Businesses either side of the English Channel are preparing contingency plans which could sever supply chains between the UK and EU, according to the Chartered Institute of Procurement & Supply (CIPS).
A survey conducted by CIPS of 2,111 supply chain managers found that 45 per cent of EU businesses with UK suppliers are already seeking alternative local suppliers in case a decent post-Brexit trade deal doesn’t materialise.
32 per cent of UK businesses who work with suppliers on the continent are actively looking for alternative suppliers based in the UK as a response to the referendum, and almost half (45 per cent) of EU businesses who work with UK suppliers are in the process of finding local replacements.
Meanwhile almost two thirds (65 per cent) of UK businesses have seen their supply chains become more expensive as a result of the weaker pound and 29 per cent are renegotiating contracts as a result.
Commenting on the findings, Gerry Walsh, Group CEO, CIPS, says: “The reshoring of British supply chains in advance of Brexit could provide an excellent opportunity for small businesses looking to win new contracts, but it also comes with significant challenges. Brexit is likely to bring considerable costs for businesses in the UK and Europe; these costs are then going to be passed on to small suppliers and eventually consumers.”
Our experts are Beavis Morgan work with businesses across a range of sectors, assisting them with implementing effective risk management procedures and working together to enhance business growth and optimisation.
For further information or to arrange for a no obligation preliminary meeting to discuss how we can help you and your business, please contact please contact Steve Govey or your usual Beavis Morgan Partner.
Further reading: Businesses must keep a constant lookout for risk factors in their supply chains