Scott Collins, CEO of well established procurement specialists Hawtrey Dene, who are working with Political Insight, offers his advice on optimum business preparation for Brexit post January 1st 2021
With the continued uncertainty about the result of any trade deal there are some renewed concerns for the impact on the supply chains of organisations across the UK. There are some relatively simple actions that organisations of any size can take, or polish up on, to give them some preparedness for the possible impacts that might arise and to allow them to maximise their positioning for the opportunities that will become available.
With the current climate for all sorts of organisations challenging, we’re aware that budgets are not as flexible or as full in terms of project costs for preparing for Brexit. However we’ve harnessed input from our teams, our client contacts and some procurement and supplier side colleagues to pull together some tips and steps which will help you get onto the front foot and have the relevant information to allow you to make informed decisions on how best to deal with challenges and capture opportunities.
· Speak to your suppliers – it’s the single best starting position to mitigate any kind of risk. Raise the risk, ask them what they’re doing or can do to mitigate them, work with them on common actions, early alerts, monitoring approaches. Maybe you and work to hedge costs and forward buy additional raw materials to take away some possible issues? Could they stockpile for you if you helped on payment terms? Start a conversation now and be frank and open about what you are trying to stop happening. It’s a point which permeates much of procurement and should be our screensavers, but ‘we’re in this together and we’ll never have a better-informed source in a market or sector than our key supplier’. Once you make a start on this it’s a great basis for developing your Supplier Relationship Management approach and processes.
· Bring together your third party contracts – sounds obvious doesn’t it but in many organisations with a less centralised approach to contracts can sit in different areas. Legal, procurement, company sectary or operational teams who hold their own supplier agreements. If you don’t have anything in place it’s not too late, or too complicated to take steps. A simple start is to work back from your supplier data and spend data and categorise and map the key suppliers to start collating contract information. Declare a ‘contract amnesty’ and ask key stakeholders to report what they hold. It doesn’t have to be more than a spreadsheet with key information, contacts and principle terms. There are variety of platforms that can help and in fact making any kind of start by building a spreadsheet will make a later migration to a system with more ‘whizz and bang’ even easier.
· Carry out some due diligence on your core suppliers – pull together some key questions and data paths (give us a shout if you want some help or a template) and start to research some easily obtainable information around financials (you can use many online services), company reports, market news (set up a Google Alert on the key suppliers) and then work out what you’re going to ask the suppliers for. Will they share their sales data, do they have intel reports around the markets that concern you, do they have a mitigation and BC plan you can see and work from too? I refer you to point 1 here – start talking early.
· Build your own resilience – if you have some suppliers supplying critical materials, goods or services, see where there are others who could help if you needed additional or replacement capacity. Put in place terms and conditions, establish indicative supply prices, set them up as suppliers so payment and delivery is easy, be open with them that you’re building resilience again possible impacts and ask them what they think too. If you need help then we can assist both small and larger organisations with resource.
· Cost and Value review – now you’ve started to pull together so much information about your supply chain you’re in a great jumping off position to look at costs overall and where you spend money across the supply chain.
All of these steps will help you be ready to take up the opportunities that Brexit will bring across the economy and to do so in an informed manner with the ability to work with your supply chain to maximise benefits on both sides.
If you’d like to ‘phone a friend’ and discuss your approach we won’t give you the hard sell, just some ideas and a nudge in the right direction. If you need support on making it happen we can provide a range of solutions to suit all size and type of organisation. Our London office is 0203 740 4150, in Kent it’s 01227 700417, and we’re always happy to chat.