By ET Bureau - July 20, 2023 2 Mins Read
3.3 million (60%) small and medium-sized enterprises (SMEs) have experienced supply chain delays in the last year, losing an average of £625,000 in income each as a result, according to new research from Aldermore’s SME Growth Index.
One in four SMEs who have experienced supply chain delays in the last year have seen a financial impact on their business (27%). The delays have led to increased costs (40%), delays to existing projects (36%) and difficulties in securing new deals (23%).
Industries that are reliant on materials were particularly vulnerable to these challenges, with SMEs in the wholesale, retail and franchising sectors, estimating they had lost five-times more than the average business.
More than half (65%) of businesses are vulnerable to supply chain shocks due to lack of awareness – over a third of decision-makers (36%) are only aware of their direct business customers and suppliers, and 29% admit to having no knowledge of them at all.
However, a significant number of businesses are taking action as a result. 58% of businesses have undergone a full supply chain audit or put contingency plans in place to minimise future disruption and plan ahead should problems arise.
Tim Boag, group managing director of Business Finance at Aldermore, comments: “Supply chain issues can impede the growth of SMEs, limiting their ability to reliably deliver for their customers on existing projects or pursue new opportunities.
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“With delays still making headlines and impacting profits, it’s important for every business leader to consider if there are any vulnerabilities that expose them. This can be done through a supply chain audit or the development of a contingency plan. This will help build stronger relationships and clearer communications so businesses can react quickly should they be notified of changes that might impact their supply chains.
“With the current backdrop of economic uncertainty, SMEs need to take steps to protect themselves against unwanted shocks.”
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