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Is Your Business Brexit Ready?

The year 2020 has introduced widespread disruption followed by dramatic changes in consumer behavior. All aspects of the business landscape have been impacted since the onset of the year. The pandemic has hurt company cash flow and challenged their bandwidth leaving them exposed and vulnerable. With the Brexit transition period closing in, UK supply chains are preparing for prolonged uncertainty.

Companies must prepare for the inevitable before it's too late. The Brexit transition period ends on December 31st, 2020. What will this mean for modern trade relationships?

The UK’s exit from the EU will mark a landmark shift that will drastically change the way companies perform regional business operations. The changes that are forecasted to come into fruition entering the new year will have a broad impact. Which means that like it or not, organisations will have to adapt to not only survive but to continue to foster growth and productivity. Whilst there is still much to be determined based on the outcome of negotiations, there are proactive steps businesses can take to be prepared and operate resiliently. Identifying early on what changes your organisation must make will be crucial to maintain operations in the future trade landscape.

Businesses must have an understanding of Brexit’s impact on their product and/or service offerings in order to ensure readiness. Considerations must be accounted for in regard to whether or not the supply is resilient to continue operations in a post-Brexit trade environment. Additional items to consider include supply chain capabilities and flexibility, impacts on the current operating model and procurement procedures, business objectives, financial performances, operational performances, timeframes, etc.

Brexit will introduce fundamental changes for both the inbound and outbound supply of goods and services in the UK. It's imperative to take a holistic, comprehensive approach to supply chain strategy and management. This means paying close attention to risk management strategies to eliminate or mitigate operational risks and on the same coin, maximise competitive advantages.

UK companies should see Brexit uncertainty as an initiative to rethink the supply chain. Below are several focus areas identified to prompt critical thinking and transition planning.

1. Sourcing

Companies must explore all of their options -- this includes offshore opportunities and expanding their network of suppliers locally. This does not mean companies must be limited to local suppliers, but perhaps developing partnerships with international suppliers that have local footprints. This approach will help to create a reliable supply at a competitive cost despite the unprecedented trade climate.

2. Footprint

This is a good time to reassess the allocation of production and ways to optimise company manufacturing and logistics footprints. In order to stay lean, companies can utilize pre-existing data to evaluate the decision-making processes and optimise costs.

3. Demand

Data will also be a useful tool when it comes to forecasting demand. Under any circumstances, it's difficult to predict how the market will behave; however, forecasting to anticipate behavior and predict changes in demand should be reinforced to create room for flexibility to manage volatility.

4. Inventory

Firms will need to pay a visit to their inventory strategy and make short term adjustments to manage uncertainty and establish a continuity plan that will serve all levels of Brexit outcomes. As for the long term plan, companies will need to assess and make changes to stock levels in order to meet new conditions.

5. Talent

The upcoming changes will not only require a resilient, agile supply chain but similarly, a resilient, agile team. This means that talent must mirror the supply chain's goals and capabilities. It should be a priority to establish a flexible organisation in order to remain lean, but effective.

Brexit comes at a time of high uncertainty levels due to geopolitical and economic trends. But, companies can be responsive in their execution plans by revisiting their supply chain strategies beyond the foreseeable, tumultuous future, but to deliver improvements and upgrades to their bottom line performance.

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