Our “no regrets” decisions so far have focused on setting up the right governance and supporting your people. Today, Johnathon Marshall offers the third set of decisions in this series.
Trade between the UK and the EU has been based on agreements that allow free movement of labour, goods, services and capital. In my role leading our UK Supply chain practice, I am working with clients across a range of sectors to plan for a world where these trade agreements will probably be very different.
Managing the cross UK and EU supply chain has been relatively straightforward. Many UK and EU based companies have built up complex intra-EU supply chains, accessing innovations for their business whilst benefiting from there being no tariffs, a low costs in moving goods across borders, and limited border delays. These characteristics may apply if the UK is no longer part of the europe.
My recommendation for a “no regrets” decision that all businesses can make now is to know your supply chain. To future proof global supply chains, businesses first need to understand in detail where and how they buy and sell products and services from around the world. Understand how these are distributed today, the product flows and the tariffs they are currently exposed to and how these may change depending on the final Brexit end-state. This will allow you to model the impact of new supply models on service, cost and operational capabilities. When required, they will be prepared to change business practices, adjust their core operating models, switch suppliers, renegotiate contracts or move parts of their supply chain activities into new territories, all from a position of knowing the best answer for them.
Below are some possible areas of impact that businesses should consider as they appraise their current supply chains. This list is not exhaustive and the relative impact and importance of each may change as more is known about the outcome of negotiations.
Businesses that are well prepared, have modeled the scenarios will be able to adapt effectively in response to the challenges brought about by Brexit, as well as being equipped to capitalise on the opportunities that will arise. Having a list of considerations and scenarios is important, but businesses need to also be aware of how quickly alternative arrangements can be implemented once concrete information does appear. These could provide you with a tangible “first-mover” advantage if your business has the response plans ready and can adapt, switch or remodel at pace.
Partner, PwC United Kingdom
Tel: +44 2072123392