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The implications of Brexit on procurement capabilities

What is Brexit?

Intelligent Supply Base Management The Implications of Brexit.“Brexit” – the exiting from the European Union of the United Kingdom and Northern Ireleand. Since the referendum of 2016, the UK government has been wrestling with two key dynamics:

  1. How to create a united approach domestically to leaving the EU and
  2. negotiating the best deal possible for the UK in its dealings with the EU following the leave date which is currently scheduled for May 2019.

Whilst this is a highly politicised issue, there are some very real issues that companies need to get to grips with. There is much to do in terms of creating robust and sustainable supply bases as we go through the next 12-18 months of uncertainty. Furthermore there is a significant amount of supply re-alignment to do once we know the outcome of the specific negotiations. These negotiations are likely to influence business behaviours and activities in areas such as importing, exporting, labour management as well as the commercial and regulatory environment.

Is it all bad news?

Intelligent Supply Base Management The Implications of Brexit.Much is being made of the risks that could be created by an unsatisfactory conclusion to the negotiations between the UK and the EU. The UK has been in the EU for 40 years and so untangling long-term trading arrangements is obviously complex. Our view is that waiting for the outcome and/or doing nothing in the interim period is unadvisable. We feel that organisations should be working with their critical suppliers to build resilience and workable short to mid term supply agreements in three ways:

  1. To ensure business continuity as we go through what will undoubtedly be a period of great uncertainty and unease by reassuring suppliers and working with them. Remember their world has become as uncertain as yours.
  2. To ensure appropriate supply options going forward such as consideration of supply location, cost impacts of tariff changes, availability of labour.
  3. Making sure you review all the opportunities that could arise.

It’s easy to focus on the potential risk and negativity of Brexit. However, as with all significant change events, there will be new opportunities for those capable of realizing them.

Why Avidus?

We think we can help you because we:

  1. understand cross sector business challenges and how suppliers can help.
  2. are not trying to add more boxes on your org chart, we want the ones you’ve already got to be capable of doing more.
  3. can bring supplier management skills and enabling technologies to your business.
  4. are project value focused not day-rate fee distracted, so we too are cost effective.

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