April 01, 2018

How can Procurement Prepare for Brexit

A recent survey by The Chartered Institute of Procurement and Supply (CIPS Brexit Survey) found that 41% of procurement and supply professionals at UK organizations believe that it is impossible to prepare for Brexit since future trade agreements are currently too uncertain. Yet, 16% say that their businesses are supply chains are fully prepared for Brexit.

One of the ways many organizations are already preparing for Brexit is by performing a risk analysis. Some professionals are also exploring onshoring, identifying alternative suppliers within the UK, and investigating reshoring (looking for suppliers outside the European Union). Others are working on strengthening relationships with existing European suppliers.

Here is a short list of some ways that procurement professionals can get a head start in preparing for Brexit:

  • Perform a risk analysis and develop a risk strategy
  • Audit and map the supply chain to the lowest tier and look at the risk of indirect spend as well as direct
  • Review contracts, assess EU dependencies, and identify alternative suppliers where necessary
  • Create models around potential tariff rates and effects, also exploring the impact of increased border controls on logistical operations
  • Ensure collaboration across the company, working with marketing and sales on 2019 forecasts and developing consistent messages for suppliers and clients
  • Take the opportunity to create value by assuring customers that there is a plan in place and procurement is in control of this risk
  • Create internal frameworks to use when Brexit happens
  • Ensure adequate cash flow for VAT and additional inventory