While recent headlines in the UK like the following are stoking concerns on the potential negative impacts of Brexit, rapid business scenario planning can help British and global companies prepare for the risks and leverage the potential opportunities in the months and years ahead.
“Brexit provides the perfect ingredients for a national food crisis – When it comes to the UK’s supply chain, preparations for a no-deal scenario are non-existent.”
“Army on standby for no-deal Brexit emergency.”
The uncertainty around the future UK-EU relationship impacts companies in UK and EU alike, with the European Roundtable of Industrialists (ERT) stating at the end of May 2018: “We need clarity and certainty … Uncertainty causes less investment.”
However, companies choosing a wait-and-see approach will have to play catch up to those doing proactive business scenario planning, not just within their organization’s traditional boundaries, but also with those companies already connected across their full supply chain and customer segments.
Pre-planned internal and external scenarios, potentially aligned with their most strategic suppliers in their UK and global supply chain, can help organizations prepare and secure a competitive advantage or maintain regulatory compliance without losing their competitive edge. Organizations need to be primed to deal with any eventualities, enabling actions regardless of whichever Brexit outcome eventually occurs.
While this is important for all companies, this is particularly crucial for companies in heavily regulated industries, such as pharmaceuticals. For example, within the EU, quality approval in one country is applicable in other EU countries, thereby simplifying and expediting the overall supply chain and allowing a product to reach its end country much more quickly. However, once the UK leaves the EU, in the absence of an agreement, UK manufacturers’ supply chain networks will require additional steps and lead time before products can be placed on the EU market, making detailed supply chain network planning even more important.
How technology can help
Through preparing a set of scenarios based on facts and presumptions based on today’s reality, an integrated business plan enables organizations to play out the impact of Brexit. An integrated business plan, supported by “what-if” simulations, allows organizations to play out scenarios of most and least significant change and any in-between scenarios. Technology allows business leaders to get a head start on their competition with improved scenario planning. This helps companies prepare for all eventualities and have suppliers aligned to deliver in a way that is efficient and minimizes the administrative burden for both organizations and suppliers.
For example, integrated business planning can be used to show how different Brexit scenarios will impact trade tariffs and market access, and what will this mean for customers/suppliers in terms of:
- Raw material/component prices
- Delivery lead times
- Competitive situations at home and abroad
- Buying power of customer/consumer segments
This will support the ability to adjust plans as new information becomes available and be able to rapidly implement any given plan as and when clarity is reached.
To achieve maximum efficiency and impact, business planning can provide an integrated view of supply chain plans – including how they match customer demand and financial impact across different scenarios – so organizations can make informed decisions based on capacity and financial impact. These “bottom-up, top-down” plans can be based on integrated financial data, historic demand data, or even weather patterns.
The ability to plan and compare most significant change, least change, and likely scenarios, while pulling in real data to create these various versions, can enable organizations to become far more agile and resilient in the face of uncertainty. Integrated business planning as a process and technology platform enables companies to bring these scenarios together in one view, with executive analytics and detailed planning views based on one platform and one data set.
Visualizing network planning across the entire supply chain as changes are made to integrate new suppliers, different transportation routes, and different processes for senior leadership teams can help organizations track decision-making on key changes.
However, despite planning all internal processes from sales to inventory in detail, organizations will no doubt have to deal with unexpected changes, both at a macro and micro level. Predictive and network algorithms can help automatically identify likely supplier bottlenecks and delays during transportation, enabling companies to prepare for gates or choke-point challenges.
Having integrated business planning scenarios ready, organizations can quickly activate and execute on the most likely scenario, as well as adjust the influencing parameters as the Brexit process develops.
Whatever the uncertainty about the Brexit future, fortune favors the prepared.
Join our Webinar, “Integrating Supplier Risk Management into Your Procurement Processes” on Wednesday, October 31, 2018, at 10:00 a.m. GMT / 11:00 a.m. CET.
This article was written in collaboration with Claus Jensen, Business Development Manager of Digital Supply Chain at SAP, and Ross Harrison, Consultant at Deloitte.