Guest Blog - A Bullet-Proof Brexit Supply Chain Health Check

As we draw closer to the Brexit date of the 29th March, and with the increasing possibility of a no-deal Brexit, we are seeing more and more businesses panicking. For many, the implications of a no-deal Brexit can mean a sudden shift in their daily activities and a need to change many of their purchasing or supply chain processes. For others, it poses a serious question of whether their business will remain profitable and viable if Brexit results in significant changes in rates and duties or customer behaviour. If you are hearing the phrase ‘Get Brexit Ready’but you’re not sure what that means, if you are feeling concerned that you haven’t made adequate plans, or if you’re unclear on what the potential changes may be, then our 20 point checklist is for you. Before you start: It is fundamental that you and your management team have devoted time to consider the potential consequences of Brexit – direct or indirect – on your businesses. You’ll also need to share your plans with your Board of Directors (if you have one) If you haven’t already done so, schedule some time to do that now!

Brexit Supply Chain Health Check: how bullet-proof are you?

1. Have you obtained AEO certification or equivalent or are you currently on the journey to achieve AEO status?  (The standard time required to achieve this is around 3 months but can vary dependant on the information that  you have.)
2. Have you communicated your plans for Brexit with your customers?
3.  Have you agreed on any new arrangements around managed inventory or consignment stocks with suppliers  or customers?
4. Have you received confirmation from your suppliers regarding their preparations for Brexit?
5. For those with employees from the EU27 – have you made sure that these employees know the next steps to  take to register as an EU citizen working in the UK?
6. Do you understand the limits within your supply chain that could affect supplier preparations? (For example, are there now new MOQs or LOQs for certain lines or products.)
7.  Have you reviewed your logistics and distribution contracts to ensure you will maintain a good level of service?
8.  Have you reviewed your inventory policies and updated these where necessary, or have you got new policies  agreed to implement as you see fit? Your inventory levels and parameters are sufficient to support your plans  for Brexit.
9.  Do you have sufficient knowledge in the business and documentation around customs, tax, VAT, import and  export processes to support you through a hard Brexit?
10.   Have you mapped your supplier and customer base – and considered how Brexit could impact the trading  relationship?
11.   Have you reviewed any contracts you have with your customers which include penalties for late delivery? Have you discussed any new arrangements, reductions, or agreements for shared inventory ownership, to  avoid delays and being struck with large fines as a result of potential Brexit delays?
12.   Do you know the HS codes (international classification system) for your products and the EU MFN tariff that is applicable for your product?
13.   Have you applied for relevant travel permits, passports and documentation for all of your drivers?
14.   Do you have the information and documentation around proof of origin for all products that you supply? Have  you asked your suppliers for this and received all the information?
15.   Have you modelled the impact of future currency fluctuations to understand where you may be vulnerable?
16.   Have you ensured that you are aware of any changes you may need to make to protect your Intellectual  Property (IP) after Brexit?
17.   Have you registered for a UK Economic Operator Registration and Identification (EORI) number?
18.  Have you got sufficient financial funds in place to manage a no-deal Brexit? (A no-deal Brexit will mean that  VAT and tariffs will be payable at the border in order to release your goods. You may need deferment accounts,  for example, to manage this but there is also likely to be an increase in workload to manage these payments.)
19.   Do you know the total spend on ‘additional’ or ‘emergency’ logistics and freight services in the last three years  and for the next 12 months forecast, which also considers any Brexit impact?
20.   Have you confirmed that any backhaul or reverse logistics agreements currently in place will not be in  violation of the current Cabotage law OR have made alternative arrangements for these journeys? (At present  you are allowed to carry out a maximum of 3 Cabotage jobs in any 7 day period in certain Member States and  may also have to register for and pay VAT in the country where the Cabotage journey took place).

About our Guest Blogger: Rachel Sellers is a Principal Supply Chain Consultant at Industry Forum, helping Supply Chain, Logistics and Operations professionals cut costs, increase efficiency & improve service through training, consultancy & project management support. Or if you need help putting together a Brexit-Proof procurement and supply chain recruitment strategy, why not contact Cast UK via our ‘Contact Us’ page, call us on 0161 825 0825 or email hello@castuk.com?