A streamlined supply chain is urgently needed to head off the “tremendous” impact Brexit is set to have on the UK’s social housing sector, an academic has warned.
Jonathan Linton, director of the Logistics and Supply Chain Management Research Centre at the University of Sheffield, said in his report Social Housing Supply Chains and Brexit that while leaving the EU would impact the entire UK economy, the social housing sector is particularly vulnerable.
In this sector it is not possible to pass on additional costs to the end user and the occupants of social housing are particularly vulnerable, he said.
“Impacts from Brexit were felt as early as the day after the vote. The devaluation of the pound and decisions to tighten credit quickly impacted the social housing supply chain both directly and indirectly,” Linton said.
He believes uncertainty, volatility and unanticipated consequences will continue to impact social housing supply chains for many years.
And while in the past inefficiencies have existed in supply chains, such as lack of integration and coordination, the market was sufficiently stable and profitable that these overlooked opportunities were not so important.
“However, faced with extreme volatility in currency and an uncertain investment and operating climate, it is now important that inefficiencies be eliminated and supply chain partners work to make communications and the system in general more effective,” he said.
Linton believes social housing construction and operation performance can be improved with more information sharing, coordination, task modification and a shifting of responsibilities within the supply chain.
“In the short to medium term the existing supply chains should be optimised to reduce risk and to gain an increased understanding of their current practice,” he said.
“As the dynamics of Brexit decline and a future stable system is approached it will be easier to adapt the existing supply chains appropriately.”
He called on the sector to revisit inventory policy as currency devaluations tend to lead to price increases three to six months later. This means inventory carrying costs should be avoided where possible.
“Brexit as an event provides challenges that can at least be partially addressed through consideration of both integration and disintegration of existing relationships,” Linton said.
☛ Want to stay up to date with the news? Sign up to our daily bulletin.