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Brexit is a great uncertainty for businesses operating cross-border. Therefore, it is crucial for companies operating complex supply chains to consider the implications of Brexit on their businesses.

A PESTLE is an analysis tool that provides an understanding of the factors and external changes to the business, which may impact their ability to operate and thrive.

In this article, Nicholas Hallam considers the elements of Brexit that are out of the control and influence of businesses, but which they should still be planning for, as well as the proactive steps they can take to guide strategic decision making.

Political

Brexit has been an intensely political issue – from the original promise of the In/Out referendum (made by David Cameron to prevent a haemorrhaging of Tory support to UKIP) right through to the political and legal disputes about the triggering of Article 50 and the ongoing controversy about the trade-off between free movement and the single market. The debate – which cuts across traditional political alignments – pits sovereignty against efficiency, and the citizens of definite somewhere against free-flowing globalists.

Economic

The UK runs a constant trade deficit with the EU. While the UK’s biggest individual export trade partner is the US, over 62% of all exports went to the 27 EU Member States during Q1 2017, totalling £33.1 billion. And during this time-period the UK’s top import partner was also an EU Member State, Germany (£17.6 billion worth of goods).

Social

While Brexit essentially means untangling the links that the UK has with the EU, there are many ways in which we will stay connected irreversibly. Some of the biggest technological advances in recent years – such as smart phones and social media – have been made to connect people no matter their location, language or economic status. So, while the government may have a protectionist ethos, it may be increasingly impractical to implement to live up to most people’s expectations and habits.

Read more at Analysis – what impact will Brexit have on supply chain operations?

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The World Economic Forum defines global risk as an uncertain event that, if it occurs, can cause significant negative impact for several countries or industries within the next 10 years.
Global supply chains create both opportunity and risk. Some of the macro issues we face both in day-to-day operations and future planning include cybersecurity, terrorism, climate change, economic instability, and political discord.
More specific to executives who manage global supply chains, risk is more apparent, and on a micro-basis potentially more consequential in the short term, in areas such as but not limited to reducing spend, leveraging sourcing options, creating sustainability, political and currency instability, government regulations in the U.S. and abroad, trade compliance management, free trade agreements, energy costs, and what the incoming Trump administration will mean for global trade.
Since the recession in 2008-2009, we have witnessed a serious uptick in companies worldwide reviewing their operational exposure and then creating risk strategies in managing these vulnerabilities. Risk exposure can negatively impact margin, profits, growth strategies, operational stability and personnel maintenance.
For companies operating in global supply chains the risks are vast, convoluted and often unanticipated. As a result, we tend to be unprepared for the impacts.

Read more at Commentary: Managing risk in the global supply chain

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