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New Brexit Deadline, New Supply Chain Difficulties

From Our CEO

Pioneering Supply Chain Integrity

New Brexit Deadline, New Supply Chain Difficulties

By ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE

The United Kingdom had been scheduled to leave the European Union on March 29, 2019 — two years after it began the exit process. However, at this point, the withdrawal agreement has been rejected three times by UK members of parliament. The resulting six-month extension means Britain will now withdraw on October 31, 2019 — likely without a deal to ease its departure.

“A no-deal Brexit is back on the agenda,” write Denise Roland and Saabira Chaudhuri in The Wall Street Journal. “That would hinder Britain’s trading relationship with the bloc, leading to a reintroduction of steep tariffs and new border checks.”

In fact, there are numerous challenges and complications associated with the latest schedule. First, warehouse space is nowhere to be found “because there isn’t any,” Peter Ward, head of the UK Warehousing Association, told The Journal. Numerous businesses have been stockpiling goods to guard against potential disruption at the border. Add to this the demands of the holiday season (about 20% of UK retail sales happen in November and December), and the consequences for retailers are dire.

Secondly, as October is the start of flu season, vaccine makers are struggling. Unlike many other drugs, flu vaccines cannot be stockpiled. Hugo Fry, managing director of Sanofi SA, the world’s largest maker of flu vaccines, is quoted in the story. He says his company has “stepped up” its provision of air transport and has been testing several alternative delivery routes and methods to guard against potential delays. Still, it’s unlikely these efforts will be enough.

The food industry is also affected by the October timing. In the fall, Britain shifts toward a greater reliance on imports. As a result, there will likely be significant fruit and vegetable shortages.

Finally, many businesses have already put contingency plans into action, and these cannot be repeated. “For instance, some car makers, which rely on just-in-time delivery of parts made in Europe, scheduled factory shutdowns for April to avoid disruption,” Roland and Chadhuri write. “But idling plants again in November isn’t an option.”

Be a supply chain problem solver

Supply chains around the world have been contending with the effects of Brexit since the original vote. Strategies have been set, and assets have been moved around for months now, but setbacks and glitches keep surfacing. And this isn’t necessarily a temporary problem; Brexit will have ripple effects for years.

If your organization is coping with the complexities of Brexit — or a supply chain disruption of any kind — ASCM offers a variety of APICS certifications to help you navigate the waters. For 60 years now, individuals and organizations have turned to APICS credentials to build skills and advance supply chain performance. The Certified in Production and Inventory Management (CPIM) designation is recognized globally as the standard of professional competence. APICS’s Certified in Logistics, Transportation and Distribution (CLTD) program will enable you to demonstrate in-depth knowledge of a broad range of logistics topics. And becoming a Certified Supply Chain Professional (CSCP) validates your supply chain expertise and ability to optimize operations in the most stressful, high-demand environments.

Learn more about how these industry standards can elevate your career and organization.

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