Supply Chain Ripples in the Pond

The AstraZeneca Alderley Park facility operations are expected to close by 2016. The research and development activities of the company there are migrating south, along with many job opportunities. It has been moving towards this for some time. As the Warrington Chamber of Commerce noted ‘the changes at AstraZeneca will have an impact on the Cheshire/Warrington economy far beyond the employees and direct suppliers’.  Supply chains can have many tiers. These are layers of suppliers working right from the initial extraction of raw materials to the delivery of the final product, sometimes operating globally. Swathes of suppliers may also be used to provide services which are not directly involved in the product, but in the general operations of the company too. These activities and the financial transactions which go with them lead a ‘multiplier effect’, where an initial spend leads to layers of further spending. We need some big spenders to create big transaction waves, otherwise we can lose tiers of suppliers and communities can suffer. Warrington has some large projects coming through which will help to fill the regional void in Port Warrington and Omega. We just need to make sure that more are coming than are going. Entrepreneurs and politicians need to work together on this.

Lawrence Bellamy is a Professor at the Warrington School of Management, University of Chester