Topic > Brexit as a catalyst for designing a flexible supply chain

This January marks five years since David Cameron first publicly mentioned renegotiating Britain's position within the European Union. Since then, the British political landscape has changed dramatically. We have seen two general elections, a tough competition for the leadership of the Labor Party, the rise and fall of UKIP and in the meantime the question of Europe has continued to dominate the headlines. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Long political discourse about possible solutions to the problems has delayed progress, culminating in what Michael Barnier, Europe's chief Brexit negotiator, described last month as a "disturbing state of stalemate. Five years later, Britain continues today to operate as an EU member state, under EU jurisdiction and under the trade laws of the EU single market. While this lack of progress is frustrating for many of those involved, the resulting state of limbo represents a significant opportunity for procurement professionals. Understanding how to prepare for Brexit is not about creating a one-off solution, but rather creating an intelligent and dynamic supply chain system that will be adaptable and capable of withstanding any future change time after the post-Brexit status quo. In this sense, Brexit presents a fantastic opportunity to harness the sense of urgency to drive long-overdue progress. The smart professional will use this “crisis mentality” as a value-adding exercise, using Brexit as a catalyst to push procurement issues higher up the business agenda. One of the key threats to supply chains is uncertainty, and with Brexit comes an interesting case of planning uncertainty. Unlike natural disasters or stock market crashes, we have advance warning of impending change. While we do not know the nature of the change, we can and must plan accordingly to equip our supply chains to be robust enough to mitigate any potential outcomes of Brexit. Ironically, this robustness will come from flexibility. Achieving flexibility can be facilitated by focusing on three key areas. First, start with supply chain mapping to understand the end-to-end value chain of your supplier base. This will allow you to understand trade flows and the impact leaving the EU customs union will have on your supply chain. At present, a distinct product or service may be assembled between factories in multiple EU member states, with parts often traveling across borders, often back and forth, as part of the service's production or design process. Mapping your supplier base will allow you to visualize trade flows and understand the real impact that increased tariffs and regulations may have on your suppliers, including predicting the possible outcome of operating under the “worst” conditions of the WTO. Second, after you have mapped your supply chain, invest in designing and developing appropriate risk management strategies and procedures. This could include segmenting the supplier base with Brexit in mind specifically and developing contingency plans if, for example, a supplier increases costs due to tariff increases or, in the worst case scenario, ceases trading with them entirely. the United Kingdom..