What Leading Supply Chain Firms are Doing to Plan for BrexitJanuary 14th, 2020
Modelling is at the Heart of an Effective Contingency Plan
With the date set for the UK to leave the EU as 31st January 2020, it’s fair to say our industry is, if not in a panic, severely rattled by Brexit.
It’s well over a year since government sources leaked the infamous Brexit crisis planning reports that posited a worst-case “Armageddon” scenario, with Dover at a standstill, supply lines completely broken and the M20 designated as a lorry park. There’s been little comfort since, as political tensions and wrangling obscure the way forward for supply chain businesses that support livelihoods as well as complex supplier to customer relationships.
What will it mean for European freight if a hard Irish border is established? How long will additional customs checks add to current drivetimes? Will border delays make us uncompetitive and unable to deliver fast enough to meet business and consumer demands? What will be the costs of additional duties, compliance, administration and licensing? Will we lose customers? Will our current network of hubs function effectively and profitably? These are all vital questions that supply chain operators are trying to answer, even though it’s still unclear what eventualities they need to plan for.
Here’s what the most proactive supply chain businesses amongst our clients are doing…
1) Researching and Seeking Advice
Industry bodies and independent sector reports help firms identify the Brexit impacts that are most likely to affect them. Prioritise them and tackle them in order, so you develop the most detailed contingency plans for the highest risk aspects for your particular business.
2) Evaluating Operational Impacts
Work with your operational teams to identify the activities and processes that may be specifically affected and in what way.
3) Modelling Alternative Scenarios
Accurate modelling will give you the clearest understanding of the most effective ways to handle a range of scenarios. Using specialist software like Optisite, you can test your current supply chain network and explore potential new hub and storage sites or configurations. With a range of options, you can get into the detail of facility availability, costs and likely timescales for change, as well as practicalities of a transition plan.
4) Planning Beyond Brexit
While Brexit is the pressing priority, keep in mind that the trade environment is changing continually. Worldwide and domestic operations are evolving. If you’re auditing current operations and modelling for the future, it may create an opportunity to review your market strategy. The ICAEW recommends supply chain mapping in the context that “this exercise is not just about Brexit. Set the expectation that it should deliver broader business benefits.”
5) Preparing Staff and Clients
Clear communication will help keep your operation working smoothly in times of uncertainty. Staff will want to know what Brexit could mean for their future career and job security. Clients want to know what it could mean for service levels and costs. Be mindful of media headlines and be ready to respond with honest information about what you’re doing to plan for Brexit and how you intend to mitigate the impact. Reassure staff and customers that your organisation is focused on realistic ways to adapt successfully.
If your organisation needs help with research and modelling resources and tools, CACI can help. From a full Optisite subscription to modelling services and consultancy, our supply chain experts have been looking at Brexit impacts for clients for over three years.
Talk to the CACI logistics team about making sense of the possible scenarios and defining options and practical contingency plans for your particular business needs.