Risk mitigation, adaptability and sectoral resilience: Buffering in automotive supply chains prior & post disruption

Abstract

Disruptions result from the interconnected nature of modern supply chains and this highlights the importance of understanding supply chain resilience. In terms of trade, the UK is substantially reliant on the European market. The UK's automotive sector was particularly vulnerable during the aftermath of Brexit and few studies have sought to explore the resilience of the sector prior and post disruption. With survey data from 2015, we sought to fill this gap by exploring buffering, which is a particular resilience practice, across 140 firms operating at different tiers within the West Midlands (UK) automotive sector. Furthermore, qualitative data from eight interviews conducted in 2024 is used to understand risk mitigation concerns and issues prevalent in the sector. Multinomial logistic regressions were used to examine whether buffering practices vary at different supply chain tiers within the automotive sector prior disruption. Our findings indicate that upstream firms were more likely to spread their risk by holding a pool of alternative suppliers (i.e. supplier buffering), whereas downstream firms were partially more likely to hold excess goods and products (i.e. stock buffering). Findings from the 2024 interviews highlight the aftermath of Brexit impacted on trade and these implications are still being felt amongst downstream firms, especially in the case of securing and buffering stock. Our contributions involve a Contingency Theory perspective in the case of risk mitigation prior disruption and we provide a speculative narrative to our contingency related findings using Transaction Cost Economics.