Despite being less than a week until the EU referendum, a lot of UK organisations remain unsure about what a Brexit vote might mean for their businesses and supply chains, according to Duncan Boyd, manager at global supply chain consultancy Crimson & Co. He argues that it is essential that industry leaders take steps to account for what is becoming the biggest business risk of the past decade.
Much of the debate has centred on the impact that Brexit would have on exports and economic growth, presenting concerns and opportunities in equal measure. On one side the UK will lose access to the world’s biggest market but, on the other, it will now be in a position to negotiate free trade agreements and export more freely, away from burdensome regulations.
A remain vote is likely to yield little change for organisations, but it is critical that steps are taken to prepare in case of Brexit. Enterprise level organisations will most certainly have the capabilities and resources available to prepare for any changes; however there still appears to be confusion for SME business leaders. In light of this, Boyd believes there are simple steps that can be taken to reduce risk and ride out any political or legislative changes:
“The EU referendum is likely sitting high on most firms’ agendas with a lot of discussions typically centring on arguments around trade, freedom of movement and the overall ease of doing business in light of a leave vote. The reality of a Brexit will be a shock to the British economy, bringing notable changes to how we now export and receive products and services into the UK.
“An example of this could be increasingly high tariffs on exports. Other more mundane considerations include increased paperwork a leave vote would likely bring. Traditionally, importing goods from a European supplier in a single market would have been as simple as putting goods on a lorry and shipping through the tunnel in a matter of hours. This could now take much longer with significant time now added to the supply chain process, heaping pressure on logistics providers to ensure they have the capabilities in place to handle new rulings, while limiting the impact on existing workflows.
“It is important that organisations take steps to account for a possible Brexit, in order to reduce their exposure to risk. Dual sourcing strategies can be undertaken to ensure key supplies are not purchased exclusively from Europe. Actions can also be taken to communicate with European suppliers and work out cost-saving strategies and efficiencies, which can offset any new fees incurred.”
Boyd concluded: “Additionally, industry bodies will have a view and information about the implications of what a leave vote is likely to bring – the Centre for Retail Research recently outlined considerations for consumers and others will likely have similar guidance in place. Finally, contingency planning and risk assessments across suppliers will allow you to understand what effect change would have on trading activity. This will allow you to come up with solutions to limit the impact on your customers.”