Achieving Supply Chain Resilience: Implications post Brexit
And so it is! Brexit is now a reality! Last week saw financial markets go frenzy after Britain’s’ exit from the EU post the referendum.
Amidst the chaos and skepticism surrounding the impact of ‘Brexit’ on the businesses and organisations worldwide, it is being touted as highly disruptive and un-settling event of the recent times.
To gauge the sheer magnitude of trade between the UK and the EU, in 2015, the UK exported £223 billion of goods and services to other EU member states (43.7% of total UK exports). The import of goods and services from the EU accounted for £291 billion (53.1% of the total) in 2015 as per the Office for National Statistics (ONS).
While impacts would be clearly multi-fold, from a supply-chain perspective the following are note-worthy:
- Businesses in the UK having suppliers (direct or indirect) in the EU or vice-versa will have to face new regulations and may have to re-assess procurement function. New Regulations could come into play for businesses to comply with, creating a need for organisations to have a better risk assessment and compliance management in place.
- Existing contracts may have to be tweaked or terminated to liaise with the possible new export-import policies and so would the payment terms and conditions.
- Since free movement may no more comply therefore more stringent boundaries on the same can also prove disruptive. Further, the change in cost of labour could affect the supply chain layout for many organisations.
- Being a period of uncertainty, it may impact the investment decisions of global organisations which could affect businesses in UK and beyond as a whole.
To say that the impact is skewed towards the negative shall be a fallacy, as exposure to new markets and reliance on its own economy in the long run may point otherwise.
Nevertheless in this period of uncertainty, organisations need to emphasize on building resilient supply chains and achieving supply chain visibility more than ever before.
Supply chain visibility, more than ever before!
Elements in modern day supply chains are essentially inter-twined and more complex. With situations like ‘Brexit’, it has become inevitable to achieve a greater supply chain visibility so as to be able to map the potential break points in a supply chain to ensure business continuity and limit its vulnerability to the external stimuli.
Technology aided solutions to derive supply chain visibility
Businesses are turning to higher automation to decrease the dependencies on manual labour and high costs involved and a higher reliance on automated tools, disruptive technologies for effective production planning, demand management and so on are proving as key drivers in business transformation for supply chains.
Focus has long shifted from a reactive disaster-recovery approach to a more proactive Business Continuity Management approach and is being aided by futuristic technology solutions to create more resilient Supply chains.
And as they’ve rightly said it, ‘Change is the only constant!’
Through HICX’s Supply Chain Mapping solution, we enable you to have complete supply chain visibility, increase your resiliency, and be the first out of the blocks on all future issues. Contact us for further details:
https://www.hicx.com/contact-us/
Posted in
