By Insider.co.uk

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In the last five years, supply chains have been tested to their limits due to significant economic uncertainty and geopolitical instability, with challenges around supply chains showing no signs of abating.

According to our latest Economic Engine survey of 500 UK mid-market businesses, nearly a third cite supply chain disruption as a top pressure, with 32% of companies in Scotland naming it one of the biggest barriers to growth.

For sectors such as manufacturing, logistics, and engineering, these pain points have a direct impact on productivity, revenue and customer confidence.

Recent years have brought with them sustained disruption to international trade and supply chains. Businesses have faced delayed or cancelled deliveries, rising transport costs, customs clearance challenges and additional tax burdens.

Against this backdrop, mid-market leaders are increasingly looking at ways to strengthen resilience and protect performance, but what practical steps can businesses take?

What issues are impacting the supply chain?

Regulation

The regulatory environment is becoming more complex, exposing businesses to disruption, fines and reputational risk. Legislation now affects companies of all sizes and sectors, making it essential to understand what applies to your operations.

Staying alert to current and upcoming changes helps you stay compliant across your supply chain and prepare for future challenges before they escalate.

Digital transformation

Transformation spans people, systems and processes, yet many businesses struggle with change management and IT integration. Legacy data, multiple platforms and limited planning for testing or project management, often create migration issues.

When rolling out change, consider how it will affect data accuracy, inventory levels and the availability of components or finished goods. Careful preparation helps ensure digital transformation strengthens, rather than disrupts, supply chain performance.

Data challenges

The volume of trade data generated by international supply chains can make it difficult to draw out meaningful insights. Many businesses still rely on spreadsheets, even though more advanced tools are now available.

Investing in analytics platforms, such as dashboards that map goods movements and highlight risks and opportunities, makes it easier to identify patterns, manage risk and share insights across the business.

Tariffs and geopolitical turbulence

In 2025, uncertainty around tariffs and global tensions is reshaping trade and putting sustained pressure on supply chains. Businesses of all sizes that depend on international shipping – whether sourcing raw materials or exporting finished goods – face higher compliance costs and unpredictable customs procedures, driving up expenses across the board.

Geopolitical flashpoints have added further strain. The Red Sea crisis, which began in 2023, forced many carriers to reroute vessels around Africa, increasing transport costs and extending delivery times. On top of this, 2025 has seen a series of high-profile cyber attacks on British and international firms in retail, manufacturing and logistics. These incidents have forced temporary shutdowns at significant cost, underlining the need for continued cyber security investment.

Businesses that monitor developments closely and build flexibility into sourcing and distribution strategies will be better placed to manage disruption and reduce its impact on operations.

Which supply chains are most impacted and what products do they affect?

Electronics and automotive are among the hardest hit, particularly due to tariffs on key components such as semiconductors. Pharmaceutical companies have been working to diversify and nearshore production to lessen reliance on specific international manufacturing hubs, given complex tariffs and regulatory hurdles.

Food supply chains face rising costs driven by higher input prices, disrupted trade routes, labour shortages and inflationary pressure. Retailers, meanwhile, contend with inventory disruption and shifting consumer demand, often struggling to balance stock levels with increasing prices.

The breadth of these challenges shows that supply chain disruption is not confined to large multinationals; it extends to smaller firms across nearly every sector and region.

How can businesses strengthen their supply chains to weather ongoing uncertainty and protect business continuity?

Mid-sized businesses in Scotland are reporting stronger-than-expected performance in 2025, fuelled by greater access to finance and artificial intelligence (AI) adoption, according to our latest Economic Engine research. From a position of strength, if businesses can overcome enduring supply chain challenges, they can protect revenue streams further, while creating scope for growth even in challenging conditions.

There are key steps business can take to turn supply chain disruption into an opportunity to build long-term resilience.

Take a holistic view

Look at your supply chain as a whole rather than as separate functions. Reviewing each stage – from sales and operations planning through to purchasing and procurement – helps identify inefficiencies, strengthen supplier relationships and measure the impact of sustainability initiatives.

Focus on the elements most critical to your business performance. These might include a key component from a single supplier, a raw material used across multiple product lines, or a specialist service.

With greater visibility and reliable data, you can make earlier, better-informed decisions and reduce the risk of future disruption.

Diversify to avoid dependence on singular suppliers

Relying on a single supplier for essential materials or products creates a clear risk. Assess whether those suppliers have robust continuity plans and consider alternatives to spread dependency.

Explore options for diversification, test supplier capacity and weigh up whether reshoring or nearshoring could strengthen resilience.

At the same time, reassess how you trade with overseas partners. Check lead times, terms, export restrictions and any changes to duty or VAT requirements to avoid hidden vulnerabilities.

Use digital tools to improve efficiency

Almost half of Scottish businesses (49%) are already investing in automation, technology or AI to support growth, according to our survey. Beyond driving internal efficiencies, these tools can also deliver significant improvements across the supply chain.

Automating functions, such as forecasting, transport, inventory management and materials ordering, provides a clearer view of end-to-end costs, enabling smarter decisions and greater resilience.

This insight supports smarter purchasing decisions, ensures availability aligns with demand, and strengthens overall supply chain performance.

Manage cash position

Building supply chain resilience often requires both investment and a sharp focus on cash. With uncertainty around interest rates and inflation, many businesses are looking internally to fund improvements by strengthening cash culture, processes and training.

Transparency is key. A detailed understanding of financial and operational performance – from sourcing to final delivery – will highlight where cash is tied up and where gaps exist. This might include supplier negotiation strategies, automation opportunities, or stock levels.

By taking action, you can release working capital, fund improvements and support long-term resilience.

Plan for different demand scenarios

The economic outlook remains uncertain. Scenario planning with suppliers helps prepare for different outcomes and gives your supply chain flexibility to respond quickly.

Work through a range of demand scenarios, assessing the impact on sourcing, production and delivery. By building plans for multiple possibilities, you create the agility to manage disruption and capture opportunities as conditions shift.

Supply chain disruption has posed significant challenges for businesses in recent years, and pressures are set to persist.

However, by planning effectively, staying alert to global developments, and investing in resilience, Scottish organisations can strengthen their supply chains and be better prepared for the future.

Andrew McNamara is a partner at BDO in Scotland