Post-Brexit Supply Chains: Risk And Reward
Almost four years after Britain’s EU referendum, the United Kingdom will leave the European Union and will enter a new era of transition. During this period, the U.K. will get treated functionally as an EU member state and required to abide by the trading agreement rules.
The year ahead will be one to watch and likely a rollercoaster of fast-paced action:
- Both sides are determined to complete a new, comprehensive trade deal by Dec. 31
- EU leaders are adamant the timescale for completing the trade deal is unrealistic
- Concerns that the UK could become a low tax, low regulation rival to Brussels get raised
- Non-alignment with EU standards will make it harder to agree on a trade deal which reduces tariffs and friction for U.K. businesses
- Early indications are that some industries and companies will suffer as a result of U.K. refusal to abide by Brussel’s rules
The implications for U.K. businesses are significant, particularly within the manufacturing industry that relies on last-minute supply chains. Disruptions or costs getting incurred at the border could impact bottom lines and potentially see companies leaving the U.K., which will, in turn, damage the economy.
The uncertainty triggered by this move translates into significant supply chain risks and will require businesses globally to consider their options very carefully. If it wasn’t already crystal clear that there is a need to digitize the supply chain, to create real time visibility and connected data flow, Brexit certainly laments this. Not having a clear and accurate view of your shipments will result in additional costs and potential delays. If businesses are not connected with every vendor, service provider, supplier, and everyone involved in the critical path, the risks, when they become known, will be in the past context. Companies will be unable to make decisions with certainty ahead of, or in real time, and instead, will be reacting to information that is days or even weeks old.
The risk of not digitizing your supply chain is far too high. Those companies that feel they can continue to manage their processes manually through spreadsheets and emails may find out to their detriment, that this is simply not a practical option.