A seasoned procurement expert has urged businesses and public sector organisations to use the coming few months to prepare before the formal Brexit deadline of 29th March 2019. As a matter of urgency, organisations should stop biding their time in the hope of an exit agreement and review their supply chain and procurement arrangements to identify risks.
Simon Lipscomb, marketing director of a large procurement consultancy, emphasises that despite over two years of negotiations following the Brexit vote of 2016, little is known about what kind of exit agreement is in store, if indeed there is one. Hopes of a deal appear to be rapidly diminishing.
However, a recent survey by the Institute of Directors found that 49% of 800 business leaders polled do not currently have plans to develop or operationalise any contingency plans for Brexit.
Given that these are unprecedented times and no blueprint exists for disentangling a member state from the EU, and the likelihood that Brussels intends to make the UK pay for its decision in order to protect the EU from splintering, inaction cannot be an option. Lipscomb urges procurement leaders to review three core pillars of their function: contracts, strategic sourcing strategies and supply relationship management.
Drafting a clear organisational risk profile is urgent. Risks, including reliance on EU funding, the abrogation of freedom of movement, labour shortages and rising cost pressures, should all be aligned against a hierarchy of needs. Key contract clauses relating to Brexit readiness, such as termination and continuity disruptions need to be carefully delineated.
Strategic Sourcing Strategies
Existing category management strategies must be reviewed to define category objectives, strategic sourcing strategies and the work pipeline, and where each of these may be impacted by Brexit.
Supply relationship management
All suppliers should be contacted urgently to work through and identify and potential risks and likely pressures in key categories as the Brexit deadline approaches. Suppliers need to revise their mitigation plans and implement pragmatic business continuity plans.
Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.