How to minimize gaps in your supply chain after Brexit
Originally written by Daniel Baker about Small Business
Since the final Brexit date on December 31, companies across the UK have had to quickly familiarize themselves with the new trade agreement and adjust their supply chain accordingly.
Unsurprisingly, this wasn’t without a break.
The first two months after Brexit have proven incredibly challenging for many UK businesses due to the lack of trucks and freight forwarders available to transport goods across the border and gaps in understanding of the new legislation across the supply chain.
> See also: Half of small business exporters struggling with new rules after Brexit
At Origin, we import some of the parts used to make our aluminum doors and windows from the EU. Hence, after the contract was announced, access to these materials was our primary concern. Like many companies, we had plans for a variety of possible scenarios to anticipate this, many of which have proven invaluable in the months after the deadline.
However, as Covid-19 taught us in 2020, it is impossible to prepare for all eventualities and we have had to quickly cease operations in some areas of the business to adapt to the effects of Brexit that we did not expect.
“The first two months after Brexit have been incredibly challenging for many UK companies.”
Here I examine some of our key takeaways and share my advice on how to avoid disruptions in your supply chain as companies across the UK and EU continue to adapt to the new Brexit rules and regulations.
# 1 – Train yourself and your team
My number one advice to other companies importing and exporting to the EU, especially those who felt unprepared for the business, is to learn all about the new legislation and how it will affect your organization as soon as possible . It is important to research all elements of the business that could be relevant to your business, from new customs regulations to your employees’ right to work, and should you employ EU citizens.
It is important that all of your workforce understand the new requirements. So invest in training for the entire team, not just the executives who have direct contact with your suppliers. There is tons of support and advice for those in need, including expert advice and trainers who can coach you and your team to ensure you have the knowledge you need to advance international trade.
> See also: The fashion industry is struggling to survive due to the bureaucratic burden after Brexit
# 2 – Train your suppliers
Once you are armed with the knowledge you need, you will take responsibility for coaching each of your suppliers to ensure they understand the new trading rules and their requirements equally well. This can easily be overlooked if your focus is on familiarizing yourself and your staff with the new regulations, but it is important.
Indeed, a lack of understanding of the new legislation among our EU suppliers is one of the main challenges we faced in the months after Brexit and which we did not anticipate. For us, like many companies, this slowed the process down and upset the delays we were already experiencing due to the disruption caused by Brexit.
If you work closely with your suppliers to ensure that they have a good understanding of the new processes, you can effectively protect your company from such challenges. Training should be thorough and cover everything from pallet marking to documentation. While this requires an investment of time and resources in the short term, it is invaluable in avoiding harmful delays in your supply chain later.
# 3 – Perform a full supplier audit
If you are importing from the EU, you can also use the process of coaching your suppliers as an opportunity to conduct a thorough review of each company you work with. This allows you to identify potential weaknesses that can cause delays later. Once identified, you can focus on stockpiling the products of the suppliers that you expect could cause delays in the future to make sure you are protected from them.
# 4 – Create contingency plans for transportation
In addition to the disruption caused by suppliers, an immediate and severe shortage of containers and carriers in the weeks following the deadline surprised many companies and caused disruption to thousands of organizations. While this problem is gradually easing, the availability of transportation is still not at pre-Brexit levels. It is therefore important to stick to the contingency plans. For my Origin company, this means being willing to pay short-term premium rates for transportation if necessary. We have also developed plans to book our own transport or even rent trucks and send our own team across the border if necessary.
# 5 – storage supplies
The experience of the pandemic has taught us a valuable lesson regarding the importance of stockpiling raw materials in order to survive Brexit disruptions in the supply chain and continue to deliver on time and in full to our customers. This was a practice we continued given the uncertainty surrounding Brexit. For Origin, our primary goal is to always support our customers so they don’t miss an installation day. This investment in additional inventory has proven crucial to enable us to do so in the first turbulent weeks after the Brexit deadline.
While the initial delays caused by Brexit could ease, great uncertainty remains for those importing and exporting from the EU as travel restrictions on Covid-19 and vaccine differences remain in place. It will be important for all businesses to hold a buffer of storage for some time if they are able to. Of course, there are some companies that don’t like this. B. Fashion brands whose inventory is quickly becoming out of date. For companies with a stable range of products and the resources at their disposal, there is currently no better way to invest than to create a storage buffer that can serve as a safety net for future unexpected challenges.
Daniel Baker is managing director at origin, a manufacturer of aluminum doors and windows
Further reading on Brexit
How Brexit will affect your company – Import No. 1
How to minimize gaps in your supply chain after Brexit