routes, with around 50 vessels passing through it daily, accounting for 12% of all global trade. The incident took six days to rectify and held up just over $58 billion of products, resulting in one of the biggest supply chain disruptions in our recent history.
This is one of the many supply chain shocks in recent years.
Others include the global pandemic, Russia’s invasion of Ukraine, the attacks on the Red Sea and the ongoing environmental crisis, to name a few. With so many events affecting the global supply chain, the government has outlined a new strategy which aims to build resilient supply chains and protect critical imports.
The strategy outlines five priorities:
- Making the UK a centre of supply chain excellence
- Removing import barriers to support the UK’s business-friendly environment
- Building the UK’s response to global supply chain shocks
- Adapting to long-term trends
- Expanding collaboration between government, business, and academia
Making the UK a centre of supply chain excellence
The government has developed a strong network of supply chain analysts in the Department for Business and Trade (DBT). By increasing its in-house capabilities, it now has the capacity to understand supply chain risks and issues. This will be utilised in sectors which affect the UK’s essential services, national security, and the economy.
Removing import barriers
By lowering tariffs and non-tariff barriers, UK businesses can source inputs they need easier. This, in turn, supports the effective movement of supply chains. Businesses will also have more flexibility to expand in the UK and abroad.
Building the UK’s response to supply chain shocks
In response to events over the recent years, the government has enhanced its planning to minimise the effects of any future shocks. It has done this by utilising data and analysis to gain insight into potential future risks.
Adapting to long-term trends
Being able to adapt to long-term trends that shape the economy is a priority for the government. Climate change and transformative technologies for example, are important to keep track of to support the flow of supply chains. Although these are more predictable and are slower to affect the global supply chain than supply chain shocks, the government is taking a proactive approach to ensure effective strategies are in place to respond to these trends.
The final priority for the government is to focus on collaboration with UK businesses and supply chain experts. By encouraging the sharing of knowledge, the government plans to support businesses in becoming more resilient in the face of supply chain issues.
This strategy aims to strengthen the UK’s resilience and adaptability to changes in the global supply chain. Minister for Industry and Economic Security Nusrat Ghani said:
“With this strategy, we’re equipping businesses, so they no longer have to rely on unpredictable partners for supplies of the goods that keep our country going. By making supply chains stronger we’re helping make the UK a truly safe and reliable place to do business.”
Access the full details for the Critical Imports and Supply Chains Strategy.
While the strategy is focused on critical imports, the Government plans will benefit all UK supply Chains as data, predictions, and strategic plans from the strategy become available to businesses. The work being done will help to boost the economy and prevent stock-outs that have previously caused spikes in pricing and frustration for consumers, businesses and end-users.
IoSCM are at the heart of the global supply chain, helping businesses advance their capabilities through training, development and industry-expert support. Speak with a Course Advisor today to find out how our professional qualifications can help you. With courses specialising in Ports and Shipping, Logistics, and the other key sectors of the Supply Chain, you can tailor your training to match your individual requirements, those of your team, or your entire business. Call 0800 1422 522 today.