What is BREXIT going to result in? As uncertain as we all are, there are ways to ensure you are ready to manage your supply chain after Britain leaves the European Union in June 2019.
On Tuesday 15th January 2019, the U.K. took a very big step nearer towards a No or Hard Deal Brexit. Never before in legislative history has a U.K. Prime Minister and their Cabinet been voted against by such as margin as the BREXIT deal. During this landmark defeat and some hours after, Sterling (GBP), the U.K currency actually went up which was the opposite to what all the analysts stated would happen and then through the following 24 hours which included and vote of no confidence launched by the opposing Labour Party towards the current administration the pound held firm moving up only 0.1 percent. However, the U.K. currency has weakened about 14 percent since the result in June 2016.
Irrespective of your views, beliefs and position what most can agree on is that there is much uncertainty, speculation, hype and scaremongering and that no one really knows the full extent of the impact, which means there is no go-to source to provide corporates with any level of assurance post June 2019.
So what does this mean? Well in short it means that you are left with the burden of conducting some discrete, specific and targeted analysis of your business model and the underpinning supply chain to establish, beyond just the economic ramifications, how impacted your company will be by BREXIT, however hard or soft the deal becomes or even if there’s no deal at all.
A recent study conducted by the Chartered Institute for Procurement and Supply (CIPS) found that:
- Nearly 63% of EU businesses expect to move their supply chain out of the UK.
- 40% of UK businesses are looking to replace their EU suppliers.
- 25% of large UK businesses have spent over £100,000 preparing their supply chains for Brexit.
- 20% of UK businesses with EU suppliers have found it difficult to secure contracts that run after March 2019.
Ok, so you are not in the 75% that haven’t spent in excess of £100k or you’re in the 25% that have but haven’t focused on your Supply Chain. You do need to do something about it but what? In our opinion, your supply chain is the best place for you to start and where the most immediate impact on business may be felt.
If you want to read more about how you can ensure minimum risk to your supply chain as we near Brexit, please download our handout from our resources page.