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Brexit Continues to Create Confusion for EU and UK Firms

APICS CEO

Friday November 10, 2017


European Union businesses expect to contract less with U.K. suppliers and more with suppliers in their own market after Brexit. Earlier this week, The Guardian reported that British exporters could lose billions of pounds in business once Brexit is finalized.

The Guardian reported findings from a survey by the Chartered Institute of Procurement & Supply (CIPS), which revealed the following:  

  • Nearly two-thirds of EU businesses surveyed expect to move their supply chains out of the U.K.
  • Of the U.K. businesses surveyed, 40 percent plan to replace their EU suppliers.
  • U.K. businesses with more than 250 employees have spent in excess of $131,000 preparing their supply chains for Brexit.

“Business leaders have warned the government that the uncertainty about Britain’s relationship with the rest of Europe had forced its members to put in place contingency plans that could lead to many moving some or all of their business to Ireland, France, the Netherlands or other parts of the EU,” writes Phillip Inman for The Guardian.  

The CIPS survey, the findings of which came from the responses of 1,118 supply chain managers all over the world, revealed that about a quarter of UK businesses were taking a contrasting approach by reinforcing their relationships with key EU suppliers.  

Nevertheless, The Confederation of British Industry (CBI) reports that 60 percent of its members will proceed with contingency plans if the UK partnership with the EU is still ambiguous by March 2018. CBI represents 190,000 British businesses.   

“The Brexit negotiating teams promise that progress will be made soon, but it is already too late for scores of businesses who look like they will be deserted by their European partners,” says Gerry Walsh, group CEO, CIPS. “British businesses simply cannot put their suppliers and customers on hold while the negotiators get their act together.”   

Walsh continues, “The success of the negotiations should not be measured on the final deal only but on how quickly both sides can provide certainty. The clock is ticking.”  

Supplier relationships and risk  

For businesses around the world, Brexit demonstrates a crystal-clear example of how politics can affect operations and the bottom line. However, supply chain professionals know their networks and partnerships can shift at any time, and they plan accordingly. Consider the definition of risk response planning from the APICS Dictionary: “The process of developing a plan to avoid risks and mitigate the effect of those that cannot be avoided.”   

APICS certifications prepare professionals to effectively deal with challenges – the expected and the unexpected. Earning the APICS Certified Production and Inventory Manager (CPIM) credential, for example, demonstrates to employers and potential employers that you have the proven knowledge and skills to strategically streamline operations.

The Strategic Management of Resources section of the CPIM learning system includes higher-level thinking on strategic planning and implementation of operations. It imparts an understanding of how market requirements and strategic position of the organization drive the resources and processes of an organization, and it includes how operational strategies are developed and implemented, change management, and risk implications.  

In response to its customers and constituents, APICS recently revamped its CPIM program, consolidating what was five exams into two. To learn more about the certification and its improvements, visit apics.org/cpim.  

All comments will be published pending approval. Read the APICS Comment Policy.

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