Executive Briefings

A Third of UK Firms Plan to Sever European Supply Chains

Firms in the UK and Europe are already drawing up plans to sever supply chains across the Channel to avoid post-Brexit tariffs.

A survey of more than 2,100 supply chain managers, carried out by CIPS, found a third (32 percent) of UK businesses that use EU suppliers are looking for British replacements. Meanwhile, almost half (46 percent) of European firms expect to reduce their use of UK suppliers.

“Diplomats either side of the table have barely decided on their negotiating principles and already supply chain managers are deep into their preparations for Brexit,” said Gerry Walsh, group CEO of CIPS. “Both European and British businesses will be ready to reroute their supply chains in 2019 if trade negotiations fail, and are not wasting time to see what happens.”

So far, currency fluctuation has been the most pressing challenge for UK firms and two thirds have seen their supply chains become more expensive as a result of the weaker pound. Almost a third (29 percent) have renegotiated some contracts as a result.

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A survey of more than 2,100 supply chain managers, carried out by CIPS, found a third (32 percent) of UK businesses that use EU suppliers are looking for British replacements. Meanwhile, almost half (46 percent) of European firms expect to reduce their use of UK suppliers.

“Diplomats either side of the table have barely decided on their negotiating principles and already supply chain managers are deep into their preparations for Brexit,” said Gerry Walsh, group CEO of CIPS. “Both European and British businesses will be ready to reroute their supply chains in 2019 if trade negotiations fail, and are not wasting time to see what happens.”

So far, currency fluctuation has been the most pressing challenge for UK firms and two thirds have seen their supply chains become more expensive as a result of the weaker pound. Almost a third (29 percent) have renegotiated some contracts as a result.

Read Full Article