Negotiations between Brussels and Whitehall are rumbling on with little sign of a breakthrough. As the clock continues to tick, any signs of a deal being struck are looking increasingly unlikely.
Some public and private sector organisations are biding their time, waiting to see the terms of an exit agreement before they invest time and money putting contingency plans in place. Others may have the desire to get on the front-foot but are unsure of what action to take or lack the capacity to deal with the task ahead.
Whatever the situation, businesses should use the little time we have left to assess the impact of change on their supply chains and position themselves to respond to the outcomes after October 31.
Efficio has developed a bespoke EU exit impact methodology which organisations can implement now – well ahead of the Brexit date.
Our methodology focuses on three core pillars of procurement: sourcing strategies, current suppliers and existing contracts.
1. Sourcing strategies
We review your existing category strategies to understand category objectives, sourcing strategies and the pipeline of work. We identify which elements will be impacted by the EU exit and, where this impact is significant, we provide actionable recommendations on how to take account of EU exit activity in your category plans.
We present our findings and recommendations to stakeholders in workshops to agree proposed changes to category strategy. Recommendations may include, for example, using existing frameworks to maximise leverage with suppliers or challenging volume and specifications through inventory and demand management. Once agreed, we develop an implementation and communication plan to embed the strategy.
We engage your suppliers and assess the wider market to pinpoint cost and risk drivers in key categories. Suppliers are encouraged to review expected pressures resulting from Brexit, their current mitigation plans and their view of the company’s main risks.
Market risk, cost pressure and supplier concerns are fed into Efficio’s review framework to calculate the potential cost impact and shared with commercial teams. We agree cross-contract risk mitigations with workstream leads and engage suppliers in the implementation of business continuity plans.
A clear understanding of your contract risk profile is essential. Through interviews with your contract managers and using our EU exit risk assessment framework, we can identify your risks against a hierarchy of needs. Examples of potential risks may include EU funding reliance, lack of freedom of movement restricting labour availability and driving wage increases or foreign exchange and tariffs creating cost pressure. We examine key contract clauses linked to EU exit readiness, such as termination, cost pressures and continuity resulting from legal change to determine where further risks may lie.
We discuss and agree recommendations with contract managers – including on areas where there are systemic contractual risks across the supplier base.