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Brexit

Take a look at what Brexit means for procurement and how to stay ahead of the game

What does brexit mean for procurement?

On the 23 June 2016, the UK voted to leave the European Union; a relationship that had lasted for more than 40 years. There are several key challenges procurement teams are facing since the end of Brexit in January 2021.

  • Border problems:
    Organisations are experiencing challenges importing and exporting goods. Consumers are also experiencing problems with EU (European Union) firms not delivering to the UK due to customs clearance and documentation issues.
  • Rule of origin:
    Regulations require that the origin of a single part or ingredient may impact the origin classification of a finished product and its tariff status.
  • Supplier relations:
    Supply chain delays, longer delivery times and warehousing times are increasing organisation’s costs. Some organisations may not be set up to survive the financial stress.
 

How does brexit impact public procurement?

On the 24 December 2020, the UK and the EU agreed on a new trade deal named, Trade and Cooperation Agreement (TCA). This governs the future relationship between the UK and EU on public procurement and many other issues. The TCA incorporates the World Trade Organisation Government Procurement Agreement (GPA) which was agreed by the UK government on 1 January 2021.

In summary the main implications are:

 

What should procurement professionals do?

Procurement professionals need to keep on top of the latest information regarding Brexit and it’s important to take active steps to maintain your resilience. Take a look at some practical tips and guidance to help navigate Brexit.

  • Audit your supply chain from end to end:
    Understand what you spend, who your suppliers are and build strong relationships with them to be agile and flexible.
  • Work together:
    Build cross-functional teams to monitor the situation, include risk management colleagues, compliance, financial, legal, operational, sales and marketing teams.
  • Prioritise:
    Understand and prioritise the likelihood of any risk impact and have a clear understanding of what this could be, who will be affected, why and where the impact will happen.
  • Review contracts:
    Don’t just look at contracts, also look at any future projects on the horizon.
  • Research issues:
    Research issues that affect your sector, business of your size and continue to monitor as the situation evolves and changes.
  • Communication:
    Develop a list of credible sources and arm yourself with data and timely, regular information. Keep stakeholders regularly informed, remaining clear and transparent about implications.
 

What is procurement?

Procurement involves the buying of goods and services that enables an organisation to operate their supply chains, in a profitable and ethical manner. Explore deeper into how procurement is defined, the role it plays and a how a career in procurement can benefit you.

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