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Most experts and observers have been astounded by Britain’s decision to leave the EU. Many of the businesses that we have been speaking to are similarly surprised.
This shock will likely persist for some time. You can let it consume you, your function and your business or you can assess the opportunities it might present.
Currently, the questions about material effects of the decision are overwhelming. What are the regulatory consequences? What is our contractual exposure? Can we trade freely everywhere? These are questions that CEOs will be asking right now, and procurement can answer by analysing suppliers and contracts. Start knocking on doors and find the answers to the issues that are at the top of the board’s agenda.
The pound dropped 10% after the results were announced. Something of a rally appears to be underway. But the see-sawing of the currency’s value after the release of opinion polls will be exaggerated to the extreme when leaks surrounding the negotiations enter the public domain. Try and use, as much as possible, more stable currencies as it may take sterling some years to completely stabilise.
Worried suppliers that are seeking the security of long-term contracts may be looking to drop prices to insure against future economic instability. The current phase of fear and doubt that is creeping in, not only in the UK, but across Europe, may edge companies into a state of vulnerability.
Leading a list of buyer worries at the moment will be the legal exposure that suppliers posses in extended supply chains that hop between different regulatory jurisdictions. Simply put, most organisations are not aware where their weaknesses lie. This can be the moment to win resource in new systems and tools.
Where UK-based businesses stand in relation to EU regulation is now very much uncertain and will be for the next few years. The EU has or is looking to implement legislation around things such as the sourcing of conflict minerals, modern slavery and carbon emissions. Given the uncertainty and how full the Westminster legislative agenda will likely be over the next few years, procurement should continue pushing by themselves or together to make progress on these key consumer concerns and risks.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.