After years of uncertainty and a huge amount of planning, on 1 January this year the UK finally left the European Union with a deal.
Whatever your political views are, procurement teams across the world were watching keenly to see how the changes would impact global supply chains and will be scrutinising the ongoing impacts on their organisations.
Our February snap Brexit survey highlighted that the UK border in particular is having teething problems getting to grips with the new procedures and we are starting to see signs of that as consumers. 60% of the businesses we asked said delays have increased, reaching at least two to three days for getting goods into the UK.
This is up by 38% since our survey in January when the border controls first came into effect, and new paperwork is cited as the biggest cause of the delay. For perishable goods that is just not acceptable, nor is it for fulfilling customer orders, or when a shortage of component parts grinds your production line to a halt.
Brexit and Covid highlighted the need for us to review sourcing strategies, to have a greater focus on spreading and managing risk, to build greater resilience into supply chains. Even if their effects are short-term, the growing sustainability agenda will push us to refocus sourcing decisions to include local provision and facilities.
Does this mean the end of long, lean supply chains? No. Will we see more of a spread of strategies that give us options and the agility to switch and change at short notice? Most definitely. What is clear is investment from governments and businesses to develop local capability and capacity where it doesn’t already exist is essential.
We must learn from sectors such as the steel industry where investment in technology by countries including South Korea led to a high quality and globally competitive manufacturing base for steel and items fabricated from steel.
Global competition is not between countries or products, it’s about competition between supply chains, and bringing at least part of our supply chains closer to home allows us to manage them more effectively and respond to our customers in an agile way.
If they are also to be competitive, they need the right technology and investment. I certainly see the consumer continuing to be a critical influence over where and how we source goods and services, whether that’s scrutinising their sustainability credentials, sourcing and supporting local economies or demanding very quick provision.
The parameters in which we operate are always changing and we must reset our operating models accordingly. We will watch with interest over the next few years to see how modern supply chains adjust to our current climate and just how big an impact new digital technology will have.