The final countdown to Brexit has begunThought Leadership
In less than a month, the UK is scheduled to leave the European Union, meaning the end of the freedom of movement and goods, and many of the regulations UK and European businesses have come to benefit from over the decades.
Despite this major overhaul to the business environment, organisations are still no closer to understanding what kind of Brexit the UK will end up with. To many organisations Brexit has become a choose-your-own-adventure game, with a ‘Bandersnatch’-like story tree of possible scenarios like deal, no deal or no Brexit.
To date, UK and European businesses have been left almost completely in the dark, with very little indication of how critical factors like tariffs and the movement of goods will be affected.
What happens next is anyone’s guess
What is known is how no deal is expected to impact the UK economy, businesses and their supply chains. The government’s no deal Brexit impact assessment detailed everything that organisations have been warning about – new procedures, new regulations and long delays at UK/EU borders. The report warns that organisations with EU supply chains are set to face increased costs and delays on the movement of goods, highlighting that “as a result of French checks and lack of businesses readiness, the flow of goods through the Short Channel Crossings (Dover and Eurotunnel) could be very significantly reduced for months.”
In addition, tariffs in a no deal scenario will cause an economy-wide adjustment, making it impossible to predict how well businesses will be able to adapt and creating even more uncertainty for industries like manufacturing. The food industry is another likely to face significant impact, yet despite the threat of no deal, “many businesses in the food supply industry are unprepared for a no deal scenario.”
Last minute preparations are ill-advised
Obviously, no deal is the doomsday outcome, but it is just one of many options facing the UK. What’s worrying is the overall lack of business readiness to face up to Brexit. Regardless of the vote to delay leaving the EU, it’s vital businesses ensure they are prepared for the business, regulatory and supply chain environment to literally change overnight on March 29th.
Procurement plays a vital role in helping organisations to get ready for this seismic shift and ensure they are taking steps to adapt regardless of the outcome. Smart procurement technologies give businesses a 360-degree view of their supply chain and provide data-driven insights. This gives the ability to examine how any new tariffs could impact costs and assess suppliers to see where slowdowns might occur. Businesses can then develop contingency measures to respond to immediate disruptions such as supply shortages or friction at the border.
Taking this smart approach to supplier management means decisions can be made based on real-world data, using insights to evaluate risk and make sourcing decisions to ensure the impact on operations can be minimised. Businesses might be facing a juggling act when it comes to Brexit, but the application of smart procurement technologies allows them to operate intelligently – helping make informed decisions on a multitude of issues. This ability to navigate turbulent political waters can mitigate the damage caused by disruption to goods and services as Brexit draws closer.