Breaks in supply chains surface ahead of Brexit

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Fractures have begun to emerge within UK and EU supply chains ahead of the trade hurdles to be caused by Brexit.

The findings were uncovered in a survey conducted by CIPD drawing on insight from over 1,100 UK and European supply chain managers.

Fears of loss

Surprisingly, almost one in 10 of the responding supply chain managers admit their business has lost contracts due to Brexit. Furthermore, 14% fear parts of their operations will not be viable any longer.

In the space of 6 months, the level of EU businesses that expect to move some of their supply chain out of the UK due to Brexit jumped up by 19% to 63% of the practitioners surveyed.

Around 40% of UK businesses are looking for local partners to replace their current EU partners. Encouragingly, 26% are determined to invest in strengthening their relationships with suppliers based in Europe.

Solutions suggested

Consensus depicts that the Government should strive to minimize tariffs and quotas between the UK and Europe in its negotiations.

Gerry Walsh, Group CEO, CIPS, commented: “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. British businesses simply cannot put their suppliers and customers on hold while the negotiators get their act together.

“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.”

Deadlock in Brexit negotiations is causing uncertainty with a considerable portion struggling to prepare and finalize their own corporation’s arrangements as a result.  A quarter of the UK businesses included, which have over 200 employees, have spent £100,000 on preparing their supply chains.