Procurement and supply professionals have a crucial role to play in the immediate aftermath of the UK Brexit decision, said David Noble, CIPS group CEO. “You must act as the suppressor of panic, not the creator,” he advised.
People who manage the supply chain are the outwards face of the company, so how they behave is fundamental to how the business manages these coming weeks and months. Supply chains can emphasise or exaggerate concern, which can then be magnified all the way down the chain, he warned.
In the first week post Brexit, as mounting questions about the future of businesses remain largely unanswered, Noble recommended that procurement professionals step up, lead the way and help others calm down by acting as the guardians or protectors of the enterprise.
In a time of risk, more attention needs to be paid to the supply chain and currency exposure, Noble believes, adding that professionals who understand the supply chain and where costs are built up are crucial to ensuring the company manages this period. Firms should extend hedging to protect themselves in the right places. “The greatest exposures are all lying within our profession’s remit and linked to supply markets, contracts and trade regulations. We have to step up and take the lead as the external representative.”
“The CEO needs to know he has a robust, qualified person. He is going to want to know if the company risks or exposure have changed. I don’t think any industry will be unaffected, so it is important to monitor and plan,” he said.
CIPS is preparing a health check to guide users through taking the necessary precautions at this stage and help them identify supply chain risk that they can apply to different scenarios as more information comes through.
CIPS Brexit Healthcheck will provide buyers with some key questions to consider in order to understand their supply chain exposure and opportunities in relation to issues such as sensitivity to exchange rate fluctuations or penalty tariffs. “A degree of currency risk hedging is important,” Noble advised.
Those who may be caught out, such as small UK businesses that import from Europe for example, should consider the opportunities as well as the threat. “Where else you can go? Seek out alternatives, and leverage relationships with different parts of the world.”
A similar level of professionalism would be required should protectionism occur, said Noble, alluding to the “nightmare scenario” where economies lock out the UK with trade-restrictive measures. “This period is going to require a high degree of professionalism as well as sanity, calmness, problem-solving skills and developing new relationships as well as shoring up old ones. Experienced and qualified (licensed) procurement and supply professionals can take the helm here and help steer their organisations through the choppy waters of the coming months and years.”
The CIPS Brexit Healthcheck is available now.