Manufacturing companies, preparing for Brexit are stockpiling goods to help prevent any impacts to their business according to a survey* of supply chain managers from the Chartered Institute of Procurement & Supply (CIPS).
The findings come from a survey of 255 UK manufacturing supply chain managers, the professionals responsible for navigating customs, negotiating with suppliers, keeping supply chains moving and bringing goods to UK consumers, the EU and the rest of the world.
Almost two thirds of the Uk manufacturing supply chain managers (60%) said they were stockpiling to mitigate against border delays, supply chain disruptions and in the event the UK leaves the EU without a deal in place. A further 8% said they were trying to stockpile, but were struggling to find available space and at an affordable price.
The survey also found Brexit was having an impact on a range of other issues that were not only placing UK supply chains at risk but also the health of UK manufacturing businesses. Concerning a future pipeline of work, 27% of respondents said clients were hesitating to place orders until the Brexit impasse became clearer. The impact of currency fluctuations were still being felt by 56% of respondents as supply chains became more expensive and as negotiations and changes in the political environment continued to have an influence. Some supply chain managers in the sector (26%) were mitigating against their exposure by re-negotiating contracts with their suppliers, allowing for prices reviewed prices to be agreed following currency fluctuations. A further 13% of respondents said their supplier relationships had become strained.
CIPS Economist John Glen and Visiting Fellow at Cranfeld University said,
“All this is not ‘project fear’ these are real costs that are being incurred because of the Brexit impasse. Politicians must make their minds up and get on with implementing a decision so that UK businesses can enjoy some certainty and start to plan for the future, no matter what the outcome of the political debate.
“A failure to do so will prolong the uncertainty resulting in the damage that uncertainty has on specific businesses, sectors and the UK economy as a whole.”
For the full sector results ahead of the report publication, plus main results and other sectors, contact the CIPS PR team on 01780 756777
Trudy Salandiak, Dip CIPR, MCIPR, ACMI, Public Relations Manager; T +44 (0)1780 761576 • M +44(0)7554400731•W www.cips.org
The Chartered Institute of Procurement & Supply (CIPS)
The Chartered Institute of Procurement & Supply (CIPS) is the world’s largest procurement and supply professional organisation. It is the worldwide centre of excellence on procurement and supply management issues. CIPS has a global community of over 200,000 in 180 different countries, including senior business people, high-ranking officials and leading academics. The activities of procurement and supply chain professionals have a major impact on the profitability and efficiency of all types of organisation and CIPS offers corporate solution packages to improve business profitability.
*About the survey
The data was collected from the 6th to the 22nd of February 2019 and included 255 respondents from the manufacturing sector in the UK. 5% were located in London, 16% in the South East, 7% in the South West, 16% in the West Midlands, 7% East Midlands, 3% East of England, 6% North East, 16% North West, 9% Yorkshire and Humber, 2% Northern Ireland, 8% Scotland, 5% Wales.
All respondents came from the private sector. 52% of respondents worked in large businesses of 250 or more employees, 36% were a medium-sized business and 12% worked at SMEs. The vast majority had an international supply chain including some European suppliers (97%). Only 3% had UK-only suppliers in their supply chains and the remainder didn’t know.
Some of the responses were rounded up/down for ease of use.