Advice from Ferrero on Brexit Planning and Supply Chain Risk – SME Preparedness Is Critical!

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You may have read our post on Edbury Daley’s workshop at eWorld in March ‘Brexit Contingency Planning at eWorld – Or Lack of It.’ Andrew Daley led a session on Brexit preparedness in organisations: he was keen to find out the stages of preparations, what the key concerns were and the barriers to ‘being prepared,’ along with looking at what shape the changing demands on skills and supply chains might take.

The biggest concerns, from around the room of mainly manufacturing industry representatives, appeared to be about their ability (or inability) to continue to deliver at the same level post-Brexit; how frictionless movement of people and goods will be impacted and then impact their business (thinking about the amount of contingent, often seasonal, and EU-member staff they employ on their workforce) and regulatory alignment.

But when asked what they were trying to do, or what measures or processes they were putting in place, to help stem the tide of (Brexit) chaos, answer came there none – well, answer came there only one! Procurement Director, Bryan Towell from Ferrero UK Ltd, the UK’s fourth-largest chocolate company, said they’d been turning their thoughts to mitigating the risk to their business since the ‘Leave’ vote was cast.

That’s not to say that other firms, including those present in the room, were burying their heads, or not concerned, or not thinking about risk-related strategies, but what came through was an overarching feeling of uncertainty, not knowing where or how to start when you have no idea what the outcome is going to be, and therefore, what exactly it is you are preparing for. It certainly would seem a conundrum.

Looking for an answer, we approached Ferrero UK’s procurement leader to ask how, in fact, his firm is steering its preparations, and for companies not yet off the starting blocks, what he thinks they could be doing to help remedy this confusing and rather tricky situation. And, fortunately, he was able to catch up with us for a post-event chat.

He explained that for him, and his business, one of the biggest concerns is for their supply chain, including the smaller firms, and how they are dealing with this very question.

“While a global multinational like us might have dedicated teams looking at the effects and implications of Brexit on the business and the supply chain, and of course the industry as a whole,” he explained, “our biggest concern is for the small and mid-size firms (SMEs). They are the engine room of the economy and paramount for the successful delivery of larger firms’ goods and services. If they are not adequately prepared, either because they are not well enough informed of Government plans, or well advised, or simply don’t know where to begin, or if they are thinking maybe it doesn’t affect them because they only deal with UK suppliers for example, then that’s a concern for us — because it will affect everyone.”

So what could SMEs be doing to prepare, if they haven’t already?

“Well – it’s really time to start thinking about the possible impact.” he said. “We are always thinking about our next activity in terms of risk mitigation, and we would advise them to be doing the same, even if it’s just understanding what is available to them to help address the issues that might be forthcoming. It’s always good to start with communication – talk to your relevant representative trade bodies, understand the Brexit priorities for your industry and how they are being represented to Government.”

“It’s also vital to be talking directly with your suppliers and customers – get an ongoing dialogue started about their priorities, how might they be affected and what do they think you could be doing. Are you, and they, thinking about which goods might attract tariffs, or be subject to higher levels of border control and customs processes and interventions? That’s certainly what’s important to me and my business, that’s what I would want to know.”

And these conversations need to be happening now – that really was his key point. Even though you can’t plan for everything, what you can do is turn your attention to what the most likely outcome (or perhaps a small number of different outcomes) could possibly be.

(Tune in for more thoughts and advice in Part 2 tomorrow).