The Supply Chain Conundrum for SMEs

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With Britain's exit from the European Union now less than one year away, you'd be forgiven for thinking that both parties would be engaged in productive negotiations.

This is not necessarily the case, however, with complex issues such as the Irish border and Customs Union membership making it difficult for the UK government to adhere to a single negotiation position.

Meanwhile, a host of markets and business process continue to be impacted by the spectre of Brexit, with the international supply chain one of the most prominent considerations. Make no mistake; the UK's SMEs will need to fully audit their existing supply chains before March 29th next year, while implementing proactive chains that will help to reduce costs and maintain efficiency in the future.

Below, we'll look at some of the key considerations and ask how your small business should prepare its supply chain for a post-Brexit economy.

1. Identify any Hidden European Suppliers

When you audit your existing supply chain, one of your key areas of focus should be identifying any hidden European (or EU) suppliers.

The reason for this is simple; as while you may have core relationships with UK suppliers that appear to be workable post-Brexit these may be reliant on products or services that are subcontracted to an EU organisation.

Subsequently, you could find that your supply chain and operational costs rise exponentially after March 29th next year, while significant import and export delays may also be incurred.

It's better to identify such issues ahead of time, as this enables you to seek out new potential suppliers or take proactive steps to offsetting any cost increases (such as altering your own pricing). Regardless of what you find or how you respond, however, the key is to forensically examine your supply chain and clarify any problems.

2. Reduce Costs Wherever Possible in your Supply Chain

If you're a product-oriented company that boasts its own fleet and delivers products directly to customers, it's important not to lose sight of this stage of the supply chain.

Sure, this aspect of your venture may be in-sourced and therefore directly under your control, but it should still be audited to ensure that it remains as cost-effective and as efficient as possible.

After all, reducing the cost of financing your vehicles through reputable service providers such as the AA can drive significant savings in your business, which may in turn help to offset the introduction of additional tariffs or rising fuel prices post-Brexit.

This creates a form of financial contingency, and one which can directly tackle any fiscal or economic challenges created by leaving the EU.

3. Embrace Technology to Optimise your Supply Chain

For any SME with a cross-border supply chain that includes EU suppliers, there's no doubt that the logistical side of your operation will be complicated post-Brexit. After all, you'll either need to incur additional costs and red tape in order to work with your European partners, or be required to seek out new suppliers and potentially convoluted shipment routes.

This can create huge inefficiencies, and one potential solution is to invest in new technologies and innovations wherever possible.

Automating aspects of your supply chain can minimise long-term costs and simply processes, for example, while experimenting with decentralised ledgers such as Blockchain can create a transparent system for charting an entire product's history (from inception to delivery).

By also investing in technology that enhances shipment tracking and vehicle (or more specifically fuel) efficiency, you can also improve your supply chain so that it is able to cope with new partners that exist outside of the EU.

 

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