On 24 December 2020, the European Union and the United Kingdom reached an agreement in principle on the EU-UK Trade and Cooperation Agreement.. Content on the site is being monitored to reflect this and the changes.
There are actions that you can do to protect your supply chains to put you in the best position possible.
Step 1: Getting Started
A supply chain map is important as it shows the path supplies take from raw materials to manufacturers to consumers and afterwards. It provides a quick visual overview of the flow of goods and will help with identifying how to accelerate or control supply. It might also identify excessive costs and lead times which may have been previously hidden in a complex chain. This information will cover the three areas listed below.
Supply Chain Mapping
Efficient supply chain mapping could save your company money and time and reduce risk.
Be Aware of Timings
There are some time sensitive actions (provided within this information) that you may need to take now
Revisit accurate sources of information, such as government websites and sign up to email alerts to stay up to date.
Let’s now move onto mapping your supply chain. A supply chain map shows the path supplies take from raw materials to manufacturers to consumers and afterwards. It provides a quick visual overview of the flow of goods and will help with identifying how to accelerate or control supply. It might also identify excessive costs and lead times which may have been previously hidden in a complex chain.
Get started with supply chain mapping with pen or paper or use your computer. Start with a key product. Try to show the links between the supply chain stages, from supply, manufacturing and distribution. Repeat for all products. Crucial to this is to investigate your supplier’s supplier to determine the ultimate source of the product. Take this example:
– Sarah owns a pizza business based in Cavan.
– Sarah gets pizza bases from a supplier based in Dublin.
– Based on this Sarah assumes these goods are trade cross border, which according to the proposed Brexit deal would not be impacted.
– But when Sarah starts a mapping exercise by asking the pizza base supplier where they got their raw ingredients from, it was revealed that the flour comes from Bristol.
This means a trade flow into Great Britain (across the border in the sea) which may impact costs, for example, possible paperwork or checks resulting in direct and indirect costs.
Click here for an example.
The next important step is to take the supply chain map and determine where you and your suppliers import and export goods to and from (for example, from Ireland, Northern Ireland, Great Britain or from the rest of the world. This will be very important information to know for a number of reasons, some examples:
Checks or paperwork: Should any checks or paperwork be introduced, you’ll need introduce these new procedures.
Regulations: With the UK leaving the EU, what regulations are associated with the goods based on their location?
A good contingency plan will not only allow a you to successfully react to any problems. We’ve listed some examples:
– Stock up on essentials: If possible holding some extra stock is a good strategy, for you and your customers.
– Near-sourcing: If possible deal with suppliers physically close, as it can reduce delivery lead times.
– Supplier Audit: Perform a full risk assessment of suppliers. Audits do not have to be performed for all suppliers, but at least for those suppliers that provide mission critical parts for the end-users.
– Investigate your supplier’s supplier: Determine the ultimate source of the product.
Step 2: Actions
Actions you can take now that do not depend on negotiations.
Identify contracts/binding commitments that go beyond 31st December 2020
For each relationship identify the delivery point, who is responsible any border requirements, cost or delay and identify the duration and exit options for existing contracts. This can be as simple as reviewing contracts or having a conversation with your suppliers.
Prepare for trading to or from Great Britain
It hasn’t been announced, what, if any check or papers work is needed fro cross-border traders to Great Britain, but we know what information is usually required. Click here for a quick and free guide on preparing for customs declarations from InterTradeIreland (with costs, videos and links to customs agents in Ireland and Northern Ireland).
Consider the impact of change in the exchange rate
Do you trade in Sterling and Euro?
Check the currency you invoice in. You can talk to your bank and ask them about hedging, an example of this is locking in the current exchange rate for a period of time.
Step 3: Stay Updated
Revisit accurate sources of information,
such as government websites and sign up to email alerts to stay up to date.
Getting Ireland Brexit Ready is a good place to start.
The UK Government website is a good place to start.