UK businesses are increasingly exposed to supply chain disruption, with nearly half relying on just three customers for more than half of their revenue, warns a new report from SCALA.

The global supply chain and logistics consultancy’s latest report found that 47 per cent of firms have a high level of customer concentration, creating significant commercial risk as volatility in freight and energy markets intensifies tensions in the Middle East.

The study highlights how disruption to shipping routes and energy supplies could have knock-on effects on costs, lead times and service levels.

At the same time, preparedness remains uneven. Only 33 per cent of businesses said they had fully implemented strategies to respond to disruption, while over half are still in the process and 14% have yet to begin.

The report also points to wider structural risks, including manufacturing footprints concentrated in a limited number of regions such as China, Europe and the UK.

It is understood this, combined with reliance on a small number of major customers, creates what SCALA describes as “single points of failure” across supply chains.

“Many supply chains were built over time to optimise cost and service in a more stable operating environment,” SCALA executive director Chris Clowes.

“But in today’s conditions, heavy dependence on a small number of manufacturing regions or a handful of major customers can leave less headroom when disruption, like that which we face today, hits.

“Our advice to organisations looking to boost their resilience is to identify where the business has too few options, then build practical alternatives into sourcing, transport and the customer portfolio – before the next shock tests the system.”

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