October 19, 2017

What do Procurement Professionals think of Brexit?

CIPs have recently come out with an interesting study into how procurement professionals are tackling Brexit.

Understandably, there are positives and negatives, as with anything of this magnitude.

That being said, it is important to note that the survey was conducted before the results for the most recent election came out and as such all those responding would have presumed that the UK would now be in control of a stronger hand.

Frustratingly, the report or at least the introduction does indulge in the use of the lazy phrase that is ‘hard Brexit’. Despite this, it is an interesting read and I’ll pick out a few of the findings here that caught my eye.

At this stage, currency fluctuation is the biggest issue for businesses with 65% and in second place we find Brexit, but only ‘in due course’ at 34%. It’s also a little irritating when it comes to considering next year’s holiday, but there we go!

Back to the supply chain. The world of procurement is bound to be affected more than most business areas, given the global nature of supply chains and specifically the EU/GB supply chains where decades of free trade are potentially coming to an end. It’s not only companies in the UK that are worrying. Our neighbours in the EU are also planning for a number of different scenarios, whether a deal is achieved or a clean Brexit is the outcome with the United Kingdom, by and large returning to WTO rules. (It seems unlikely that that will be the long standing relationship, even if it is the starting point. Any trade deal would also be achieved far more quickly than a typical EU trade deal of six to seven years given the identical nature of our rules and regulations.)

Happily, despite this great challenge, ‘almost three quarters (72%) of supply chain managers, felt they had the skills needed to minimise supply chain disruptions caused by the Brexit process. As procurement professionals with a big responsibility for a company’s spend and guardians of their own enterprise, this will be some relief for the organisations they work for’.

That being said, the big request from procurement leaders to the government is to do everything possible to keep down any tariffs and quotas that may come into existence. 39% of respondents prioritising this whilst 25% are hoping that red tape doesn’t start to creep. Generally speaking it stands to reason that most organisations will be hoping that any unnecessary red tape can be cut quickly.

Interestingly, when the survey touches on free movement only 16% of respondents highlighted the need to ensure that obstacles were kept low on immigration.

Throughout the publication there isn’t a huge amount of faith in the UK negotiation team, understandable given the lack of British negotiators. There has been no need for them to exist for decades. In the public sphere anyway. That being said, help has been offered from Australasia and there are a number of respected negotiators in the private sector that may be persuaded to move across. 32% considering this a big worry is hardly unsurprising.

Ultimately, it makes for fairly good reading, procurement leaders are confident in their own abilities and are setting up numerous contingencies so as to be able to tackle whatever deal or no deal becomes a reality. With 86% of respondents saying that global supply chains will be the crux of the global economy in the medium/long term let’s get behind our procurement professionals.

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