Rising costs, transportation delays and global uncertainties are shining a light on the weaknesses in UK supply chains, revealing vulnerabilities that could disrupt operations and undermine manufacturing resilience. The question is whether manufacturers are equipped to respond, and how digital adoption could help close the gap. Steve Levy, VP of Enterprise Architecture for the distribution industry at Infor.
Eighty-two per cent of industrial manufacturing organisations agree that success in their sector will depend on adopting new technologies to build greater resilience and agility. By embracing new tools like predictive analytics, advanced demand forecasting, and real-time tracking, manufacturers can spot potential risks much sooner and react more quickly when disruptions threaten their supply chains.
Key takeaways
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UK supply chains are increasingly fragile, with rising costs, transport delays, and global uncertainty exposing serious vulnerabilities that threaten manufacturing resilience and competitiveness.
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Digital readiness is now a major differentiator, as only 24.5% of manufacturers feel prepared for disruptions, and there is a 43% productivity gap between the most and least digitally advanced firms.
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Lack of real-time data and outdated, fragmented systems significantly weaken supply chains, leading to poor visibility, slow responses, and operational blind spots that endanger long-term stability.
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AI – especially agentic AI – is emerging as a critical tool, enabling predictive forecasting, automated risk response, maintenance alerts, and intelligent decision-making that shift manufacturers from reactive to proactive.
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Digital adopters are already outperforming, gaining faster decision cycles, stronger risk mitigation, and higher customer trust through AI forecasting, cloud ERP, process mining, and digital twins—showcasing the competitive advantage of modernised supply chain systems.
FAQs
- Why are UK supply chains currently so vulnerable?
- Why is digital adoption so important for manufacturing resilience?
- What is causing the digital readiness gap across manufacturers?
- How can AI improve supply chain operations?
- What technologies are helping manufacturers strengthen their supply chains today?
However, only 24.5% of manufacturers feel adequately prepared to prevent supply chain disruptions. This gap between organisations that are digitally advanced and those that are lagging behind threatens long-term competitiveness and operational stability. This is evident throughout the manufacturing sector with a 43% productivity gap between the most and least digitally advanced manufacturers. Highlighting the tangible impact of digital adoption on competitiveness.
Fragile systems, rising risks
Supply chain vulnerabilities are becoming increasingly noticeable as a result of material shortages, rising costs and inefficient transportation, all of which are made worse by environmental issues and unpredictability in the world.
Twenty-two per cent of executives cited supply chain disruptions as a significant risk to the global economy marking the highest share since December 2022, according to McKinsey. This underscores that supply chain challenges are becoming an increasingly prominent concern for businesses worldwide. Fragilities in the supply chain process not only lead to revenue losses but also increase operational costs and make long-term planning more difficult.
Many businesses continue to rely on fragmented, outdated systems that limit their ability to adapt and respond effectively. Gartner reported that only 29% of supply chain organisations have developed at least three of the key five competitive characteristics needed for future readiness. This reveals a crucial gap in agility, resilience, and technology which are all important for supply chains to survive in today’s fast-changing landscape.
A major factor behind these issues is the lack of real-time data, which results in poor visibility, delayed responses, and operational blind spots. While this may appear to be a technical or IT problem, it poses a much deeper threat to business continuity. Supply chains form the backbone of every business, whether in manufacturing, retail or automotive, and pressures on them now threaten to destabilise that foundation, endangering performance, growth and resilience.
Data itself is not enough. Businesses must be able to act quickly and intelligently, turning real-time insights into meaningful decisions. Many manufacturers struggle to adjust production or reroute orders when inventory shortages appear, and machine failure warnings often go unheeded without integrated maintenance processes, resulting in unexpected downtime and costly delays. Agentic AI can bridge this gap by proactively translating insights into action, adjusting production schedules, rerouting inventory, and triggering maintenance before problems escalate.
By leveraging pre-programmed Industry Process Catalogues and playbooks, these AI agents can deliver immediate, measurable results without months of training. Integrating AI into supply chain operations allows manufacturers to move from reactive firefighting to proactive resilience, reducing downtime, improving efficiency, and maximising return on investment in an increasingly volatile market.
In manufacturing, it is essential to ensure any AI adopted is as specific as possible meaning it can be tailored to not only your industry but your specific needs as an organisation. By leveraging your historical data and sector playbooks, these AI agents enable faster, smarter decisions, reduce waste, and strengthen competitiveness.
Without the ability to translate data into action, businesses risk remaining stuck in reactive mode, constantly firefighting rather than planning for long-term success.
Digital winners are redefining resilience
Early adopters of digitalisation are gaining real-time visibility and agility across their supply chains. They benefit from faster decision-making, stronger risk mitigation, and increased customer trust, thanks to more resilient and connected supply chain systems. Success will depend on the use and adoptability of new technologies. For supply chains, this means the difference between staying operational during disruption or falling behind.
When it comes to transforming these systems, several technologies are leading the way. AI forecasting enables businesses to analyse historical data and market trends to improve inventory planning, reduce waste, and avoid both overstocking and stockouts. Cloud-based ERP systems are replacing outdated, disconnected legacy platforms, centralising data across departments such as procurement, production, and logistics. This improves coordination, reduces delays, and enables real-time information sharing with suppliers and partners.
For example, Oberg Industries, a global contract manufacturer specialising in precision machinery and stamped metal components, faced significant challenges with limited visibility into key business processes. Without fast and accurate insights, they struggled with bottlenecks that delayed sales order processing and returns management. These delays risked the continued shipment of defective components, impacting both efficiency and customer satisfaction.
By adopting process mining, they achieved a 50% faster sales order processing time, improving lead times and boosting revenue through automation. Returns processing became 75% faster, cutting costs tied to defective components by automating workflows and reducing errors.
Beyond the improvements seen at Oberg Industries, other manufacturers are leveraging technologies such as digital twins, which allow companies to create virtual models of their supply chains or specific processes. These models help simulate “what if” scenarios, such as supplier disruptions or sudden demand spikes, allowing businesses to test decisions before implementing them. As a result, risk management and operational planning improve significantly.
Now or never
Disruption will only continue to accelerate, and the biggest risk manufacturing organisations face today is inaction. Strengthening supply chain systems is the only way to begin closing the already widening digital gap. Those organisations that choose to act now will emerge stronger, more agile, and better prepared for the future. They will be able to operate their supply chains reliably, no matter what disruptions come their way.
By strengthening supply chain agility, visibility and integration, manufacturers can move beyond simply reacting to disruption and start gaining a real competitive edge. Those that take action now will be better equipped to adapt to change, recover more quickly from unexpected events and meet evolving customer expectations with confidence. As complexity continues to grow, it will be the manufacturers with flexible, data-driven supply chains that are best positioned to lead.
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