RT5: Brexit preparation and risk mitigation
- hosted by David Sprent, Independent Expert
  • Transient/temporary labour: concerns about availability and cost increase.

  • Truck drivers: concerns over shortage in UK and Europe, especially in peak times.

  • Skilled labour: quotas, shortages of talent Also concerns in recruiting middle management and particularly planners and similar supply chain experts…

  • People management was also discussed: the importance of retaining management and skilled people.

  • Exchange rate: some concerns, mitigated by hedging, not a long term issue (difficult to predict future exchange rates so businesses need to be wary.) Some try to ensure all UK incurred costs are paid in Sterling.

  • Ireland: concerns over increased transit time, possible infrastructure implications.

  • European Network: concerns over import times into UK from European warehouses plus over capacity and requirements of bonded/customs warehouses

  • Warehouse Capacity: short term capacity of UK network: companies looking to mitigate risks through increased inventory. Short term costs could escalate!

  • Ports: transit times at Ports, especially Dover. A push to free ports will be important in the light of customs regime, and free trade area divergence.

  • Customs processes: concerns over moves to establish bonded warehousing (both in house or with 3PL partners) and AEO application/status may be desirable.  HMRC approval a potential road block, meaning lengthier times to gain approval.

  • On shoring: concerns resulting from exchange rates and trade barriers. Comments about bringing manufacturing back (particularly high value add processes. Ie Change of drinks industry import model, bring in bulk then bottle in UK?)

  • Freight rates: concern on fluctuations, Ocean freight market particularly volatile, UK export capacity stretched and rates are being hiked

  • Channel link: tunnel link has proved problematical, limited capacity and restricted practices (ie major operators monopolise the capacity, and only smaller train slots can be sourced)

Useful sharing of Network Design experiences:

  • Example of successful network design study leading to major distribution re-structure

  • EG of network study being undertaken in attempt to prove the CEO’s theory. Result being the evidence misused - took the business down wrong path!

  • Case study on Cost2Serve study which proved successful, and still being used by sales and marketing to identify unprofitable customers.

Actions by participants:

Most companies at the Supply Chain operational level still ‘waiting’ for more clarity on the final agreement. Most understand their supply chain network, issues and risks - hoping to mitigate risks via inventory increases and re-routing of trucks. Some scenario planning going on but at high level.

Did appear that companies are using this as an opportunity to redesign networks, review product portfolios, look at possible regulation changes.

Majority of participants have not made formal risk assessments/presentations to Boards.

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