Hard Yaka and Future-Proofing: Surviving the Supply Chain Squeeze

Let’s look at the numbers first. Up in the North East, businesses have been quietly riding out a frankly brutal economic climate, chalking up a genuine drop in insolvency activity over the last year. According to the latest annual deep-dive from R3, backed by CreditSafe data, the region saw a 9.3% fall in insolvencies for 2025 – dropping from 863 cases in 2024 to 783. Start-ups are even showing a bit of a pulse, edging up 3.3% to hit 17,455. In fact, if you look at the whole of the UK, the North East is holding its own remarkably well, beaten only by Yorkshire and Humber’s 9.9% decline and Greater London’s 11% drop. But don’t let the regional optimism fool you; zoom out, and the national picture is still incredibly fragile. Insolvency levels remain brutally high compared to five years ago, and for many sectors, the operating environment is effectively a tightrope walk.

Construction is still taking the absolute brunt of it. It racked up the highest number of insolvency cases nationwide in 2025 at 4,584, even with a modest 6% dip from the year prior. The sector is being absolutely hammered by the perfect storm: spiralling material costs, chronically delayed payments, a glaring skills shortage, and rock-bottom investor confidence. You can see the fallout locally in the North East. Cramlington’s Merit went into administration late in the year, wiping out about 340 jobs – though the directors have managed to salvage the assets to cobble together a new outfit. Over in Gateshead, Union Electric Steel shut shop completely, taking another 156 jobs with it. It’s a similar story on the high street. Wholesale and retail logged 4,124 casualties, and the hospitality sector wasn’t far behind at 3,831. It’s the classic squeeze: hard-pressed consumers are keeping their wallets shut, and businesses simply can’t absorb or pass on these soaring operational costs anymore.

Which brings us to the elephant in the room: how on earth do companies build a buffer against this kind of relentless material and supply chain pressure? This is where the conversation is shifting from basic survival tactics to structural overhauls, particularly the circular economy. We usually hear about circularity as a green pipe dream, heavily steeped in ecological virtue signalling. But realistically, it’s fast becoming Europe’s most viable industrial strategy. Stripped of the jargon, it’s about decoupling your balance sheet from volatile primary raw materials and the geopolitical chaos that dictates their prices. But turning that abstract macroeconomic theory into a hard-nosed business case is where most companies stumble.

Take the energy sector, for instance. Resilience and affordable power are the absolute bedrock of the economy right now. The industry is desperately trying to manage the green transition without just swapping an old addiction to fossil fuels for a new vulnerability to rare earth metals and solar components. To figure out if circularity actually works on the ground, EnBW recently teamed up with Deloitte to run a microscope over their photovoltaic (PV) operations. They weren’t looking for greenwashing material; they wanted to know exactly which circular measures a single energy company could pull off today that actually make commercial sense.

What they found is a fascinating reality check. On one hand, a single corporate player only has so much runway. Some circular strategies just aren’t feasible yet due to industry bottlenecks, or they sit way outside a company’s immediate supply chain influence. But dig a bit deeper, and the study identified a solid raft of immediate, cost-neutral “no regret” moves. We’re talking about pragmatic steps like actively flogging PV modules that get damaged during construction to specialist refurbishment outfits, rather than just writing them off. In the operational phase, it means tweaking procurement to deliberately source components that are actually repairable.

The real meat, however, lies in the long game. The EnBW study highlights massive future commercial potential for the PV sector if they get their house in order now. That means building rock-solid data profiles on recycling rates and the exact provenance of materials, and getting ahead of the curve for the massive wave of decommissioning and repowering that’s coming down the track. Deloitte and EnBW built their methodology on a rigorous three-step framework: scouting potential measures, running a brutal qualitative check against technical and market realities, and finally, crunching the quantitative business case using actual operational data from EnBW solar parks. It’s a blueprint intentionally designed to be scalable across entirely different industries.