A seven-point checklist has been produced by CIPS to help procurement professionals prepare for Brexit.
In a report CIPS sets out how auditing supply chains, reviewing contracts and reassuring stakeholders should be among the things buyers are doing to deal with the uncertainty generated by the vote to leave.
The UK government has published a series of position papers covering issues such as the customs union, suggesting a continuing ‘frictionless’ flow of goods across the border, though in the report CIPS economist John Glen said he was predicting a ‘hard’ Brexit.
“What I would need to see from a new Conservative government, in order to change my view of the likely outcome of Brexit negotiations, would be a compelling narrative as to why the EU should agree to a soft Brexit. As yet, I do not see why the EU should agree to that,” he said.
“And I am not aware that this compelling narrative exists with May’s Brexit negotiations strategy and if it does exist, has not been shared with the UK voters or the EU negotiators. Yet.”
The report includes the results of a survey of supply chain managers that found 32% of UK firms who work with suppliers on the continent are looking for alternative suppliers based in the UK.
1. Audit your supply chain from end to end
Understand what you spend, who your suppliers are and build strong relationships with them in order to be agile and flexible.
2. Reassure and reassure again
Customers, suppliers, partners, staff and your CEO are going to get nervous. The deal is still going to take just under two years to negotiate, so for now it’s business as usual. However, there are things you can do to prepare. Looking at length of contracts and the implementation of break clauses, or perhaps currency hedging and multi-sourcing could help your business to prepare.
3. Work together
Build cross-functional teams to monitor the situation and include risk management colleagues, compliance, financial, legal, operational, sales and marketing teams.
Understand and prioritise the likelihood of any risk impact and have a clear understanding of what this could be, who will be affected, why and where the impact with happen.
5. Review contracts
Don’t just look at contracts; also look at any deals on the horizon.
6. Research issues
Research issues that affect your sector and businesses of your size and continue to monitor as the situation evolves and changes.
Develop a list of credible sources and arm yourself with data and timely, regular information. Keep stakeholders regularly informed, remaining clear and transparent about the implications.
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