Supply Chain Relationships
The EU-UK Trade and Cooperation Agreement, now in place, means change. It will require adapting to new trading arrangements, rules and regulations. This information will provide guidance on how to analyse and manage your supply chain relationships.
There is likely to be a mutual desire and interest to maintain relationships, as a result, getting to know your suppliers can bring significant benefits. Some relationships will be more important than others so identify the highest risk relationships. We’ve provided some guidance on how to strengthen relationships.
Analyse all contracts carefully
Take time out to look at the agreements you have in place and take advice on any terms that you’re not sure of. Suggested actions: You should consider reviewing, and where appropriate, amending contracts so that they can be more prepared for the impact of Brexit on their supply chains.
Talk to your suppliers regularly
Communication is key to a healthy relationship. If relationships are strong they can often withstand change, however, this will require flexibility and mutual understanding and possibly re-negotiation. Therefore, it pays to invest time in building good relationships with your suppliers. Suggested actions: The first basic steps are to talk to your supplier, this could be picking up the phone or by starting to arrange meetings or reviews.
Be open with suppliers, listening to any concerns they may have and involving them in your processes. Create a culture of sharing news, both good and bad. If you expect you might miss a deadline or can’t pay on time, let your suppliers know, ideally with as much notice as possible. Suggested Actions: If you think you cannot pay on time, start discussions on your payment terms. Some agreed flexibility in payment terms may be a solution for any uncertainty of Brexit in the supply chain.
It will be important to clean up existing data and prepare processes and systems to collect and store the customs information that might be required under new trading agreements. This is where ensuring that all back-office processes are digitised will help. Suggested Actions: In a cross-border environment, be sure you aren’t relying on, for example, your UK supplier for labeling or marking post-Brexit. Another example is to take necessary steps to ensure compliance with rules on transferring personal data cross-border.