The threat of a wine shortage in the UK due to a strike at one of the UK’s leading bottling plants is another warning to businesses to take steps in-order to better mitigate against disruptions in the supply chain, says management consultancy Inverto, part of Boston Consulting.
Inverto adds that businesses should also promote transparency in their supply chains and promote closer collaboration with their suppliers to mitigate these types of situations. Businesses will also need to strengthen more actively manage their lead times and stock levels in order to add resilience.
The strike impacts Encirc’s bottling facility in Bristol, which bottles 300 million litres of wine a year. Encirc has around 40% of the market share of the UK’s beverage bottling market and supplies 18 of the UK’s 20 wine brands.
Organisations need to ensure that they work in close collaboration with suppliers to monitor these types of situations to ensure they can best mitigate for any disruption. By actively monitoring and managing their supply chains, businesses can better manage their lead times and stock levels. In addition to these steps, supply chain diversification can also be a helpful lever to success.
Katharina Erfort, Principal at management consultancy Inverto, says: “This kind of scenario is a reminder why companies need to manage their supply chain and form contingency plans for critical categories. Businesses can start by ensuring that they have at least two suppliers to lessen the risk of supply shortages.”
“Having a single factory deal with a very large share of the market can deliver economies of scale but it also makes a supply chain very vulnerable to these kinds of surprises.”
“The trend for businesses over the last thirty years has been to consolidate to a single supplier. Added to this is the increased complexity that modern supply chains operate under. This complexity, as well as the succession of crises we have seen from Covid to the Red Sea, has shown how difficult it can be to anticipate risks.”
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