12 Sep Brexit impact. Are you prepared for it?
Nobody knows what the exact outcome of Brexit will be. However, what is expected, is that it will lead to many changes in the supply chains of international organizations. International trade between the United Kingdom and the European Union will look different post-Brexit. Does your company do business with the United Kingdom? Then continue reading on what Brexit could entail for you.
Changing the global supply chain
Brexit will require your company to take a new look at the heart of your company, the internal supply chain. That is where you will notice the biggest changes.
The complexity of international trade with a country that lies outside the European Union will increase. But why? Think of the many new trade agreements and regulations concerning customs that have to be reached. Also, don’t forget about all processes that have to be revised after the implementation of Brexit. From planning, stock supply, infrastructure to supply chain operations, it is evident trade will change when the United Kingdom is no longer part of the European Single Market. Import and export will be affected both ways, for the UK as well as the rest of the European Union.
But how do you make sure your business can keep growing? The key is a clear and efficient trading relationship. Shifting your purchase from a supplier abroad to a local supplier can help your company save time and money and increase your efficiency.
How is trade going to change?
What about the costs? After Brexit it will be difficult to arrange all trade centrally. For the United Kingdom the absence of duties and quotas in EU trade will come at a price. It is estimated that that Britain will be at a loss equating £75 billion, if they are excluded from the Single Market.
The impact on EU-UK trade depends on several factors. There are two possible scenarios that can take place:
- The UK opting for a comprehensive Free Trade Agreement (FTA)
- The UK opting for the return to the WTO rules
In both scenarios the costs of trade between the UK and the EU will increase. Is your company located in either the Netherlands, Belgium or Germany? Then you are one of the biggest players on the international market with the UK. Prepare yourselves for a possible decrease in imports from the UK.
The availability of products
The ease of import is vital for your business. No available products equals no profit. After Brexit, international trade between the UK and EU companies will look very different. From UK shipment to the European Union and vice versa. Factors such as increased lead time, uncertainty in supply, new tariffs and customs duties have to be considered when trading with the United Kingdom. This will consequently have an impact on the access of consumer markets. It is realistic to assume that products that are outsourced in the UK may take longer to arrive than you would like. Doing business with a local supplier can partially eliminate these issues.
Make the shift to a local supplier
Where to start? Making the shift to a local supplier would be a smart first step. By using a local supplier you will be able to benefit from quick lead times and avoid complicated regulations concerning customs and tariffs. Are you having trouble finding local suppliers who can consolidate your global scope after Brexit? No worries. Bechtle can help. Due to the international presence of Bechtle , they can support you with optimizing local SLA’s, legislation and are able to consolidate your spend.
Would you like to know more about the possible influence of Brexit on your purchasing department?
On the 5th of November we will organize a webinar about the optimization of your purchasing process. How can you save on unnecessary IT spending and how do you set up an efficient pricing strategy for your IT procurement? Find out during our webinar.