Article by B4 Audit and Accountancy Expert, James Pitt, Partner
James Cowper Kreston

Global supply chain disruption remains an urgent issue, reaching its highest levels since 2023 in recent months.

Disruptions are becoming more frequent, driven by a combination of natural events, operational challenges and, more recently, geopolitical tensions. Among businesses that have experienced disruption, nearly half report a direct link to the ongoing conflict in the Middle East, highlighting the growing influence of geopolitical risk on day-to-day operations.

How supply chain pressures are affecting businesses

The Global Supply Chain Pressure Index highlights the real economic impact of these challenges on UK businesses. While many supply chains continue to function, they remain under significant strain, leading to:

• Stock delays
• Higher transport, insurance and supplier costs
• Unfulfilled orders, leading to strained customer relationships
• More time spent managing risks instead of focusing on growth

These disruptions can reduce profit margins and damage trust, with other issues such as cashflow pressures, missed growth opportunities and customer delays surfacing later.

The growing strain on working capital

Working capital is often used strategically to optimise inventory and build resilience. However, the impact of supply chain disruption on working capital is frequently underestimated by business owners.

Issues such as supplier delays and labour shortages can result in:

• Slower conversion of stock into revenue
• Increased reliance on borrowing or overdrafts
• Reduced flexibility when conditions change quickly

Effective working capital management is crucial to ensure smooth business operations. For growing or manufacturing led businesses, ineffective working capital management can quietly undermine resilience if not addressed early.

From resilience to readiness

Planning is essential for businesses who experience supply chain disruptions. Without it, businesses risk reacting to disruption rather than managing it effectively.

With rising volatility and geopolitical tensions, readiness is critical. Businesses can strengthen their position by:

• Mapping risk more clearly across supply chains, beyond first tier suppliers
• Stress testing working capital under longer lead time or higher cost scenarios
• Reviewing supplier concentration and contingency arrangements
• Strengthening governance and operational risk controls

A renewed role for assurance and insight

As supply chains become less predictable, audit, assurance and risk advisory functions play an increasingly important role. Independent insight helps boards understand not only where disruption has occurred, but where future risk may arise.

At James Cowper Kreston, we support growing owner-managed businesses in strengthening working capital and improving risk visibility. By combining practical insight with strategic planning, we help organisations across the UK and internationally build operational resilience, enabling leaders to stay in control, even in uncertain conditions.