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Brexit Supplier Help

Over the past 12 months, the Brexit dial has moved ominously from safe ‘Soft Brexit’ impact to the unsettling ‘Hard Brexit’ scenario, with a worrying time more recently where it seems ‘No Deal’ is a possibility. Throughout this time, we have been working with businesses across the island, analysing their supply chain risks with feedback from the trenches including;

  • “My NI-based supplier is the holder of product authorisations under REACH” – Paint Producer, Cork
  • “Our supplier has a factory in Naas and Leeds – I presume our products are coming from Naas?” – Food manufacturer, Sligo
  • “Our biggest customer is also our biggest supplier, based in Bristol” – Aviation Maintenance, Shannon
  • “We have a UK agent who is the sole distributor for UK & Ireland” – Motor Factors, Carlow
  • “Our suppliers are in mainland Europe but it’s a bulky product shipped via the UK” – Wholesaler, Athlone
  • “I have just realised 80% of our raw materials comes from the UK or NI” – Cleaning Company, Leitrim

Brexit is another business risk and Arvo use strategic sourcing techniques to reduces costs and risks associated with Britain’s exit from the EU, while defining appropriate sourcing strategies so as there is minimal interruption to our client’s supply chain.

Arvo provide strategic sourcing consultancy and have delivered practical workshops & training, specifically focusing on Brexit supply chain risks and helping SME’s answer questions such as; 

  1. What suppliers will impact the business most if they cannot supply you tomorrow?
  2. Do you know what % of your goods and services are coming directly or indirectly from the UK/NI?
  3. Have you researched alternative non-UK suppliers?
  4. Are there contracts, licenses or regulations restricting your global sourcing strategies?
  5. Are you aware of the potential additional costs to import from Europe in terms of hubbing, customs, logistics partners, Minimum Order Quantities plus the impact on cash flow?

Therefore, let us know today how we can help build resilience into your supply chain for Brexit (& other Political, Economic & Technological events that may cause risks for your business in future).

The outcomes from an Arvo engagement include a Strategic Sourcing Plan, a completed Kraljic Analysis defining your strategic and bottleneck suppliers while we have also created a Sensitivity Analysis Tool to analyse how the different values for a set of independent variables (costs) affect a dependent variable (price/margin) under certain specific conditions (Brexit).

Take note of these Brexit Planning Tools and Resources, to reduce your Brexit exposure.

Finally, Arvo are working with Enterprise Ireland, InvestNI and Intertrade Ireland, who all have Brexit supports to help you on the journey to develop your contingency plan;

Contact Us or the agencies above to get support for your Strategic Sourcing Brexit risk

Brextension – Current Brexit Status

On April 10, 2019, the latest Brextension was formalised with the EU offering the UK a six-month Brexit delay, pushing the withdrawal date to Halloween. This six-month extension was a compromise solution which stopped the clock on a no-deal withdrawal occurring at the end of the first Brexit-extension in April 2019.

The UK agreed with the EU by extending Article 50 until October 31 2019 at the latest, whereby during the course of the extension, the UK will continue to hold full membership rights as well as its obligations. The EU has agreed that the extension can be terminated if the Withdrawal Agreement is ratified within the UK. If the Withdrawal Agreement is ratified by both parties before 31 October, the withdrawal will take place on the first day of the following month i.e. Brexit could occur on July 1st, August 1st, September 1st, October 1st or most likely October 31st (which incidentally is the only date on which a no deal exit could happen).

As the UK did not ratify the Withdrawal Agreement by the 22 May 2019, they were legally obliged to hold European Parliamentary Elections on May 24th.

Although Parliament has rejected leaving without a deal multiple times, no deal remains the legal default at the end of the extension period if a deal cannot be agreed. If the Withdrawal Agreement can be agreed, this offers a time-limited implementation period providing a bridge to the future relationship and common rules will remain in place i.e. businesses trade on the same terms as now until the end of 2020.

Contact Us ([email protected]) to get support for your Strategic Sourcing Brexit risk

Strategic Relationship Management Advice

By Pat Ryan – Arvo

Your suppliers are your external manufacturing department. They do what you don’t want to do; because it’s technologically impractical, they are better than you, you are concentrating on other things, or it could tie-up your resources.

FACT: You are trusting them with your future

Developing good connections with suppliers—sometimes called Supplier Relationship Management—is critical to business success.

Businesses are increasingly relying on suppliers to help reduce costs, innovate, improve quality and reduce lead time. Good relationships with suppliers can provide a competitive advantage.

First-rate supplier relations require continuous, long-term effort. Not all suppliers should be treated as special suppliers. Some of the suppliers may not be suitable for developing relationships.

  1. Evaluate all suppliers—Make sure they are the best ones for your business and that their products meet your needs. You want suppliers who are aligned with your strategy.
  2. Integrate key suppliers into your business—Learn how they operate, and make sure your systems work seamlessly with theirs in areas such as invoicing and order fulfilment.
  3. Collaborate on quality improvement, problem-solving and product development—Work together to improve capabilities and adopt best practices on both sides.
  4. Measure performance continually—Have structured ongoing discussions with your key suppliers about how to improve.

Ultimately, the idea is to work together as partners so both sides prosper.

BE BRAVE – NOT ALL COMPANIES CAN DEVELOP AND MAINTAIN A SUPPLIER RELATIONSHIP PROGRAMME.

Sometimes companies focus just on the short term and only demand cost reductions from suppliers, rather than thinking strategically. That doesn’t help in the long run.

Do’s and don’ts of supplier relationships

  1. DO—Take a long-term approach to supplier relationships. Commit to shared prosperity and mutual development. Help suppliers boost their technical and problem-solving capabilities.
  2. DO—Understand in detail how your key suppliers work. See how they operate, and learn their culture to ensure mutual trust and strong partnerships.
  3. DO—Periodically evaluate the performance of key suppliers with scorecards, and periodically scan the market for better and/or more cost-effective alternatives. While you want to nurture strong relationships with suppliers, you don’t want to become captive to them.
  4. DON’T—Focus only on short-term goals, such as cost-cutting. Don’t insist on unreasonable payment terms or pressure suppliers to assume the cost and risk of holding the bulk of your inventory.
  5. DON’T—Focus your efforts on all your suppliers. Save your special collaboration for only a handful of key strategic partners. Anything more is unsustainable.

GDPR Post Brexit

A lot has been said and written on GDPR. At a time when we are just beginning to grasp the fact that ICT cannot be without GDPR, mainly due to the ‘consent’ email bombardment, comes Brexit and the uncertainty of it in relation to GDPR as it is an EU regulation. People and businesses are asking ‘’what will GDPR be like post Brexit?’’ Fortunately, a lot of articles have been written and discussions are going on from different perspectives, GDPR post Brexit won’t be a scenario of ‘’ how to manage your expectations during the first few days, weeks, months of dating’’ rather it is a subject of forward looking, information gathering, be in the know of suggested options especially for companies dealing in B2C or even B2B in case data management dealings don’t go according to plan.

Before going further, here is a brief recap on GDPR for those who need it. In the beginning, the European Union adopted the DGPR (2016) as an EU law on Data protection to provide privacy for all individuals in the EU and the EEA. The regulation which became enforceable beginning of May 2018 has two main priorities, to; give individuals control over their personal data and, to; simplify the regulatory environment for international businesses by unifying the regulation within the EU. GDPR also addresses export of personal data outside the EU and EEA. With Brexit in sight, this is where GDPR post Brexit questions arises, with UK about to become a third country, will the Britain abide by GDPR? What guarantees are there in terms of data privacy? – Whether in terms of B2C or B2B. Individually, people and businesses alike are researching the topic and informing those who are anxious.

Looking for Answers

Questions and answers have been suggested, with the amount of publications on the topic, we are becoming bombarded again. My opinion is to answer GDPR questions whatever perspective, we must go to the heart of GDPR – the principles (the core conditions that governs the regulation GDPR (2016/679) especially the 7th “Accountability”.

ICO wrote about GDPR principles, to be;

  1. Lawfulness, fairness and transparency,
  2. Purpose limitation,
  3. Data minimisation,
  4. Accuracy,
  5. Storage limitation,
  6. Integrity and confidentiality (security),
  7. Accountability.

Monique Magalhaes of Techgenix, in January 2018 wrote and highlighted that – ‘’organisations need to follow these principles when collecting, processing and managing European citizens personal information regardless of whether the business is in EU or elsewhere in the world.’’ I believe this explanation applies to Britain once it becomes third country.

According to another website tripwire.com; there might be a common misapprehension which might be a wishful thinking for some British businesses who don’t want the hassle of achieving GDPR compliance, thinking that UK businesses might not need to comply with GDPR post Brexit as it is an EU regulation. The fact is, currently the UK adopted all the rules of the GDPR into the Data Protection Act 2018 – which means that UK businesses will have to continue complying with the GDPR after Brexit and those that deal with EU citizens have to comply with GDPR directly.

Important for UK businesses to remember; compliance with the key principles is a paramount building block for good data protection practice for those involved. Failure to comply with the principles may lead to substantial fines. Article 83(5) (a) states that infringements of the basic principles for processing personal data are subject to the highest tier of administrative fines. This means a fine of up to €20 million, or 4% of your total worldwide annual turnover, whichever is higher.

Brian Honan of independent.ie writes; GDPR and Brexit will potentially bring many challenges to organisations over the coming years, but proper planning and keeping abreast of how talks regarding data protection post-Brexit will help keep on top of those challenges. This suggests that businesses and the concerned alike need to keep eyes open for the future is unclear.

For more information visit the pages referred;

https://www.dataprotection.ie/

https://www.independent.ie/business/data-sec/gdpr-will-the-uk-still-be-a-safe-place-for-your-data-postbrexit-36741468.html


Contact Us with related queries or to get support for your Strategic Sourcing Brexit risk
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