By 2026, just over half (53%) of UK companies intend to buy most key items from regional suppliers, up from only a quarter (24%) today. Even more UK-based organisations (73%) plan to produce and sell most of their products in the same region by 2026, almost doubling from 40% today.
This shift towards greater regionalisation and reshoring is a trend being observed across Europe more broadly. In Germany and Italy, for example, just over half of organisations – 54% and 53% respectively – also intend to buy most key items from regional suppliers by 2026. French producers have even higher ambitions, with 91% planning to produce and sell most of their products in the same region by 2026, over doubling from 44% today.
Nonetheless, all three countries trail behind the US, where half already buy, produce and sell within the same region. By 2026, 82% of US companies intend to buy most key items from regional suppliers and 91% plan to produce and sell most of their products in the same region.
Disruptive events have surged in recent years, from the pandemic, geopolitical shifts and extreme weather to technology breakthroughs and material and talent shortages. Few businesses sustained their resilience and long-term growth amid the turbulence:
- In 2021 and 2022, companies missed out on £1.35 trillion ($1.6 trillion) in additional annual revenues because their engineering, supply, production or operations were disrupted.
- At the same time, the 25% most resilient companies achieved 3.6% higher annual revenues than the 25% most vulnerable companies.
Stephane Crosnier, global supply chain resiliency lead for Accenture, said: “Organisations from every corner of the globe have had to deal with a seemingly relentless stream of ‘once in a lifetime’ disruptive events over the past few years. This forced companies to quickly apply a patchwork of short-term fixes to their complex global production and supply networks – which kept the lights on but hasn’t positioned them well for long-term growth in most cases.
"Now is the time to strategically redesign them for multi-sourcing, without creating unwieldy silos or new bottlenecks, and make them more transparent and agile with data and AI to drive sustained resiliency. Identifying key vulnerabilities in companies’ current operations and extended supply chain through improved visibility and simulation is key.”
According to the report, regional sourcing and production are important to becoming less vulnerable to disruption, but not enough to reach sustained resiliency. Companies must also increase their digital maturity. They need to invest in data, AI and solutions like digital twins.
Having more mature capabilities in these areas helps companies build reconfigurable supply chains and autonomous production. These capabilities also enable more dynamic, sustainable product development and support decentralised, real-time decision-making at the frontlines of operations.
On average, UK companies are currently investing nearly £1bn to digitise, automate and relocate supply and production facilities, which is expected to increase to nearly triple to £2.4bn ($2.9bn) in 2026, according to the report.
Maddie Walker, UK, Ireland and Africa lead for Accenture Industry X (Digital Engineering, Manufacturing and Capital Programmes), said: “UK companies have faced a persistently challenging economic environment for the past year, with spiraling inflation and the economy teetering on the edge of recession. However, it’s positive to see that despite this many are prioritising investment in building resiliency – recognising that it is an opportunity for growth, not just a strategy for survival.
"Solutions like digital twins and technologies like automation, robotics and generative AI can help companies adapt faster to sudden changes and take data-driven, real-time actions.”
Sustained resiliency is still a distant prospect for many companies. As part of the research, Accenture developed a model to measure engineering, supply, production and operations resiliency on a 0-100 scale. On average, companies achieved a score of only 56.
The report recommends three areas companies should focus on to increase their resiliency:
- Visibility. Companies should make supply chains and production processes more predictable and autonomous. For example, smart end-to-end control towers monitor processes, generate alerts and analyse different scenarios in real time to detect and correct issues early on. Today, only 11% have near real-time alerting; 78% of businesses need at least a week to fully understand the impact.
- Resiliency in design. Moving activities earlier in the development process allows companies to get products, processes and ways of working right the first time so that the production process is more resilient and sustainable. For example, digital twins – digital replicas of physical production facilities down to individual assembly lines and machines – allow product designers and engineers to identify and troubleshoot potential prototype issues or defects and iterate the design before production begins.
- New ways of working. Businesses should upskill and reskill the workforce in data, AI and other digital technologies so they can use predictive and visualisation tools to make data-driven decisions at the frontlines of business – for example, it’s creating the skills and the talent to move from machine operators to autonomous production engineers. Today, only 17% of companies already have such a multi-skilled, digitally literate workforce; 68% plan to have one by 2026.
The “Resiliency in the making” research is based on a survey conducted January – March 2023 among 1,230 senior executives across engineering, production, supply chain and operations.
