This morning electronics retailer AO announced it has stockpiled £15million of popular products in preparation for potential Brexit chaos. In response to the ongoing uncertainty, it seems not a week goes by without headlines about businesses stockpiling to stave off disruption, from supermarkets storing extra food to manufacturers loading up on raw materials. The fact that Brexit stockpiling even features in the Bank of England’s inflation report shows that this is a very serious industry issue.
Wayne Snyder, VP Retail Industry Strategy EMEA at supply chain expert JDA is well-placed to comment, with JDA running supply chain for some of the world’s biggest manufacturers (Harley-Davidson, Heineken and Nike), retailers (Co-Op and Morrisons), and eight of the 10 top global logistics companies.
“Retailers must be careful to avoid falling into the trap of making a knee-jerk response to the supply disruption Brexit might bring. Short-term mistakes could do them long-term harm: Brexit needs to be treated as a strategic business issue. It’s difficult to know exactly how supply chains will be impacted by Brexit, but amid all the short-term uncertainty, preparation is key. They must seek to find a happy medium in terms of response, as ignoring the danger signs entirely would leave themselves open to being caught out by disruption, while on the other hand, there is a danger that time, money and other resources might be ploughed into bracing for disruption that will never materialise. The key is to look forward in a strategic manner, and be ready to react quickly as greater clarity emerges. Brexit or not, retailers should be regularly reviewing their sourcing and warehousing strategy to ensure goods are available to customers.
“There’s no point making plans if you are not agile enough to act on them. ‘Agility’ is an over-used business buzzword, but this is a circumstance where it really is needed: there’s simply no point having Brexit contingency plans if you cannot put them into action right away. Having visibility of the end-to-end supply chain has always been important, but at this time it will prove critical. It will be key for retailers to be able to predict and then quickly react to problems such as understanding additional stock requirements to cover any disruption, or to manage future delays or rising import/export costs. If Brexit does cause disruption, the ability to react quickly will prove the difference between failure and success.”