There’s no escaping it– the Brexit deadline is approaching. With headlines awash with opinions on a hard Brexit and no deal scenarios, the uncertainty of the future of trading is looming over businesses.
Over the course of Brexit, international supply chains have become fragile– seeing rising costs and unavoidable delays. EU businesses who rely on UK suppliers have looked toward alternatives which can offer more stability and predictability to their operational flow, and this has ultimately resulted in vital business being taken away from UK-based organisations. However, it has also meant that UK businesses have looked inwardly for their supply needs, forging relationships between domestic manufacturer and consumer.
Understandably, Brexit has caused a big shake-up in European supply chains, considering the amount of trade between the U.K. and EU, and vice versa, with 43% of UK exports previously going out to EU countries and 54% of UK imports originating from the EU.
Big cracks have already appeared in supplier relationships as pressures mount, with one of the most recent case studies including the DHL/KFC debacle that saw 750 store closures due to inability to sell. And with the Business Leader reported that “inefficient supply chains [and miscommunications] are costing UK business £1.5 billion per annum”, supply chain risks are increasingly becoming a significant issue for businesses as we head towards this new post-Brexit world.
But preparation is one of the sizeable obstacles facing companies when it comes to establishing a stronger supply chain, and doubts around how to approach the process are only confusing matters. How do you prepare for the unknown? Should you wait until the final decisions, when the t’s are crossed and the i’s are dotted? Will you have enough time to put your ducks in a row?
Image credit:John Morgan under CC 2.0 , image cropped for purposes.
Contrary to popular belief, delaying the process will lead to further issues down the line as you rush to structure a perfected supply chain. In the unpredictable business climate we currently face, securing your supply chain provides the predictability and stability your business needs, both now and for its future growth.
If supplier relationship management is not at the top of your agenda, it really should be. Brexit is presenting businesses with the need, or you could class it as the opportunity, to streamline its supply chains. But in order to do so, you need to take control of your supplier relationships and make some big decisions. Do you abandon ship or stick with what you know?
This is one of the major dilemmas.
Switching suppliers or arranging better deals with existing ones can be multifaceted, costly and lengthy negotiations, and this can often mean that companies struggle on their own to find the alternatives that are best for their business, never mind the added pressure of a Brexit timer running down the seconds.
Could a more advantageous arrangement be made with your current supplier– even if they reside in the EU? Is your relationship strong enough to get past the hurdles a new EU/UK deal will present? If not, could your connection be strengthened? Would you simply get a better deal with a new supplier, maybe one based in the UK?
Optimising your supply chain with the help of procurement specialists will strengthen it whilst improving your supplier relationship management will fuel its success.
Here’s how you go about it…