in Law, Procurement, Public sector, Supply chain24 June 2016
Buyers in the UK should brace themselves for change and uncertainty as the country votes to leave the European Union.
After the UK voted 52% to 48% in favour of lea ving the European Union, procurement professionals are already considering how changes to the UK’s relationship with Europe will affect their supply chains.
The value of the pound has plummeted, stock markets are volatile and the UK faces an indefinite period of negotiations with the EU and other trading partners.
“There now starts a long period of uncertainty while decisions are made about the UK’s future relationship with Europe,” said Daniel Ball, director of e-procurement provider Wax Digital.
While we may have to wait “before individual organisations can make decisions on their future supply management strategy”, Daniel suggests procurement professionals should start reviewing their supply chains now to understand which suppliers could be affected if the UK fails to agree a new free trade agreement with the EU.
Buyers for small and medium sized businesses might face other price changes as a result of the vote, said Phil Foster, managing director of Love Energy Sa vings.
“With the possibility of rising energy prices, small business owners should look to cut back wherever they can,” said Foster, suggesting “greener LED light bulbs, installing bigger windows… or adding movement detectors to turn off your lights automatically”.
Foster also flagged potential increase in airfares and changes to the recruitment market.
While the UK might no longer be “the talent magnet it used to be”, Brexit could create more more options to recruit from non-EU countries such as India and China. “Great news for those seeking STEM [science, technology, engineering and mathematics] candidates,” said Foster.
Others are less concerned about the immediate future for buyers.
“It’s unlikely that the UK will immediately move away from the international agreements that the EU has,” said Milan Panchmatia, managing partner at consultancy 4C Associates, but added it was “likely that the administration of imports… will become much more complex”.
“The message at the moment is ‘business as usual until told otherwise’,” said Emily Heard, head of procurement at law firm Bevan Brittan.
Brittan added that many EU rules around procurement, including those equal treatment, non-discrimination, transparency and proportionality “have been implemented by way of national legislation or regulations which remain binding unless and until parliament revoke them”.
“This will be played out in the months and years ahead,” she said.
Da vid Noble, group CEO, CIPS, said: “At this early stage we are unable to tell the true impact of Brexit on the procurement and supply profession as well as the knock-on effect to legislation such as the EU procurement directives.”
“As a global organisation we are supportive of global trade. Our members are based in over 150 countries and we work with corporates and governments from all round the world to ensure the procurement profession has a positive impact on the global economic, social and environmental agenda.”
“Over the coming months and years as the landscape becomes clearer and we all establish a way ahead, we will continue to support our global community.”
