Moving suppliers without breaking supply

More UK businesses are moving supply closer to home. Santander's survey of 1,007 UK firms with turnover above £1m, carried out by YouGov in autumn 2025, found 55% taking steps to do so, up from 50% a year earlier, and 20% that had already relocated some supply nearer to the UK. Among the roughly 40% that rely on China for part of their supply chain, 54% were looking to move away or diversify.

Other routes are opening too. The UK-India Comprehensive Economic and Trade Agreement came into force on 15 July 2026, with lower tariffs for qualifying goods. And supply risk hasn't eased: S&P Global's UK manufacturing PMI in mid-2026 pointed to supply chain problems linked to the Middle East conflict.

The commercial case for a move is usually made in the tender: a better price, a shorter lead time, lower risk. The value is lost, or kept, in the six to twelve months that follow. This is a working checklist for that period.

Before you sign

Get the specification right. Many supplier moves stumble because the incumbent was quietly compensating for a drawing that was out of date, a tolerance nobody wrote down or a packing method that only their warehouse knew. Walk the incumbent's process, if you still can, and write down what they actually do.

Check who owns what. Tooling, moulds, artwork, test fixtures and software often sit at the incumbent's site. Confirm title in the contract, and agree how and when they will be released before you give notice.

Work out the landed cost, not the unit price. Freight, duty, packaging, inspection, payment terms and the stock you'll need to carry for a longer lead time all belong in the comparison. If the new source is in a different country, check the rules of origin. Preferential tariffs under a trade agreement are not automatic. For the UK-India deal, UK businesses need a one-time registration with HMRC's origin registration service to access preferential rates.

Agree the qualification plan with the new supplier in writing: samples, first article inspection, trial runs, the acceptance criteria and who signs off. Put dates on it.

The overlap period

This is where the cash goes. You will almost always need a bridge: stock built ahead from the incumbent to cover the new supplier's ramp-up and any failed first batches.

An illustrative example. A product line consumes £50,000 of goods a week at cost. The new supplier needs six weeks to qualify and four more to reach full volume, and you want two weeks of cover for a failed batch. That is up to twelve weeks of bridge stock, around £600,000 of cash, for several months. Budget it, agree who pays for any that is left over, and track it as a project cost, not as an inventory overrun someone discovers later.

Timing the notice to the incumbent is a judgement call. Too early, and service and goodwill drift while you still depend on them. Too late, and you breach notice terms or lose the chance to build the bridge. Most contracts give you a notice period; use it to agree a run-out schedule with the incumbent, line by line, with final order dates.

Keep the incumbent whole where you can. Pay on time, honour the last orders and be straightforward about why you're moving. You may need them again, and other suppliers are watching how you behave.

Cutover

Move by product family, not all at once. Start with lines that are high volume and low complexity, where problems show quickly and can be contained. Keep the more complex or customer-critical lines on the incumbent until the new supplier has proved itself.

Hold a weekly transition review with procurement, quality, planning and finance in the room. One page: what has moved, bridge stock remaining in weeks, open quality issues, and the cash committed. The person chairing it should have the authority to slow the move down. Slowing down costs a few weeks. A failed cutover can cost customers.

After the move

Run the new supplier under closer management for at least two quarters. Measure on-time-in-full, quality and responsiveness against what was promised in the tender. Run down the bridge stock deliberately and release the cash. Then check the savings against the business case using actual landed cost, and report the result to the board, even when it disappoints. The next transition will be better planned for it.

BankStreet Partners runs supplier transitions for mid-sized businesses, and our free UK-India Landed Cost Comparator helps with the first comparison.