Find answers, ask experts and talk with the procurement community
Do you want to deliver savings faster, reduce risks and transform functional performance?
Inspirational thinkers and innovators share their vision, providing unique opportunities to network and share best practice
Over a recent Sunday lunch, my eight-year-old daughter asked me whether we were going to run out of food because of Brexit.
While I was slightly alarmed that she was worrying about such things, I was pleasantly surprised by her interest and grasp of current affairs, especially ones that affect my line of work so directly.
With the UK’s scheduled withdrawal from the European Union on 29 March 2019 looming fast, there is seldom a day that goes by without me discussing Brexit with people in the food, drink and agriculture sectors, where raw materials and products are perishable and so have a much shorter shelf life.
When I enquire as to how they are getting on, I find people’s responses tend to fall into three broad groups:
If you work for a multinational, it’s likely you’ll be in the first group. But, interestingly, some large retailers are in a slightly different place. One supermarket category head told me there was only so much planning they could do because they have "thousands of stock-keeping units" and a good percentage of those were fresh produce. They said Christmas sales were the priority and they would "trade through shortages when we get there”.
Those of you working for mid-sized businesses, small and medium-sized enterprises or startups are more likely to fall into group two or maybe three. Here, supply chain teams could either be in their infancy, find themselves understaffed, undergoing an organisational restructure or be in the middle of a drive for innovation – all of which will make focusing on Brexit more difficult.
For those in groups two or three, there is still a chance to do something to mitigate risk. Some of the following quotes from people I have spoken to may give you an angle on how to tighten up your plan:
“I organised a cross-functional meeting with Sales and Marketing to create a promotional plan suitable for Brexit shortages.”
“We’ve already agreed with our retail customers the substitute wines we can provide if any of the agreed range runs dry.”
“We felt overwhelmed trying to cover every base. We stripped things back to two risk matrices of severity vs likelihood for supply and cost and are focusing on what really matters.”
“Don’t be fobbed off by a Tier-1 supplier telling you everything is OK. Our investigations found they were buying materials through second-tier distributors who were poorly prepared. We’re funding our supplier with six weeks of additional stock.”
“Careful on the small spend items. Our fresh herbs are less than 5% of total spend but they go into most recipes.”
“Pre-plan recipe reformulation for high risk materials. Shelf life trials, consumer tests and customer approval can take months.”
“We applied for Authorised Economic Operator (AEO) status, which should give us some preferential treatment through customs.”
“Where possible, make in the UK for the UK and in the EU for the EU. We have re-engaged with a latent UK supplier and designed a mobile production facility that we can turn on with four weeks’ notice.”
“I found the pharmaceutical industry has contracted considerable additional warehouse space, Channel Tunnel crossing and airfreight slots. As such, we’ve tightened our freight contracts and prebooked a couple of pallets of airfreight for the emergency widgets.”
“Remember the pound tanking on 24 June 2016? We were caught sleeping. Hedge your currency now or at least set up your currency mechanism and process so you can press the button very quickly if you need to.”
“Do some sensitivity modelling on tariff scenarios. Share it with finance as they may not be aware of the impact.”
Let’s fast-forward to Sunday lunch in the Frost household on 31 March 2019, by which time the UK could have left the EU with no deal.
Will it be a bare table? Most unlikely. The government will have to find solutions to pinch points very quickly to avoid unrest.
Might our salad bowl be missing a few items? Quite possibly.
Will there be fresh flowers on the table? More risky.
And as for a glass of wine? It will certainly be there, but I might have to pick a different bottle from usual at the supermarket.
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.