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Brexit rivalling customer pressure as supply chain challenge

06 June 2016

Senior supply chain leaders say the threat of Brexit and price and service pressure from major customers are the chief challenges in 2016.

A poll of industry professionals by consulting firm SCALA also found that more than a third (37.5%) are considering delaying supply chain investment decisions in response.

SCALA managing director John Perry said the economy faces a range of emerging threats and that executives must find the right balance between tactical and strategic responses.

“It seems clear that Brexit is a real strategic threat to the existing supply chains of British business, but that the chief day-to-day issue facing executives are customer service level demands and pressure on pricing.”

SCALA will be using the results of the survey to help kick-start discussion at the company’s Annual Logistics Debate at Coombe Abbey, Warwickshire, on July 7.

The debate topic reflects the wide-ranging challenges facing industry in 2016, with senior professionals from the likes of John Lewis, BT Supply Chain, General Mills and Collect+ being asked to consider: ‘What should be the Supply Chain priorities for businesses over the next 12 months?’

The event is supported by industry organisations the Chartered Institute of Logistics and Transport and the Food Storage and Distribution Federation, and Toyota Manual Handling is the headline sponsor. 


Survey Results

Please Rate in Importance Your Supply Chain Challenges

Very / Extremely Important

Price and Service Pressure from Customers




Price Deflation


Regulation & Taxation


Omni-Channel Operations


Living Wage



Please Rate in Importance Your Supply Chain Priorities

Very / Extremely Important

Focus on Reducing Operating Costs


Improve Supply Chain Planning Capabilities


Develop Supply Chain Collaboration Initiatives


Innovate to Provide Industry Leadership


Implement Productivity Technology


Delay Investment Decisions



The SCALA poll found that customer pressure on price and service was ranked as being the biggest single challenge by 90.3% of respondents, with Brexit ranked as very or extremely important by 80.6%.

Results were much more mixed when considering other issues currently facing the supply chain sector, such as market dynamics, the introduction of the Living Wage and the growth of omni-channel operations.

Respondents also highlighted the risks currently surrounding global trade, with the increased threat of protectionism and the prospect of a falling pound in relation to the dollar both cited as key challenges. 

SCALA asked more than 3,000 senior industry contacts for their views and found 94% of respondents were aiming to prioritise reducing operating costs in response to current market conditions.

Mr Perry commented: “British businesses are operating in a financially constrained environment and industry leaders need to think innovatively if they are to continue to develop their operations.”

The SCALA survey did find some cause for optimism - executives stated their supply chain priorities in 2016 will include improving supply chain planning (90.6%) and developing collaboration initiatives (87.5%).

Mr Perry added: “It’s very encouraging that senior leaders have identified these areas for improvement. We are certainly trying to drive innovation in the sector by creating demand-driven supply chains and working with our customers to form logistics alliances to improve efficiency.”