Inventory planning and Brexit
Brexit provides an opportunity for businesses to consider the information they hold on their supply chains/inventory as well as their approach to continuity planning. Read our guide to assist you in balancing the costs of these exercises with the potential benefits.
What the guide covers
Why could Brexit impact inventory?
It is not yet clear whether the UK’s exit from the EU could have a material impact on businesses’ ability to replenish inventories or to use/sell items held in inventory on the date of exit. The UK government considers a ‘no deal’ Brexit ‘unlikely’. But if the UK was to exit the EU with no deal it is unclear whether port delays/restrictions might materially interrupt the flow of goods to and from the UK.
In our guide we do not speculate on the probability of a particular outcome. Rather we suggest that businesses approach inventory planning as a business process with broader costs and benefits – and make risk-based decisions on this basis. As we explain below, there are good reasons why businesses may wish to improve information on their supply chains and make contingency plans for inventory disruption. These exercises might be conducted entirely separately from Brexit planning. Equally, Brexit provides an opportunity to consider these issues and to demonstrate that a business can address them smoothly and competently.
Page last updated
14 January 2019
Inventory planning does not imply that a business will necessarily purchase incremental supplies. That might be one outcome, but equally, understanding supply chains better has the potential to deliver a range of business benefits. From that perspective, thoughtful supply chain planning might actually be expected to deliver efficiency gains.
Why should I consider inventory planning?
There are many potential causes of supply chain disruption. Brexit is only one and might not be close to being the most severe for many sectors. In some sectors, such as harvested plants, disruption can be endemic, elsewhere spikes in customer demand may be more of an issue than interruption to supply, equally some sectors may never have experienced material disruption. Clearly, the effort spent on contingency planning should reflect the risk to the business of disruption; risk is a combination of likelihood and impact. But where there are material risks, the benefits of robust contingency planning are clear. Brexit provides an opportunity to reconsider continuity planning and may offer a rare window of organisational attention to get it done.